GIP-120 (revised): Should GnosisDAO acquire Headquarters (HQ.xyz) to Accelerate Gnosis 3.0

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GIP-120 (revised): Should GnosisDAO acquire Headquarters (HQ.xyz) to Accelerate Gnosis 3.0

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GIP: 120
title: Should GnosisDAO acquire Headquarters (HQ.xyz) to Accelerate Gnosis 3.0
author: Stefan George
status: Phase 2
type: Funding
created: 2025-01-09
duration: Effective starting from the date of GnosisDAO approval
funding: $8.95M in GNO (2/3) and SAFE (1/3) based on the SMA100 on the day the proposal passes.

Abstract:

This is a revised proposal for GIP-120. The revision is about the purchase price and asks from GnosisDAO.

TLDR: Investors, founders, the team, and advisors get above 30% less in GNO. Investors get the option to cash out at 40% discount. Founders get 1/3 upfront, 2/3 vested over 4 years. The total amount paid by GnosisDAO for the acquisition is between $7M and $8.95M depending on the options investors pick.

Purchase of HQ equity:

Investor Equity:

Investors invested $4.79M into HQ. GnosisDAO will offer two options for investors to purchase their equity. Investors will be able to split their investment between the two options until 3 weeks after the Snapshot proposal passes:

  1. Convert investment into tokens:
  • USD value of investment in ⅔ GNO and ⅓ SAFE tokens.
  • The token price for GNO and SAFE is defined at SMA100 on the day the proposal passes.
  • Tokens will be vested linearly over 3 years.
  1. Receive investment back immediately in USD at a 40% discount.

Founders, Team and Advisors:

Founders, the team, and advisors hold a total of 77% of HQ equity (valued at $16.5M based on the last round).

Founders, Team and Advisors will receive a total of $4.15M for their equity:

  • $4.15M in ⅔ GNO and ⅓ SAFE tokens.
  • The token price for GNO and SAFE is defined at SMA100 on the day the proposal passes.
  • ⅓ of tokens are paid out upfront, and ⅔ are vested linearly over 4 years for the founders and two years for the team and advisors.

Depending on the selected options above, the total purchase price to be borne by GnosisDAO will be between $7M and $8.95M.

Operational expenses and incentives:

Gnosis LTD will negotiate and pay salaries and other operational expenses as HQ becomes part of Gnosis. Gnosis LTD will also negotiate and be responsible for the payment of team expenses moving forward. None of these need to be approved by GnosisDAO.

This is currently being considered to give an idea of how KPIs will be defined. The percentages are of the total allocation of GNO and SAFE as incentives. The incentives are anchored on the following metrics:

  1. Revenue
  2. Number of active accounts using Gnosis Chain
  3. Number of stablecoin issued natively on Gnosis Chain
  4. Number of integration with wider payments ecosystem, including local and global banking networks, eWallets and on/off-ramp providers

There are a total of four milestones, each with higher targets of the above metrics. Of these four milestones, the payout is in increasing order with the largest part (43.75%) being paid out only after Milestone 4 is reached:

  1. Milestone 1: 12.5%
  2. Milestone 2: 18.75%
  3. Milestone 3: 25%
  4. Milestone 4: 43.75%

Reason for full acquisition of Headquarters

  1. Gnosis can promote Gnosis HQ as a Safe interface for Business.
  2. Gnosis can establish a presence in Asia (relevant for Regulator- & Investor relations).
  3. Gnosis Pay can leverage Gnosis HQ for the Corporate Card offering.

Having a Business Account use case and presence in Asia is vital for the fruition of Gnosis 3.0. Acquiring Headquarters will accelerate Gnosis’ progress in the payments field and allow it to have a strong global footprint.

The decision to fully acquire instead of partial acquisition or investment is intentional - because it is through a full acquisition of Headquarters and conversion of equity to tokens, that we ensure full alignment to accruing value to the GNO token. This avoids the risk of diluting interest across parties.

Edit on 2025-01-10: Investor vesting for GNO and SAFE was increased to 3 years total and cash discount was increased to 40%.

7 Likes
2

I appreciate the willingness of the Gnosis and HQ teams to listen to community feedback and adapt the proposal.
I support the new proposal, hope it gets accepted and wish the HQ team success in this new journey together with the Gnosis ecosystem.

8 Likes
3

Thanks for the renegotiation and writing, seems reasonable to me as it is presented now!

only one thing I don’t understand:

and

don’t seems to fit (30% vs 40%), most likely just a typo in one of the lines?

and in general I would be interested to know some more details about the affiliation of Gnosis Ltd and GnosisDAO regarding this investment. If the Ltd covers the operational expenses it seems this means some kind of Co Ownership of Ltd and DAO? Or will the funds be covered by the DAO and the Ltd acts as a service provider?

3 Likes
4

Thank you for noting this. It was a typo and I edited the post to be consistent.

Anything currently done by Gnosis LTD is to the sole benefit of GnosisDAO. Any value capture will accrue to GNO tokens. This includes Gnosis Pay and HQ if the proposal passes.

Gnosis LTD has funds available to pay for operational expenses. However, it can be expected that Gnosis LTD will create GIPs to ask for future funding at some point.

8 Likes
5

I support this acquisition and fully believe both teams can come together to do even greater things together.

6

I appreciate the clarifying call, but am disappointed that the proposal hasn’t been rewritten into something clear and fully specified. Despite the welcome reductions, this is still a proposal asking for over $7m! I think it deserves more care.

But it’s not. This is notes about what a revised proposal might look like, and extremely incomplete notes at that.

I’m supportive of worries about DAOs becoming bogged down in bureaucracy and minutiae, but this is currently so far in the other direction that those concerns are irrelevant.

But working with what we have, for me the most important thing to confirm is that the incentives and related milestones listed will be covered by Gnosis Ltd and not the DAO. I think that’s what will happen, based on the call we had, but these notes really don’t make that clear.

The first paragraph of the section “Operational expenses and incentives” only talks about salaries, operational expenses and team expenses, categories which don’t obviously cover further incentives.

Considered by who? Defined by who? I assume Gnosis Ltd, but it doesn’t actually say.

I think perhaps the intended meaning is something like “To give DAO members an idea of how KPIs might be defined by Gnosis Ltd, we’re currently considering the following:”?

What is this allocation? The same as in the original proposal, but now covered by Gnosis Ltd? If that’s correct, then in a sense it doesn’t matter, since this falls outside the DAO’s remit, but it’s still hard to think clearly about this when the information is presented so obscurely.

Reading between the lines and attending the call, I think there is a version of this proposal that’s in the heads of members of Gnosis Ltd and HQ which could make good sense, but our job as DAO members is to vote on what’s actually presented to us, and there still isn’t actually a coherent, well-specified proposal here yet which can be decided on. For that reason I’m still against it.

7

The ask from GnosisDAO is specified and covers the acquisition costs for HQ. What is not specified are the operational costs for salaries and incentives. Those will be directly decided upon and paid for by Gnosis LTD.

I hope this helps.

1 Like
8

GIP-120 is live on Snapshot! https://snapshot.org/#/s:gnosis.eth/proposal/0x83e80bfada4ea5df32870ddbc102d1debf613e21510d00d76d99eb2bde1bc592

Please exercise your right to vote!

3 Likes