GIP-102: Should GnosisDAO provide financing for the new GnosisVC ecosystem venture fund?

Governance GIPs
5

yes, but the problem with multi chain projects is:

  1. they have to focus/build on multiple chains → changes are slow/take a long time to pass
  2. conflict of interest (token allocations, governance ->people prioritize something like ARB if they have a large ARB allocation)
  3. protocols are not fully optimized for the capabilities of the chain → they still need to run on mainnet in many cases

Ofc the pros are:

  1. You have much lower costs
  2. You have actual competition

Multi chain projects increase the utility of the chain, but they don’t give you competitive advantages. There is almost no difference if you use AAVE on ARB or Gnosis chain. The difference is the yield or the token incentives, which means:

  1. You either have to incentivize liquidity, which is not sustainable in the long term
  2. You invest in/build the proper protocols yourself ->the sustainable path
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6

Gnosis is uniquely positioned to benefit financially from the VC activity and leverage these investments to forge strategic partnerships with portcos and expand the ecosystem. Previous VC initiatives have proved both points, and this activity certainly should continue. Very much in favor!

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Thanks for your detailed thoughts; regarding the 3 main points.

  1. GnosisVC is a separate entity

  2. The fund will also take external capital to help expand ecosystem participation

  3. A public data room is intended to give more transparency over the ongoing investment strategy and thesis development, there is no intention to limit or tier access to it

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There is a clearly defined focus within the fund on application development. You have pretty accurately identified the problems with crosschain switching costs, our intention is to help integrate portcos more closely to give the entire ecosystem a greater degree of stickiness.

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Hi, I’m Yudai. I’m co-founder of Fracton Ventures, a crypto incubator in Japan. My team members have venture capitalist backgrounds and my team is a big fan of Gnosis ecosystem. Also I have an incubator background and knowledge of VC legal structure. So, we’re interested in the VC model for long-term ecosystem empowerment.

The proposal is a one of unique proposals that I have seen before.
So I have a few questions for you.

  1. Are there any new challenges as a VC structure? To be specific, do you plan to convert LP-share to tokenized LP-share? It may potentially you can take a position in DeFI.
  2. Do you have a strategy for deploying money in geographically based areas? Our team is based in Japan, and we’d like to support the fund’s success in the Asian market if you feel it makes sense.
  3. Do you plan to deploy money from the management fee to provide a customized acceleration program by you? We can provide full customized program to Japan or Asian market.
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Hi! I’m looking to try and find out more information about the team and background for this proposal before finalising my vote, but have found very little publicly-available information.

With respect, without more information, it’s quite hard to discern what separates this proposal from an anonymous group raiding the treasury for $20m to fund their new venture.

I am quite reluctant to commit to paying $400k in 2% management fees per year for 7 years to 4 members of an investment committee without any information on their investing credentials or role in the DAO/ecosystem. There’s been no historic engagement from the poster, who joined the date of this post. I’m also struggling to find information about the other 3 fee recipient members of the committee, let alone any historic engagement. It may just be my own ignorance, but more information is definitely needed to make this a strong standalone proposal.

Can I suggest the team provide answers to the following additional questions:

  1. Provide a brief description of each member of the team behind this proposal and/or the investment committee, including their previous involvement with the Gnosis ecosystem, their previous experience in venture capital and links to public profiles/publications for further reading.

  2. Please describe the process by which the team members, investment committee and advisors were selected. Please clearly indicate which elements are public and private, and which involve some oversight by Gnosis (and by which individuals/functions).

  3. Please explain how the proposers arrived at a $40m total for the fund, and a $20m contribution from Gnosis and external LPs respectively. Do the proposers have other external LPs lined up or in the works? And if not, how confident are the proposers in their ability to line up external LPs, and what happens if they fail?

I would also expect to see a more detailed term sheet published in due course, as the details in the post are really very minimal. In particular, it will be vital for Gnosis DAO to understand what recourse it has in the event that its investment is mismanaged or otherwise at risk.

