Thanks for the proposal. I appreciate your honesty and candor. There is a lot to like here. Also some major concerns. Let’s break it down.
What is the Gnosis Ltd. Strategy?
I would prefer to see an updated strategy post from Gnosis Ltd instead of this ad hoc proposal without greater context. What is the Gnosis Ltd position on a 3rd party app that does not really fit into their B2B Gnosis Pay strategy? Or does it? 
As I’ve stated before, I believe Gnosis Ltd must downsize the organization, focusing on how it can generate real value to the crypto community in general, and long-term GNO holders specifically.
I believe that happens by spinning off Gnosis Pay and Gnosis App (more on that below), reducing costs significantly, and repositioning Gnosis Chain as the cypherpunk L2. Yes, security on Gnosis Chain can be part of that differentiation, but imo it’s not enough. Gnosis Chain as the home to cypherpunk Ethereum is much more inspiring! And aligned with the values of this community, imo. Let’s reorganize around that! 
Spinning off Gnosis App is a good thing! But what @deep45shah said about Gnosis App surely applies to Gnosis Pay:
“A consumer app hunting for PMF needs one accountable owner instead of multiple stakeholders, a small focused team, quick iterations, and full operational freedom.”
and
“Inside Gnosis, decisions about the app are made - rightly - with the whole of Gnosis & the ecosystem in mind. That can work, but it can also hold a consumer product back from doing what it needs to do right now and with the right speed, regardless of a multi-year Gnosis-wide strategy.”
and
“…getting from linear to exponential takes a speed and focus that’s very hard to sustain inside a larger organization.”
So bravo for GIP-152, but let’s see a GIP for spinning off Gnosis Pay. Let’s have the remaining team focus on new apps and infra to make sure Ethereum wins, and in the right way. And also attracting more cypherpunk builders to Gnosis Chain (with incentives, technical support, liquidity, etc.).
EEZ is the perfect example of this! But this type of strategic restructuring won’t succeed without focus.
Circles: The Emperor Has no Clothes
I always loved the idea of Circles. It was promising in theory. BTC has failed as a transactional currency, ETH is too volatile and more an SoV. We need a native, decentralized cryptocurrency built for spending, not holding. But after 2+ years of trying to make it work, I’m beginning to believe CRC is a dead end.
Why? One primary reason:
Circles is too complex.
Virality and complexity do not mix, it’s like oil and water, pizza and pineapples.
And virality is critical for a successful currency. I don’t think you can achieve virality without being memeable. This Twitter post sums it up perfectly. A snippet:
The world needs its own credibly neutral unit of account that is stable, scalable, immutable, uncensorable, and maybe most importantly memeable.
CRC is not memeable. If the world consisted exclusively of blockchain engineers and Economics PhDs, then maybe CRC could cross the chasm, go viral. But that’s clearly not our world.
Just try to explain CRC to a non-crypto person, it’s hilarious. Try to explain CRC to a crypto native person, and it’s still a very difficult conversation.
Go watch the recent Devcon video WTF is Circles and see if it helps. Nothing against the competent presenter, but it’s almost an impossible task! You may as well try to explain quantum physics.
“So I can mint my own CRC, but my CRC are completely different from your CRC, but kinda related, so I shouldn’t trust the wrong people or then I could lose my CRC, but eventually I can trade my CRC into gCRC and swap them for EUR, or maybe start my own community and swap my CRC into a community CRC that I somehow control, but if I hold CRC I’m subject to demurrage, which is what again?”
You can see the results in the numbers:
- WAU grew to ~4,500 by June then fell to ~4,100.
- WEAU (a better metric) peaked near 1,200 in late May and has declined every week since to 879.
- The economically active share fell from ~28% to ~21%.
Circles is basically giving away free money. Just mint free money! Come and get it! And yet, we have limited PMF. With free money…
I also believe - but cannot prove - that Gnosis Pay is onboarding more people to Circles than Circles is onboarding people to Gnosis Pay! So the exact opposite of what needs to happen.
Is Gnosis App the Solution?
Perhaps the problem is the lack of a mobile app that helps onboard new users (neglecting the fact it already exists)? We abstract away the complexity of Circles, add some gamification, then viola, virality! Maybe. I’m super skeptical, but perhaps.
However, GIP-152 is not just about CRC virality per se, it’s about a business case that justifies a 4M USD investment and a 15M USD valuation. What kind of annual cash flow would justify a 15M USD valuation?
Assuming a cost of capital of 15% (it should be much higher, but whatever), we would need to see over 2M USD per year profit (recurring) from the app to justify the valuation. Profit, not revenue. Every year.
How is Gnosis App going to generate over 2M USD in free cash annually anytime soon? Of course the answer is that it’s not. Which means the 15M USD valuation is massively inflated.
But you don’t have to take my word for it. In her recent post on The Economic Case for Gnosis App, @ernst wrote:
Gnosis App is early and loss-making. In the first week of June, weekly active users with high intent were 1,245, weekly active users opening the app were 4,631, and monthly active users in May were 9,636. Break-even sits at 800,000 to 1 million users.
GIP-152 forecasts 100k weekly active users after 12 months, or just 10% of break even! And those aren’t necessarily economically active users, just people who mint CRC. So again,15M USD is not a realistic valuation for what is being forecasted by the team.
What is to be done?
Well, as previously stated, I do like the idea of spinning off the team as part of a larger restructuring. But I would suggest the following changes:
- Reduce the valuation to 5M USD. A 15M USD valuation is extremely generous. I think 5M USD is also a gift, but ok, at least it’s defensible. There is no way a consumer app using IP from Gnosis, integrating other 3rd party solutions (Circles, Gnosis Pay, CoW etc.), should be worth anywhere close to 15M USD. If you disagree, post the spreadsheet showing your future revenue and NPV calculations! Not MAU, but revenue and NPV. Let’s see how you get to a 15M USD valuation…
- Release the money in tranches. 3M USD can be tentatively committed, but only 1M should be paid up front. We should establish key metrics for 6 months and 12 months. When those numbers are hit, additional funds are released. The key metrics should not include MAU, which is more a vanity metric than a value driver.
Success Metrics
This section warrants more discussion, it’s just my proposal! But the current idea of the DAO paying 3M USD up front for a solution with limited PMF seems unrealistic. Better:
- 1M USD when the updated GIP passes
- 1M USD in six months when success metrics are achieved
- 1M USD in 12 months when success metrics are achieved
Revenue is the primary metric that matters, and because the fee switch is “on from day one,” it’s measurable from day one. I would therefore propose releasing future funds based on the following key success metrics:
Metric 1: Net-new cardholders acquired through the app. Sign ups must happen in the app.
Metric 2: Total revenue generated by the app. This should be net of incentives spent to generate that revenue. This is by far the most important metric imo.
Metric 3: Revenue per economically active user. Might give us hope for the future, even if total revenues are low. 
I would ask the team to come up with numbers for the 3 metrics above they believe they can achieve after 6 months and 12 months. Their numbers should be both realistic and justify the project valuation (currently at 15M USD, but hopefully reduced significantly). Only when the team hits those success metrics are future funds released.
With those changes, I think GIP-152 is a net positive for GNO token holders.