GIP-121: Should GnosisDAO accept a combined total of 7.5% ownership for incubating karpatkey DAO?

Governance GIPs
1
Should GnosisDAO accept a combined total of 7.5% ownership for incubating karpatkey DAO?
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GIP: 121
title: Should GnosisDAO accept a combined total of 7.5% ownership for incubating karpatkey DAO?
author: @karpatkey
status: Draft
type: Meta
created: 2025-02-13

Simple Summary

This proposal signals GnosisDAOs acceptance of a 5% allocation of karpatkey DAO’s airdrop, bringing GnosisDAO’s total stake in KPK to 7.5% of the fully diluted supply.

Abstract

karpatkey has led the active DAO treasury management space after becoming GnosisDAO’s treasury manager in GIP-20 and GIP-58, and GIP-95. Specifically, GIP-20 laid the foundation for karpatkey DAO as a project incubated by GnosisDAO. Following in the footsteps and tradition of the sister projects such as CowDAO and SafeDAO, karpatkey will launch a DAO and a governance token (KPK).

This proposal allocates 5% of its airdrop to GnosisDAO, bringing GnosisDAO’s total stake in KPK to 7.5% (GIP-20) of the fully diluted supply.

This is a revision of GIP-92.

Introduction

karpatkey is the leading DAO service provider for active, non-custodial treasury management.

The project was founded in 2021, beginning with initial engagements to manage treasury funds for Gnosis Ltd and GnosisDAO. As a result, Gnosis and karpatkey have always been deeply connected.

Gnosis has supported karpatkey’s efforts to build and test sophisticated DAO treasury management products and processes. In turn, karpatkey has provided many essential contributions to GnosisDAO, Gnosis Chain and other Gnosis-incubated products (see karpatkey’s 2022, 2023, and 2024 reports for more details). Together, these mutual contributions have focused on creating long-term value for stakeholders in Gnosis, karpatkey and the broader ecosystem, including GNO and future KPK holders.

With Gnosis’ support, karpatkey has expanded to serve a dozen DAO treasuries. Within its network, the team has established and served on a selection of finance working groups, including GnosisDAO, ENS, Balancer, dYdX, CoW, Lido and Aave. They have also contributed to specific initiatives for Uniswap, Safe, Arbitrum and Sky (formerly MakerDAO). Many of these relationships have generated significant value for Gnosis by supporting incubated projects, delivering new integrations and joint initiatives, and even providing strategic investment opportunities. The fact that karpatkey has continued to grow and thrive in the recent bear market is a testament to the product market-fit that their solutions have found.

At heart, karpatkey is focused on risk management and resilience, helping leading DAOs to thrive by ensuring that they can survive in perpetuity. The team is characterised by its prudent, rigorous and long-term-oriented approach. This mentality has been key in enabling karpatkey to preside over more than 10,000 DAO transactions across more than $2 billion in assets with zero funds lost. The same mentality helps them develop and maintain tooling and frameworks that can help the entire industry become more resilient.

Like COW DAO and Safe DAO before them, karpatkey has gradually extended its activities from the Gnosis ecosystem outwards and cultivated its own healthy business model and community. With GnosisDAO’s blessing, the time has come for karpatkey to formally launch its own public DAO.

About the KPK Token

The goal of the KPK token is to align the parties actively contributing to the delivery of karpatkey’s success. Tokenholders can vote on key decisions, such as treasury management, budget allocations, and strategic initiatives like buybacks or M&A activities, to align with karpatkey’s long-term sustainability. The token’s utility is focused on facilitating community-driven decision-making and fostering an active, engaged ecosystem.

KPK will be deployed initially on Ethereum Mainnet, with a fixed supply of 1 billion tokens. It will be non-transferrable at launch, with karpatkey DAO reserving its right to decide if and when to activate transferability.

How does GnosisDAO benefit from this proposal?

As described in the introduction, GnosisDAO has been an essential and fundamental partner to karpatkey since beginning its services to GnosisDAO in 2021. In appreciation of its support, this proposal seeks to allocate a further 5% of the KPK token supply to GnosisDAO immediately upon launch, combined with the 2.5% specified in GIP-20, increasing GnosisDAO’s share of ownership up to 7.5%.

By positioning GnosisDAO as a key tokenholder in karpatkey DAO, this proposal seeks to maintain strong and strategic alignment between the two DAOs, ensuring an ongoing place for GnosisDAO at the centre of karpatkey’s network and at the forefront of its technological innovation and progress.

