GIP-135: Should Gnosis DAO grant RaidGuild a 50k stipend to fund the audit of an Euro pegged CDP stablecoin on Gnosis using Liquity V2 + liquidity agreement in exchange for 15% of governance token

[Elco]

GIP: 135
title: Should Gnosis DAO grant RaidGuild a 50k stipend to fund the audit of an Euro pegged CDP stablecoin on Gnosis using Liquity V2 + liquidity agreement in exchange for 15% of governance token.
author: RaidGuild
status: Phase 2
type: Funding
created: 2025-09-03
duration: 3 months
funding: 50k

Category

Funding - Rewards/Reimbursement

Should GnosisDAO fund the creation and launch of gEURO, a euro-pegged Liquity V2 stablecoin on Gnosis Chain?

Simple Summary

We propose to co-fund and launch gEURO, a €1.00-pegged CDP stablecoin on Gnosis Chain. gEURO is a Liquity V2 fork operated by RaidGuild, backed by ETH, BTC, and Gnosis-native assets, natively yield-bearing, and designed to integrate with Gnosis Pay, RWAs, and Circles.

Abstract

• gEURO: euro-stablecoin using Liquity V2 mechanics; collateralized initially by sDAI, wstETH, GNO, osGNO, WBTC (expandable post risk review).

• Yield-bearing: 75% of borrowing fees accrue to gEURO holders; 100% of liquidation fees to stability pool depositors.

• Peg: Always redeemable for €1.00 of collateral; redemptions prioritize lowest-rate vaults.

• Gnosis alignment: GNO can remain delegated while used as collateral; governance receives a protocol revenue share and a future token allocation.

• Ask: $50k grant for audit + legal; and a non-binding liquidity intent (e.g., ~$5M at launch, scalable with growth).

Motivation

1. Ecosystem need: With USD volatility and Gnosis Pay’s growth, euro-centric DeFi is a priority.

2. Differentiation: Decentralized, on-chain collateral and natively yield-bearing stablecoin—distinct from custodial euro tokens.

3. Strategic fit:

   • Native euro settlement layer for Gnosis Pay.

   • Deepens GNO utility (borrow against GNO while keeping governance delegation).

   • Enables RWA issuance/use on Gnosis Chain.

4. Growth: Target $25M TVL within 18 months via ecosystem integrations.

Specification

Core Protocol Design

• Liquity V2 fork (license secured).

• Collateral: sDAI, wstETH, GNO, osGNO, WBTC at launch; others via subsequent risk assessments.

• Vaults: Each position is an NFT (Non-Fungible Vault), enabling transferability and integration with other DeFi protocols.

• Borrowing: Users choose their own interest rate (flexible, fixed-rate style).

• Fees: 75% to gEURO holders; 25% governed (e.g., LP incentives).

• Peg: Redemptions at €1.00; lowest-rate vaults are redeemed first; variable redemption fee.

Unique Gnosis Features

• GNO delegation: Collateralized GNO remains delegatable.

• DAO upside: Portion of protocol revenue + 15% of any future governance tokens to GnosisDAO (proposed with vesting/lockup; details to be finalized with the DAO).

Implementation Plan (≈3 months)

1. Finalize features + Solidity work.

2. Smart-contract audit & testnet deployment.

3. Frontend, documentation, ecosystem integrations.

4. Mainnet launch & marketing rollout.

Milestones

• Month 1: Feature freeze; contracts on testnet.

• Month 2: Audit complete; frontend + docs ready.

• Month 3: Mainnet launch; liquidity bootstrapping.

Budget & Ask

• Grant: $50,000 (security audit + legal).

• Team funding: RaidGuild covers all other design, development, and operational costs.

• Liquidity: Non-binding liquidity intent by GnosisDAO/partners (e.g., ~$5M at launch; scale with adoption).

Risks & Mitigation

• Contract risk → Third-party audit, Liquity-based code, comprehensive tests.

• Peg risk → Redemption mechanism, arbitrage incentives, stability pool.

• Regulatory risk → Early legal review; governance control over new collateral/debt limits.

• Adoption risk → Liquidity intent + integrations with Gnosis Pay, RWAs, Circles, native DeFi.

Critical Success Factors

• Robust €1.00 peg; attractive native yield.

• Smooth UX and onboarding; strong integrations.