Until more information is provided, I’m provisionally voting “Against” GIP-102. Though I think venture investments for the Gnosis ecosystem is potentially an excellent idea, the execution of this proposal so far concerns me. I hope to be promptly proven wrong!

Edit: following comments from Stefan explaining the involvement and support of Gnosis LTD, I’m content to support this proposal in its current form. I look forward to the community call to hear more.

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11

I am a web3 believer, did try for 7 years to get into some web3 project to do something meaningful.
All I found was corporate mentality, people judging you by if you worked for some corporation (of course I didn’t I am an anarchist, or why would I be in the web3 lol).

This VC funds made by a DAO is the most retarded thing.

I make a living trading memecoins and when I see that not just doge, or WIF, but even popcat flipped GNO, I understand that this is the right direction.

You wanna get into popcat ? You buy a bag and work for your bag. You wanna get into GNO ? You have to put your job request into some corporate stuff, Linkedin, Resume.

Wouldn’t have sense to start experimenting some real decentralization ?

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Thank you for your feedback. I want to share my perspective as I have been part of forming the team behind the GnosisVC proposal. We have put a lot of thought into composing a team that combines expertise in investments, legal structuring, fund management, quantitative modeling at hedge funds as well as DeFi from both a technical and financial perspective.

The team has been working on this proposal for a long time (over 6 months), which is also due to the requirements set by Gnosis to have voting rights in the final structure. GnosisVC would be the first Ecosystem Fund, where a DAO/token holders will have control within the fund structure. Meanwhile, the team has been working on investments, which we decided to warehouse in Gnosis LTD. The team could hit the ground running and has proven to be working effectively.

I would personally (pro bono) be part of the investment committee to provide oversight and ensure the holistic view on Gnosis is sufficiently represented. The fund would be an independent entity and team from Gnosis LTD and through the asset holding foundation, GnosisDAO would have voting rights in the final structure.

The team decided to cap the fund size at $40M to ensure that the money could be fully deployed to support early-stage projects and avoid being forced to participate in large rounds at unfavorable valuations. With a fund size much larger than $40M, participating in pre-seed or seed rounds could become challenging, given that the average ticket size would need to be >1.5mio (assuming a target of ca. 30 portfolio companies for the fund). Backing projects early can help to align them better with the Gnosis ecosystem and capture their value-add to advance the Gnosis 3.0 roadmap.

The reason to have 50% coming from external LPs has the following reasons:

  1. We want to get more capital into the ecosystem instead of redistributing it.
  2. We would like to allow others to participate in the success of the ecosystem as a whole and not only in the success of the base layer.
  3. There is general interest at the moment from traditional tech and finance actors to participate in our industry, GnosisVC will be a conduit to do so with sufficient alignment.

The existing deal flow, which Gnosis LTD has previously managed directly, would now have a formally managed fund structure, which can do proper due diligence and build a strategic portfolio to let the DAO participate in a more structured and transparent manner.

IC members themselves will have a stake in the fund and would have a considerable amount of skin in the game.

For everyone, who would like to learn more, please visit this link: https://forms.gle/CFHk6s84LA5kBs2F7

I invite everyone to join the Gnosis community call on Thursday, July 11th at 4PM UTCT, where the team will present GnosisVC.

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13

Thanks Stefan - that’s all extremely helpful to know. Excited for the community call to hear more.

The existing deal flow, which Gnosis LTD has previously managed directly…

Are you able to elaborate a little more on this? Am I right to interpret that Gnosis LTD has been working on the deal outline and general arrangements for GnosisVC, but this work is now being opened up to the DAO for the various benefits you mention? Can I therefore infer that GnosisVC has the general support of Gnosis LTD?

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Yes, this is correct. Gnosis LTD has ensured that the setup and process is in line with GnosisDAO. It is an important part of Gnosis 3.0.

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I second the sentiments from jackgale.eth: with the information available, it’s extremely difficult to form an opinion on this proposal. I appreciate the update from Stefan, but I find it raises more questions than it answers.

