GIP-92: Should Gnosis DAO spin-off karpatkey DAO and deploy the KPK Token?

Governance GIPs
21

We appreciate this update memo and the modifications put forward. karpatkey has had an exceptional year with more and more wins coming each month, and we believe it’s fantastic for GnosisDAO that another incubated project is thriving and delivering value back to this community.

Critical Feedback

Further to @gno-investor 's critical feedback above, our feeling is that the basic 10% allocated to karpatkey is reasonable, in view of (i) the amount invested in karpatkey to date; (ii) the success that karpatkey’s had from its engagements both with Gnosis, Gnosis ecosystem projects and other large DAOs across the industry; and (iii) karpatkey’s rapidly improving financial position.

So we took on all the risk from the beginning and have very little upside

With respect, it’s hard to agree that the karpatkey team didn’t take on any risk here. They threw their entire livelihood at supporting GnosisDAO at a time where it was not clear how that would turn out. Now that they’ve had enormous success, it’s easy to say that the risk profile was obvious in hindsight. In reality, we believe the vast majority of karpatkey’s success comes from the work of its teams.

This critical feedback also seems to ignore a few of the other benefits that can be gleaned from karpatkey’s update here:

  1. The token swap element is good for GNO and increases karpatkey’s “skin in the game” in GnosisDAO, meaning more alignment between the two;
  2. karpatkey have amended the proposal to adjust for GNO price decreases, ensuring that the same USD value is reflected in the investment, avoiding a decrease in the value of their investment that would have occurred otherwise;
  3. karpatkey have committed to devoting 10% of revenue to purchasing GNO tokens, again increasing alignment between the two;
  4. the new $200m valuation announced in this post reflects a significant increase on the original value of Gnosis’ investment in GIP-20 of $50m. That’s a 3x return, or >63% CAGR on the initial investment. Clearly GnosisDAO has done well out of this investment.

For us, the real point of this proposal is that GnosisDAO has an opportunity to expand its share of karpatkey’s success at a decent valuation. If karpatkey’s trajectory continues as it has, the addition $5m investment may prove even more successful than the initial $1m has done to date. We strongly support these plans and look forward to further updates.

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