• Transparent DAO alignment (revenue share, token allocation).

• Security-first delivery and audit assurance.

Benefits to GnosisDAO

• Treasury upside: 15% of any future governance token (with vesting/lockup) to GnosisDAO.

• Product fit: gEURO as a default euro savings complement to EURe on Gnosis Chain.

• Ecosystem synergies: Gnosis Pay, RWAs, Circles.

• Operator commitment: RaidGuild will run and grow the protocol long-term.

About RaidGuild

We are RaidGuild — a Web3-native design and development collective active since 2019. Forged in the MetaCartel community, we’ve delivered smart contracts, protocol interfaces, and DAO tooling across Ethereum and beyond. Notably, we built the original OmniBridge for xDAI (now Gnosis Chain).

This stablecoin initiative is part of our strategy to build and operate community-owned financial primitives on Gnosis Chain, and to steward the infrastructure we create over the long term.

Useful links: gEURO Litepaper • RaidGuild Deck

Forum Poll

• In Favour

• Make No Changes

• Abstain

[refri]

are you affiliated with https://www.coingecko.com/de/munze/raid-token ?

[nesk]

I’m in favor of this proposal - in fact I worked closely with the team to craft some terms that IMO made sense to Gnosis DAO.

• Gnosis Chain has positioned itself as a Euro chain, and having large Euro, sustainable yields is important. atm a high euro yield is subsidised by the DAO, but this obviously doesn’t scale. This project is a step in the right direction to create more sustainable yields.
• RaidGuild has proven itself technically by building the AMB, and is the right team to execute on this. They also have very relevant experience, as they have built Nerite
• Gnosis DAO will retain upside on this project, meaning that if it’s successful, it’s investment will repay itself easily

[Elco]

Thank you for supporting the proposal, and of course, the support during ideation, Nesk.

[citrullin]

so just another instrument to leverage and gamble in DeFi.
Just in Euro this time, because everyone is scared the USD may collapse any time soon.
As well as the whole Tether topic. Is that the path Gnosis also wants to go down now?

In a world that has a horrible wealth distribution, you want to add to the problem by having more instruments to extract value from poor?

Where are the things that actually support people that create and not yield around aka gambling with extra steps?

[citrullin]

With the growth of Gnosis Pay and the recent weakness of USD there is demand for more Euro-centric stablecoins and defi applications. GEURO is a Euro pegged CDP stablecoin on Gnosis using Liquity V2.

I don’t even disagree on this point. Get in contact with Monerium. Get a regulation too. Find a way to issue, together with them, ONE EURe stable coin that can be used by multiple providers. Maybe it makes sense to have a permission chain with rollups? Idk those are some interesting thoughts.

And then, you make a EURe ↔ eYuan (BSN I assume) so it’s straight forward to swap.
More importantly you can straight up get rid of SWIFT, Visa and Mastercard for so many transactions.

That would get you somewhere, this. This looks straight up like another way to gamble.

[Elco]

Thanks for raising these concerns. It’s true that any borrowing system can be used for leverage — that’s how CDPs work. But debt itself isn’t just speculation: most people don’t pay cash for a home or a car, and credit markets are part of how real economies function.

gEURO is meant to bring that same kind of useful financial primitive on-chain, but in a transparent and community-owned way. It gives Gnosis Chain a reliable euro-denominated stablecoin, always redeemable at €1.00, that integrates with Gnosis Pay, Circles, and RWAs.

For the ecosystem, that means governance tokens and other Gnosis-native assets can attract liquidity while generating yield from borrowing fees, not from speculation. And a share of that upside flows directly to GnosisDAO’s treasury, aligning benefits with the community.

So while some users may borrow to lever up, the collective outcome of users’ actions irregardless of intent is to create stable euro liquidity, real utility, and shared value for the Gnosis ecosystem.

[citrullin]

Well. When I look at all these instruments, all I see is: Gambling, Money Laundering, Sanction Avoidance and Human trafficking. If that’s the path Gnosis wants to go down too, I am out of here and really can say with confidence 100% of DeFi is a scam. So, I really hope this doesn’t go through.

We already have a HUGE issue with wealth distribution. And all you people enable is making it worse.
Not thinking about alternative approaches how you enable people. You are all so focused on the Greed.