When you say “[t]he team has been working on this proposal for a long time (over 6 months)” I appreciate you don’t mean that literally, but the fact is that the actual proposal the DAO has been presented with after all that work is barely 600 words and contains extremely scant information. That doesn’t engender confidence in this initiative or suggest much respect for the DAO.

I filled in the form to get more information over a week ago, but am yet to receive any.

IC members themselves will have a stake in the fund and would have a considerable amount of skin in the game.

How much? “A considerable amount” isn’t enough information to base a decision on.

the requirements set by GnosisDAO to have voting rights in the final structure

When and how did GnosisDAO set these requirements? What is the specific nature of these voting rights? Why was this very important information not included in the proposal text?

I look forward to joining the community call to find out more.

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I was referring to the organizational model, and to the fact that the funds are distributed with a ventur capital approach.

I am one of those folks that think Venture Capital has been in general pretty toxic for crypto, because

  • the need to generate quick returns is not aligned with the current state of crypto (building infrastructure)
  • corporate model it top down while crypto model shall be peer to peer
  • the assumption that corporate governance is the only way to solve freerider problem and principal agent ptoblem is toxic for the space

Gnosis Chain has let somehow starve community first projects like 1hive and Agave. Those folks (I am not one of them, even if I invested in their tokens in the past) at least TRIED to build a DAO, a project to support decentralized governance (gardens, celeste) etc.

Of course those kind of approaches need a lot of experimentation, need to fail several times before finding the right equilibrium. But at least they did try.

Don’t you feel like to be missing something by replicating corporate model ?

Today, with the shittiest market in the last weeks, a Dog Wif an Hat still has more than 2x the valuation of Gnosis.

Memecoins will outperform any other asset (One day also Karpatkey will buy them, and that will be probably top-signal for us folks from the trenches), and the reason is only one.

In memecoins the community matters (just like early in Bitcoin).

Where is Gnosis Community ? Oh you have a forum. I did try to join Gnosis to work for Gnosis, no one even cared of my application (that indeed was with one of those corporate stuff etc).

The reality is that you are playing the “security” game.

I won’t go in the Arbitrum Forum to spend my time. I am here because, Gnosis in theory has a different history. No one forces you to follow A16Z playbook.

Join us in the trenches and wish to A16Z crypto to join SBF in pride and glory.

My call to action is a change of mentality, to have the courage to experiment and to have as a mission going beyond corporate governance and corporate mentality.

Not written with GPT4.

Wizard

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17

Agree to your sentiment and especially decisions like the closure of Aave should have been discussed here before.

One major problem with this forum is: many decisions regarding the Gnosis ecosystem have been done by insiders and some aligned entities, especially to mention @Karpatkey and the Ltd., elsewhere without going through this forum. While discussing these topics here could have attracted many people to stay here or even join this chance hasn’t been taken.
Now the GIP-101 tries to revive this forum but imho it will only work if the people that have done the relevant decisions before are willing to participate here, that seems much more important to me than to allocate some voting rights to the delegates.

And regarding this proposal: It might worsen this situation if the relevant info don’t reach the people here in time to felt involved and the ‘public data room’ just gives the results afterwards, like the monthly reports of karpatkey. But maybe that’s the main reason to establish GnosisVC: to avoid too much communication about details (which in part can be reasonable and I wouldn’t mind for certain topics if in general the discussion takes place here).

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When you say “[t]he team has been working on this proposal for a long time (over 6 months)” I appreciate you don’t mean that literally, but the fact is that the actual proposal the DAO has been presented with after all that work is barely 600 words and contains extremely scant information. That doesn’t engender confidence in this initiative or suggest much respect for the DAO.

The team has been working on the proposal for a long time. Setting up a legal structure, which satisfies the requirements of having a DAO participating with special voting rights and allowing external LPs to participate is novel and requires significant setup time. The team has invested in this setup without Gnosis LTD’s financial support. A succinct description of the proposal is not disrespectful but consciously chosen.