Specification

This proposal directs karpatkey to deploy the KPK token and allocate 5% of its airdrop to GnosisDAO, bringing GnosisDAO’s total stake in KPK to 7.5% of the fully diluted supply.

Upon approval:

  • KPK will be deployed by the karpatkey team, formalizing vesting for the 2.5% KPK allocation from GIP-20 (2-year vesting, already vested) and establishing a 2-year vesting plan for the 5% allocation to GnosisDAO. The vesting terms for the airdrop align with karpatkey’s 2024 investment round and will begin on TTE or 1 year after this proposal passes, whichever comes first.
  • This proposal does not disqualify GnosisDAO from future additional airdrops.
  • All remaining KPK beside the GnosisDAO allocation will be sent to the karpatkey treasury.
  • Governance processes for karpatkey DAO will be introduced gradually in the coming weeks.
  • The launch of the KPK token and karpatkey DAO will not affect karpatkey’s ongoing service arrangements under GIP-20, GIP-58, and GIP-95.

If this proposal is not approved by GnosisDAO, karpatkey will proceed with launching its token and DAO independently while continuing its plans. GnosisDAO will remain a close partner and receive the 2.5% allocation from GIP-20 alongside other investors. Any future allocations or investments involving GnosisDAO will remain open for discussion and subject to mutual agreement between both DAOs.

Disclaimer

The plans outlined in this proposal are for discussion purposes only and can be subject to further changes. They may also need to be (re)structured to account for legal, regulatory, or technical developments and governance considerations. This document should not be construed as an offering of securities, taken as the basis for making investment decisions, nor be construed as a recommendation to engage in any transactions.

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hi karpatkey - can you please include a link to the original proposal [GIP-92] in your post (GIP-92: Should Gnosis DAO spin-off karpatkey DAO and deploy the KPK Token?) so that we know this is a revision?

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@john_szczepaniak The link has been added to the abstract.

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I don’t see a reason why this has to be a proposal as it seems like karpatkey can unilaterally decide to allocate an additional 5% of its ownership to Gnosis DAO anyways.

The proposal is basically asking if the DAO wants an additional 5%. Of course, why not. Nothing to discuss really lol.

Or is this proposal attempting to just formalize the spinoff of karpatkey as a separate entity?

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This statement comes across as incredibly dismissive. It frames the proposal as a take-it-or-leave-it deal—almost as if GnosisDAO should feel lucky to be included at all. Instead of positioning this as a mutually beneficial agreement, karpatkey is dictating terms while expecting GnosisDAO to simply rubber-stamp them.

This is especially strange given that karpatkey originated from GnosisDAO’s ecosystem and continues to be paid handsomely by it.

If the vote doesn’t actually impact the outcome, then why even have one?

Will KPK be tradable this year, or will GnosisDAO just be holding an illiquid position with no way to exit?

The language around karpatkey “reserving its right” to enable transfers suggests that control over the token’s marketability remains entirely in the hands of the karpatkey team, not tokenholders.

That’s a great question—because the proposal fails to justify why GnosisDAO is still paying karpatkey exorbitant fees while receiving only a small, illiquid, and non-controlling stake in return.

Would you, for the sake of transparency, as a DAO, be willing to share lifetime fees collected from each of your clients?

This proposal feels like a reactionary, cosmetic attempt to salvage a failing governance process (GIP-92). It does not address the criticisms that led to GIP-92’s failure, nor does it provide GnosisDAO with any real control, liquidity, or strategic advantage. Instead, it simply positions GnosisDAO as a passive recipient of a vesting allocation while karpatkey proceeds with its plans completely unchanged.

If the Gnosis founders have already signed off on this behind closed doors, then fine—go ahead. But let’s not pretend this is real DAO governance or, for that matter, luxury gay space communism. This looks more like the People’s Republic of Treasury Management - where the party elite make all the decisions while the proletariat gets symbolic governance rights and airdropped non-redeemable ration cards (a.k.a. KPK tokens).

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I want to share some background on this proposal and compare it to CowSwap and Safe and how they differ:

CowSwap and Safe were fully incubated within Gnosis for years before they became a spinoff. They were provided with everything until the time of the spinoff. Gnosis owned 100% until the spinoff took place and the ownership in terms of % of tokens was reduced to approximately 20% for both to allow for fundraising and independence.