I am not even against the idea of bonds/loans in general. Just mentioned it here, but there is a big caveat. It’s not based on capital, but social connections. But let’s pretend hyper-capitalism doesn’t have dark sides and keep the Casino rolling as long as we can. . . lmao ohh boy.

But you are probably so deep into sunk cost fallacy at this point, you would like to push this through, right?

[ripotchefr]

Hello,

I am wondering about Gnosis’s long-term vision in Europe. It will come as no surprise to anyone that the European Union is very confused in its stance toward blockchain innovations and stablecoins.

We have very little information about what form the digital euro will take, while the U.S. administration has clearly decided to strengthen the use of centralized stablecoins.

So, following this proposal, I would like to know Gnosis Ltd’s position regarding its strategic outlook for Europe. It is possible that initiatives of this kind may simply turn out to be a waste of money.

If Europe decides to make a U-turn, Gnosis does indeed seem well-positioned to capture the European market. But are European policymakers at least aware of Gnosis’s existence? Does Gnosis have interactions with European institutions, or does it intend to approach them?

I would also add that the use of EURe through Gnosis Pay is still restricted, and this remains a particular obstacle to the card’s adoption—especially in France, where every transaction is likely to trigger a taxable event.

Thank you

[citrullin]

But are European policymakers at least aware of Gnosis’s existence?

Glad you ask. I have been a little bit more around those circles (pun intended). It’s fair to say they don’t like me to poke around, yet people keep letting me in. No, they are not.

I am wondering about Gnosis’s long-term vision in Europe. It will come as no surprise to anyone that the European Union is very confused in its stance toward blockchain innovations and stablecoins.

Simply put, there is none. In their view it’s more of a side-quest than anything. They are more concerned about FinTech in terms of Klarna etc. They want to attract Silicon Valley to Europe. They don’t seem to make the connection between the downfall of the USA and Silicon Valley. In their head those things are separate.

If Europe decides to make a U-turn, Gnosis does indeed seem well-positioned to capture the European market.

If anything, you can rely on the EU not doing that. Or at least having some proper transformation. The EU is slow and stable. The whole CBDC debate has been going on forever. the CCC is probably also in opposition to a centralized approach behind the doors a lot.

This having no vision is also an opportunity. At the end of the day what they are concerned about is getting rid of SWIFT, Visa and Mastercard. Basically anything that swaps over USD. So, just do EURe ↔ eYuan (announced it a couple of weeks ago, would be neat to piggybank here) swaps. And later, once Mercosur is signed swaps for all those currencies. If you can do that in the way Monerium operates, they won’t really question it. They have other things to worry about, EU military and such, this is really not the main concern for them rn.

On a side note: A lot of policy makers aren’t even aware of the fact Ethereum originates out of Europe. It’s quite hilarious.

It’s even worse than that, authorities don’t even look at stuff when you report it to them. (check my medium, can only do 2 links)
Not because of a lack of care, it’s mostly a lack of competency and capacity.
You cannot investigate anything if you don’t have the people to do so.

Hope that adds some context and I didn’t introduce more confusing. I can do that from time to time, sorry

[NolanV]

I’m not against the principle of a non-custodial EURO, but I do think it’s a waste of time and money to do it now.

Gnosis seems to want to prioritize product sustainability over growth, why not… But I don’t see how a gEURO would be sustainable when we’ve seen that even dollar alternatives struggle to be adopted, let alone be profitable.
Furthermore, for months now, we’ve seen EURe’s available liquidity decrease, and its volume has been divided by ten.
This lack of volume will require constant incentives to remunerate gEURO liquidity providers. I don’t see this as a more sustainable solution than incentivizing borrowing via Aave, for example.

Furthermore, if the DAO still wishes to invest in this project, there is another issue to address before considering a production launch.
The on-chain liquidity for GNO is simply problematic. How can you create a CDP platform collateralized by GNO when €1 million is enough to drive the price up by more than 10%? If you don’t hire a competent market maker, you will either be forced to have an unprofitable loan-to-value ratio or risk accumulating bad debt in the event of a sharp price drop.

You just have to look at the on-chain volatility spikes GNO has had over the last two years. If you launch a CDP platform, the effect will be amplified by forced liquidations—it’s going to be a bloodbath.