I filled in the form to get more information over a week ago, but am yet to receive any.

Great, expect us to get back to you in the next couple of weeks. We first want to collect before we make a bigger reach out.

How much? “A considerable amount” isn’t enough information to base a decision on.

The total commitment by the IC members will be above 5% of the total capital. In line with industry standards.

When and how did GnosisDAO set these requirements? What is the specific nature of these voting rights? Why was this very important information not included in the proposal text?

Correction: This requirement was defined by Gnosis LTD. The structure is still a WIP. Once final, more information can be shared.

I look forward to joining the community call to find out more.

Great to have you there. I hope we can answer more of your questions on this call.

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19

I agree, there is still a lot of work to be done to balance GnosisDAO, Gnosis LTD, and other actors in the Gnosis Ecosystem. GIP-101 is a first, necessary step towards this. I appreciate everyone’s participation here in the forum and I see the need to give important members of the community a stronger voice.

Regarding this proposal: There were some investments done by GnosisDAO directly into projects and also Gnosis LTD has made direct investments into many projects before. The problem is this is not a scalable solution. For proper investments, we need to do due diligence, meet and discuss with founders, and foster synergies between projects. All of this is difficult to scale via a DAO or LTD. This is why GnosisVC should be the vehicle to execute this on the DAO’s behalf. I hope GnosisVC can do this more transparently while also attracting more capital to the ecosystem.

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20

glad to see you recognize this!

can’t agree too much on this although it might pave the way in the right direction. Imo willingness of the people making decisions for the gnosis ecosystem right now without using this forum before the decissions are already made ís much more important.

I see a bigger need to increase the audience here. The voice of the few ppl posting here is already recognized by the few others :wink:

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21

and also it’s important to increase the number of defi participants. Just recognised that a balancer pool, which gives a quite good apy from trading fees (imo more sustainable than lp rewards) is still only funded by me after the majority was withdrawn (most likely by karpatkey) already two months ago.
image

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and as I see it we will only attract more ppl if they are convinced this is a reliable transparent ecosystem, not one that’s controlled by ppl making decisions behind the scenes.

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Hello,
I think the idea of ​​GnosisVC is great: allowing GNO holders to receive part of Gnosis’ investment in early projects.
However, how will $GNO holders benefit from it? Here are several ideas:

  • incentivize GNO/osGNO Pools (with benefits of seed invest)
  • swap these tokens into $GNO to boost validator rewards
  • a fair redistribution of tokens between $GNO holders

I think there are plenty of other ways to redistribute all this

I would also like to share with you some interesting and early projects:

Bolt : fast finality service on Ethereum
hylé : minimal layer one, focused only on verifying zero-knowledge proofs
eRPC : open-source fault-tolerant evm rpc proxy with reorg-aware permanent caching
WeaveVM : an ultra scalable EVM layer build with Arweave permanent storage

Thank you for your feedback

24

GnosisDAO Forum – GnosisVC Update – Q4 2024

This being the first update post since the GIP-102 vote to launch GnosisVC, we’ll extend the post to a 2024 review instead of just covering updates from the fourth quarter.

The road to GnosisVC

The concept of GnosisVC as a standalone structure began in early 2024, with the initial ideation driven by the Gnosis co-founders. The goal was to create a new home for GnosisDAO’s venture investments that would provide a uniform and transparent way to continue their excellent track record of backing early-stage projects both financially, as well as with knowledge, resources and integrations.

The core team and advisors for GnosisVC were selected by March. They began working out the overall investment strategy while researching the best suited legal structure to deliver on the objective. After the framework and focus verticals were laid out, the team began screening deal flow in April, given the expectation of an uptick in valuations towards the second half of the year and ability to lock in favourable terms in the present. The early investments were warehoused by Gnosis Ltd with the ability to eventually transfer them into the fund (at cost price), which would also decrease blind-pool risk upon launch and thus make fundraising efforts easier to some extent.