Contrary, Karpatkey was always started as an external business with its decision-making led by Marce and Ale. The founders invested $2M in 2021 into Karpatkey.

Gnosis was for a long time the only client and always remained the main client for Karpatkey until today. Fees were adjusted to market conditions and are now approximately $2.3M annualized.

Gnosis supported Karpatkey by lending it credibility, paying fees, making an early investment, and supporting its ecosystem development. For this, GnosisDAO will receive 5% of the token supply bringing the total ownership to 7.5%. As hinted in the proposal, this might still increase through future airdrops.

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Thank you @aurelius and @mrtdlgc

Lets talk very openly.

Is this a "real" proposal?

History
So, indeed, unlike the spinoffs of CoW and Safe the situation of Karpatkey is different. While certainly the beginning of Karpatkey can be traced back to Marce having a role within Gnosis (actually to work on “Open Ethereum” (the parity client successor that Gnosis maintained for a while) and starting to set up treasury managment as a “side task” - he quickly decided to found Karpatkey and hire a team around that. So, it is very clear that this very early “contract” with GnosisDAO was extremely beneficial and reduced the risk to build Karpatkey as its own new entity greatly - but there have certainly been times where Karptakey had spent more into building their team than the contract with Gnosis earned them.
Also, I think it is important to note that this was at a time when the idea of “DAO treasury management” would basically not exist yet - so it was not like Gnosis had much choice and despite paying significant fees - specifically in 2020/2021 the fees where purely performance based and thus Gnosis would certainly get more out it than basically all other DAOs at the time that did not do it.

With that history Karpatkey certainly does not need to ask GnosisDAO for approval to issue a token. On the other hand - Karpatkey still has a significant interest in a mutual beneficial relationship. The core pieces are:

  1. an existing economically highly relevant contact
  2. reputation (or as @aurelius puts it: “rubber stamp”)

So while not explicitly on the table those two things are negotiated here. So of course GnosisDAO could come to the conclusion to demand e.g. more ownership of KPK for those two things.

Is this already a "done deal"?

If the Gnosis founders have already signed off on this behind closed doors, then fine—go ahead.

Yes - we had discussion before and I personally consider this a fair deal. However - I absolutely care about opinions of relevant community members. I also think the way it was brought to vote without prior discussion was wrong. In the case of HQ we obviously also had prior discussions with the team, but at the same time I hope it became clear that we took feedback serious and worked on finding a proposal where DAO members could get behind.

So the time for everyone to suggest changes to the proposal is now!

Is Gnosis paying Karpatkey too much?

First - it is important to understand what K. is doing much more for Gnosis than treasury managment. K. has essentially build up the Defi ecosystem on Gnosis. Now, one can ask critically - is Defi on Gnosis flourishing? How many of the funds in Defi come from GnosisDAO itself?

Here I would say: yes, it is clearly not yet flourishing in the way we want it - but still - there are very solid fundaments.

  • best onchain liquidity between $ and €
  • Spark and Aave available with attractive rates
  • sDAI available in a very attractive form and deeply integrated into the onchain liquidity
  • start of liquidity for RAW

A more exhaustive list of K. activity can be found here.

Those things sound easy but I can assure you, it did not just happened by accident but rather the result of a lot of work. Has it payed of yet? The answer is “no” - user and usage numbers are still too small to give here a yes, but certainly we laid the groundwork and if we are able to attract users to the chain they find attractive opportunities on the chain.

Coming back to K. related questions.
IMO the questions should be: how much does GnosisDAO want to invest in building a DEFI ecosystem on the chain? Should K. be the only partner for this? What activities in the past have been effective? Which one have been ineffective? What is missing?

I can assure that the Karpatkey team cares about having a mutual beneficial relation to Gnosis. Karpatkey clearly has skills useful to Gnosis. So it should be possible to have a mutually beneficial relationship. However - if there is doubt about that - then this should be addressed!

EDIT. @StefanGeorge was faster, had not seen the response - anyhow - I think mine is still useful to open up a potential discussion.

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Thank you @StefanGeorge and @mkoeppelmann for the additional context. However, there are several critical points that remain unaddressed.