I hope the DAO takes my message into account, so we don’t end up with another dead product in a year or two.

[nesk]

Thanks for your comment @NolanV, here’s my view:

@NolanV

Gnosis seems to want to prioritize product sustainability over growth, why not… But I don’t see how a gEURO would be sustainable when we’ve seen that even dollar alternatives struggle to be adopted, let alone be profitable.
Furthermore, for months now, we’ve seen EURe’s available liquidity decrease, and its volume has been divided by ten.
This lack of volume will require constant incentives to remunerate gEURO liquidity providers. I don’t see this as a more sustainable solution than incentivizing borrowing via Aave, for example

I agree that it’s challenging, however Bold has a built-in “flywheel effect” that redirects 75% of interest paid by borrowers to Savers. This creates a minimum APY for “sgEURO”, and allows us to create yield opportunities for Euro with a cheaper basis than with Aave incentives. Moreover, if Aave lists sgEURO, it’s APY will cascade to Aave too.

Regarding your comment on liquidity and volumes: you know better than anyone that last years volume was purely driven by the pool misconfiguration. And it’s not that liquidity has shrank but actually that fees were raised. This doesn’t make it better tho. @karpatkey needs to do a better job ensuring that EURe has very deep liquidity with very low fees.

@NolanV

The on-chain liquidity for GNO is simply problematic. How can you create a CDP platform collateralized by GNO when €1 million is enough to drive the price up by more than 10%? If you don’t hire a competent market maker, you will either be forced to have an unprofitable loan-to-value ratio or risk accumulating bad debt in the event of a sharp price drop.

Once again, you’re right in pointing out the problem, but it’s not as bad as you claim.

You can swap up to $1.2M worth of wstETH with ~5% of slippage. The 7% difference is due to CowSwap quoting incentivisation not being optimised. This is already being addresses by karpatkey and the CowSwap team. However, a liquidator will not care about Cow quoting engine - they will simply choose the best route.
Regardless: you’re right and liquidity should be improved. But it’s unrelated to this proposal. It should be improved even if we didn’t move forward with it.

Here’s why I think that this product will succeed and we won’t end up having another dead protocol:

• I’ve built a very simple model, setting as target Aave markets variables. The required amount in incentives to achieve the same APY level as was seen in Aave when doing this analysis (taking some basic assumptions) was 8x less than what we are currently paying.
• There’s likely not a lot of demand to mint the euro stablecoin on its own - gEURO will likely not be the mechanism of choice by traders to do leverage. However, there is indeed demand for euro yield products. This has been proven by Aave euro deposits rapid growth (in Gnosis, Base and Mainnet) after incentives kicked in. This demand will rise the price of gEURO - which will create incentives to mint and sell for EURe.
• Incentives can be split by Gnosis DAO, RaidGuild and gEURO itself: airdrop speculators will likely play their role.

[NolanV]

I thank you for this comprehensive and honest response. I would just like to clarify two final points.

@nesk

I agree that it’s challenging, however Bold has a built-in “flywheel effect” that redirects 75% of interest paid by borrowers to Savers.

It is important to keep in mind that Bold is currently being actively used in anticipation of airdrops from ALL protocols that have bought licenses from Liquity. The demand for Bold is therefore not organic and it will likely end up like dozens of other decentralized stablecoins, which is to say, a niche market.

Attempts at on-chain euro have been made multiple times and have all failed once incentives were exhausted (Jarvis, Angle, Avalanche, PAR, etc.). Monerium is primarily used for GnosisPay and SEPA transfers. I am not saying there is no utility in creating yield products in EURO; on the contrary, I would be the first user of such products. I am merely stating that the market is very small, so it seems a bit strange to make the bet even riskier by adding a layer of collateral, stability pool, variable rate liquidation, etc.

@nesk

You can swap up to $1.2M worth of wstETH with ~5% of slippage.

Your target is $25M TVL, and for this target, the available on-chain liquidity is greatly insufficient, despite the currently very favorable market conditions.
I maintain that before launching a CDP using GNO into production, it is first necessary to ensure that liquidity is present and, above all, reliable, which must be taken into account in the final cost of the project.

This is a very interesting discussion, and I am pleased to see Gnosis supporting projects that are somewhat more ambitious than social experiments.