GIP-102 to formally launch GnosisVC went live in late June and passed with 99.33% votes in favour. Following the GIP vote, the team initiated the setup of the fund structure in the form of a Cayman partnership with a clearly defined investment mandate and effective control by Gnosis DAO (through the Gnosis Assets Holding I Foundation established based on GIP-91, updated in GIP-94 and GIP-96).

Progress Update

The investment pillars of GnosisVC are: real-world assets, payments middleware, and decentralized infrastructure. These three verticals were selected to advance the Gnosis3.0 vision by backing projects that are suitable to unlock further growth and adoption of the Gnosis product suite.

GnosisVC screened >100 deals in total, of which 5 were deployed and 4 are currently pending execution. Most of the deal flow originates from the wider Gnosis ecosystem and is evaluated in close collaboration with advisors working on GnosisPay and other Gnosis core team members. In addition to the deal flow obtained from within Gnosis DAO, the sourcing channels were further expanded by forging relationships with other venture investors to bi-directionally share investment opportunities. The GnosisVC team was present at the following conferences in 2024: Dappcon Berlin, EthCC Brussels, Token2049 Singapore, Devcon Bangkok, + many other, smaller events.

Fundraising was kicked off in November at Devcon Bangkok and the team has received commitments from 10 investors so far. (The fund aims to raise another 20mio USD in addition to the 20mio committed by Gnosis DAO, see GIP-102 for reference).

Timing of future updates: we’ll generally aim to post updates 3-4 weeks after the end of each quarter, as well as posting about new investments on our X/Twitter account (@GnosisVC).

Portfolio

Among others, the following investments were added to the GnosisVC portfolio in Q4 2024:

  • Monerium: regulated stablecoins in Europe.
    With their E-money compliant structure, we expect Monerium to gain additional tailwind from the MiCA regulations in effect since January 2025. The EURe and GBPe stablecoins are the backbone of GnosisPay and also integrated with the Metri wallet. Moreover, Fiat on/offramps are available seamlessly through the Monerium SAFE app supporting batched transactions.
    The investment of GnosisVC invested a total of 3.25m USD, leading the latest equity growth round (including the transfer of a warehoused position deployed in Q2 ‘24).

  • Tokenize: At the forefront of equity fundraising innovation, Tokenize.it utilizes blockchain technology to simplify the equity fundraising process for startups through tokenization. By offering a platform that reduces the complexities and costs associated with traditional equity financing, Tokenize.it provides startups with an efficient pathway to access capital. Positioned uniquely in the German market and adhering strictly to local regulations, Tokenize.it has successfully completed its first transaction in 2024 and plans for expansion to other European jurisdictions. The equity tokens issued by Tokenize.it are available on Ethereum and Gnosischain. With our investment, we support their vision to transform startup financing in Europe and bring additional real world assets to the Gnosis ecosystem.

  • FLock: blockchain infrastructure for federated learning and open-source AI models. FLock’s incentivized platform lowers the barriers for accessing AI agent training, fine-tuning, and inferencing for a more equitable distribution of rewards along the value chain and governance by users. This is a strategic follow-on investment from the F.actor portfolio, whereby GnosisVC participated in the SAFT round shortly before the token generation event in December 2024 - coinciding with their mainnet launch.

  • Picnic: onboarding web2 users in Brazil with account abstraction (built on SAFE) and convenient on/offramp with dedicated IBAN bank accounts per user. Picnic already has onboarded >20k users and is planning further expansion across the LatAm region. Together with the upcoming integration with GnosisPay in Brazil, we are optimistic on the outlook of further growth and adoption on their platform. Other items on Picnic’s roadmap are yield products, mobile app, and native Bitcoin withdrawals (using Kinetex, also one of Gnosis DAO’s investments).

Other News:

  • In January, GnosisVC invested in the pre-seed round of an e-commerce payments network. We have also committed to were executed in January
  • Balmy (F.actor portfolio company) launched their Earn Guardian on Base with a 300k rewards program: x.com

The full list of investments (including F.actor portfolio companies) can be found here: Gnosis

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