TLDR:

  • karpatkey covers a lot of bases for Gnosis (too many?)
  • they overcharged (acknowledged by recent fee negotiation)
  • back-date all overcharged fees and consider them an investment in the round
  • ~20% kpk to GnosisDAO

“Take It or Leave It” Approach Leaves No Room for Negotiation

The framing of this proposal suggests karpatkey will proceed with or without GnosisDAO’s approval. That fundamentally undermines the DAO’s role. If this is truly meant to be a mutually beneficial partnership, why is GnosisDAO not in a position to negotiate terms? If anyone here has the upper hand, it is GnosisDAO.

Right now, this reads as a rubber stamping exercise rather than a real discussion.

Were Safe and Cow Successful Spin-offs for GnosisDAO?

The comparison to Safe and Cow raises an important question: Did GnosisDAO actually benefit from those spin-offs?

Gnosis retained roughly ~10% (?) of each project, and yet:

  • Safe now trades at a higher FDV than Gnosis itself
  • Cow trades in a similar valuation range

There is extensive literature on corporate spin-offs and carve-outs, and the goal is to unlock value for the parent entity and its stakeholders. Given that neither Safe nor Cow significantly returned value to GNO holders or the DAO treasury, how are these considered successful precedents for structuring karpatkey’s transition? We should be discussing lessons learned from these past spin-offs, not just repeating the same approach (or an even worse one).

Let’s Have Transparency on Lifetime Revenue from GnosisDAO, Safe, and Cow

While it’s clear karpatkey delivered some value, the real question is how much support it received compared to the “risk” it took.

A lifetime revenue breakdown from GnosisDAO, Safe, and Cow vs. other clients would bring clarity:

  • How much of karpatkey’s business was sustained by GnosisDAO?
  • How much revenue did it receive compared to the value it provided?
  • What percentage of its earnings came from Gnosis Family vs. external clients?

If karpatkey is making the case that it is independent and took significant risks, then these numbers should speak for themselves. If they are unwilling to provide them, we are happy to do so if provided the relevant wallets to retrieve this information.

If Fees Were Reduced, Does That Imply Karpatkey Was Overcharging?

You mention that fees have been adjusted over time, but let’s be honest - reducing fees is an acknowledgment that they were too high in the first place.

If karpatkey is truly aligned with GnosisDAO’s long-term success, wouldn’t the logical step be to transition away from high fixed fees, towards a performance-based structure + hurdle rate + HWM?

SOFR is 4.33%, but a mere 2% hurdle rate would completely wipe out any karpatkey performance fee. Mixing asset management with DeFi development obscures the fee structure and makes it difficult to scrutinize.

GnosisDAO Needs a CFO - Not Just Service Providers Who Extract Value

At this point, the real issue is not karpatkey - it’s GnosisDAO’s lack of a financial strategy.

GnosisDAO is incredibly successfully building top-tier projects and maintaining Ethereum-aligned principles, yet it consistently fails to capture the value it creates. Instead, that value leaks out to external service providers.

GnosisDAO should hire a CFO:

  • Someone independent who can oversee treasury management, ensure value is being retained, and negotiate contracts that actually serve the DAO’s long-term interests
  • A CFO with a clear mandate to prevent inefficiencies and eliminate financial leakages
  • A CFO who represents GnosisDAO—not service providers with a financial incentive to keep high fees

karpatkey charged ~$7M in fees last year. That’s an amount that should be actively managed by an internal financial officer—not dictated by a third-party provider whose incentive is to maximize its own earnings.

Gnosis should receive at minimum 20% of kpk, which is still a steal for karpatkey. Given the recent fee structure change, one approach could be to determine the overpaid amount by applying the new fee structure to past years and considering that amount an additional investment from GnosisDAO.

Make Gnosis Great Again #MGGA

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Thanks @mkoeppelmann for the transparency/sincerity! Let’s get real then.

Although I have to acknowledge what karpatkey has delivered for a treasury manager for the DAO so far (they have delivered a lot and acted as the main biz-dev team when Builders bullshit was still going on), we should also acknowledge a few facts on this mutually beneficial relationship as well as the current state of Gnosis Chain.

When we look at timeline charts, we can indeed get the illusion that there is sustainable TVL growth on Gnosis Chain. The reality, though, is after we remove Gnosis’s own funds as well as the mercenary capital from sexyDAI, it will be obvious that even in terms of TVL or attracting any actual user attention, we have been failing miserably to the point that we can simply call it “Gnosis and Frens Chain” at this point.

Here, I cannot say that it is completely karpatkey’s failure. However, setting one of the main goals as creating a thriving DeFi ecosystem on Gnosis Chain, it partly falls to karpatkey’s hands as well.