[barbarossa]

all fair points

regarding the question if the current market size is sufficient enough for onboarding such a product, i personally believe being early in conducting experiments like this can be an advantage.

there is a lack of opportunities in defi space for non-usd stablecoins. as dollar depreciates rapidly, euro/chf based stablecoins are seeing an emerging market. instead of waiting for the market to mature further, launching products like gEURO on a smaller scale is a good way to gauge market sentiment and also mobilize liquidity flow (especially from mid-large dollar stablecoin holders that look for diversification onchain). thinner liquidity is the premium that some early users with size have to pay if they want to seize the opportunity, and meanwhile we will work on improving it.

the $25m target may look too optimistic given the current onchain liquidity, however, as long as there is a demand, liquidity will follow. the real challenge is how we can help raidguild team grow and attract more users.

additionally, from the perspective of r/r, it’s a relatively small investment that potentially can generate lots of value

[cupojoseph]

I made a simulator for checking the interest rate that would be generated from the stability pool

Stability Pool APY Calculator - Professional Financial Tool

@barbarossa

additionally, from the perspective of r/r, it’s a relatively small investment that potentially can generate lots of value

this is the biggest point IMO. The ask here is very reasonable, Raid Guild is paying from its own treasury (which has been on gnosis chain for years) for the rest of development costs. And if it works it could be huge.

Raid Guild literally created the first erc20 bridge for Gnosis chain, so its the best possible group to get to build more stuff there.

[Karpatkey]

We’re supportive of this initiative because it strengthens Gnosis’s positioning as an FX-focused chain. A decentralised euro stablecoin would be a valuable addition to the ecosystem, complementing Gnosis Pay and diversifying beyond USD-centric DeFi and integrations.

From a governance perspective, this feels like a strategically aligned experiment worth pursuing, provided that collateral parameters are set conservatively to safeguard against systemic risk. From a treasury management perspective, we are available to work with the RaidGuild team to support them on the wider ecosystem initiatives we are tasked to complete.

[citrullin]

Is it? Or are you just biased here as well and want to make number go up, no matter what?

Honestly guys, you kind of want me to not use Circles again, if that’s the mentality we are pushing in the industry now. Kind of concerning the entity controlling most of the Gnosis network is all in on gambling mentality. What a shitshow.

If FX would be your actual concern, you would talk to the CCP and do eYuan ↔ EURe swaps. On Circles, on Gnosis, whatever. You would do actual economy shit and not zero sum games with extra steps.

Idk why anyone gave you power or isn’t distributing it more. Now we are in control of yet another big tech bullshit show. Thanks for nothing.

[CryptosNF]

I’m in favor of this proposal

I don’t think it’s a huge amount of money to run the test and launch the project, especially since it aligns with a truly decentralized DeFi vision, with Gnosis aiming to position itself as “Gnosis 3.0” focused on payments and FX.

Now, I do have a few questions:
1. Why did you choose a Liquity v2 fork?
2. Have you looked into FX Protocol? There’s also a friendly fork on BNB called Sigma.money, so Fx protocol are open to the expansion of their project maybe
3. Have you explored whether such mechanics could also apply to GNO trading or to a decentralized stablecoin?

I’d be curious to know if you’ve considered these angles

[Ignas]

Love the idea.

Most of the stablecoin growth today comes from TradFi yield: they scale faster but depend on ever decreasing yield.

CDP stablecoins instead are native to DeFi, offer a new source of yield, and stay closer to the crypto ethos.

I especially like the inclusion of GNO as collateral. This gives GNO holders real utility since they can borrow against GNO without selling it, while still keeping governance rights.

That is a strong alignment with the ecosystem.

The cost of launching gEURO is small.

The bigger challenge will be liquidity and integrations. A clear plan for user experience and adoption is needed, but without blocking competition.

If the DAO tries too hard to avoid fragmentation it may settle for a weaker stablecoin instead of encouraging innovation.

Finally, the growth target of 25M feels too low. With the right incentives, including potential GNO rewards, adoption could be much faster and bigger.

[Elco]

With the positive conclusion of the poll here, this proposal, GIP 135, has been moved to phase 3 on snapshot: https://snapshot.box/#/s:gnosis.eth/proposal/0x2e08952c22ca96dbee9fb6e8ba2ee4d3df0d3994e18d38f819cfb8e228d39384