At the turn of 2023 to 2024, Gnosis established its main focus being the payments network, which was also in line with the previous xDai/STAKE team’s vision. Not bad, doable. Here, it was not rocket science to have an edge to build an upper hand in the expected upcoming competition. But in a time where “chain abstraction” (which imho is still bullshit as it simply adds more middlemen than traditional payment rails), we have been dealing with unreliable bridges as well as lack of liquidity for the Monerium tokens that everyone willing will need to get a hold of to be able to use the main product for payments. It took over a year to establish this deep liquidity, indicating a lack of foresight from karpatkey’s side or lack of communication between the actors.

What we needed instead of paying karpatkey a fortune, which they gladly took by overcharging, was simple onboarding to the chain. Sounds simple, right? However, even today, we still do not have direct onchain withdrawals to Gnosis Chain from the main onramps, which are - like it or not - still centralized exchanges. You can make integrations with a thousand bridges or chain abstractooooors, if you want your granma to be able to use the useful products you are building, you need easy onramps.

But anyways, let us not dwell on past wrongdoings from the DAOs side. And let me not stray away from the core of the issue being discussed here.

Gnosis, as a brand, in the Ethereum ecosystem is a strong one. Doing business, or even being the main treasury manager of Gnosis means a strong hand in negotiations to other potential partners, which many of Gnosis LTD ventures fail to see or acknowledge. Let us ask one simple question here, and I would love Marce to chime in here as well. How many of the other clients that karpatkey serves today would be possible without the initial backing of Gnosis? Or would karpatkey still survive today or be able to reach its size without overcharging Gnosis?

Also, I completely have to agree with @aurelius about taking lessons from spinoffs of Safe and Cow. Is this simply a communication problem from Gnosis side in failing to accrue value to the parent or were there other things involved in how these deals basically turned into a failure? Do we have to replicate the same mistakes here with the karpatkey spinoff?

Lastly, as I have mentioned my general dissatisfaction elsewhere in the forum as well with the recent karpatkey-led proposals devaluing GNO’s governance value , how confident are we to assign DAO2DAO relationships to karpatkey? Or should we, as the DAO, establish a separate governance “workforce” to make favorable deals for the DAO?

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As clearly pointed out here, karpatkey is very different from Safe and CowSwap.

Besides karpatkey being an external business, they are also a service business; they primarily render services through the skills of experienced individuals. When considering these factors, this proposal makes sense from our perspective.

Higher percentages may be justifiable with software businesses incubated within Gnosis DAO, but under these circumstances, 7.5% total ownership makes sense.

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Thank you for opening this space for dialogue and allowing different perspectives.

I want to express my support for the proposal to consider a larger token allocation for GnosisDAO. I understand that 7.5% is a reasonable figure since karpatkey is a service-based business and not a purely software project, but I also believe that the role GnosisDAO has played in its growth justifies discussing a more significant share.

I acknowledge the work karpatkey has done so far, especially in treasury management and in laying the foundations of the DeFi ecosystem on Gnosis Chain. However, it’s also true that there is still work to be done, such as listing Gnosis Chain on major centralized exchanges (CEX), which could significantly help attract more users and stable capital to the ecosystem.

Moreover, I disagree with the notion that sexyDAI represents mercenary capital. As a DeFi user, I consider sexyDAI a solid and reliable option, providing a useful tool to access liquidity and participate in different strategies without relying on volatile assets.

Ultimately, I support a larger GnosisDAO share in the airdrop, recognizing the work done while also highlighting the opportunities still available for the ecosystem’s sustainable growth.

Thank you again for the space to share my perspective!

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This proposal is somewhat confusing - what is the ask from us?

The previous proposal was misnamed as “GnosisDAO spinning off karpatkey” which is quite clearly not the case - karpatkey is acting on its own accord as illustrated by

Why not just airdrop the 7.5% to GnosisDAO. What is the purpose of creating this added bureaucracy and forum noise. Seems like the main purpose this proposal achieves is to protect karpatkey from future claims by GnosisDAO that we should be receiving more than the 7.5% offered here?

Also worth noting that deleting the [GIP92](https://GIP-92: Should Gnosis DAO spin-off karpatkey DAO and deploy the KPK Token?) from Snapshot once it became clear it is loosing, especially without mentioning anything in the forum a priori was an act clearly prioritising the interests of the proposer over the integrity of GnosisDAO governance process and transparency.

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