GIP-95: karpatkey DAO Service Extension
- In Favour
- Against
GIP: 95
title: karpatkey DAO Service Extension
author: karpatkey
type: Meta
created: 2024-04-03
Simple Summary
After the approval of GIP-20 and GIP-58, at karpatkey DAO we have been working steadily on the management of GnosisDAO’s treasury. Similar to other treasuries we manage, we have seen the interest of DAOs to diversify their treasuries by adding exposure to real world assets (“RWA”) as well as interacting with real world entities for services in the interest of GnosisDAO.
We therefore propose that the scope of the treasury management services as carried out presently, be expanded to cater for the possibility to invest in RWA.
Abstract
GnosisDAO’s treasury has been growing consistently since its management was delegated to karpatkey DAO. A further diversification into RWA and enabling a better interface with offchain services and entities will help its long-term sustainability and therewith the continuity of current and future operations of GnosisDAO.
Motivation
karpatkey’s expert treasury management has effectively lightened GnosisDAO’s workload, contributing positively to its operations. However, as GnosisDAO has expanded and the DeFi ecosystem evolved, new challenges have emerged. Addressing these challenges involves tasks that divert attention from GnosisDAO’s primary objectives, potentially impeding its progress. Recognizing this, karpatkey DAO has been actively expanding its role and dedicating more resources to meet these emerging demands. Specifically, the dynamic nature of the DeFi landscape has recently highlighted the necessity for GnosisDAO to gain exposure to Real World Assets (RWA), a need that has become apparent over the past year or months. In addition, it is deemed desirable for the DAO’s treasury to have access to off-chain service providers from time to time.
Specification
The scope of the services provided by karpatkey DAO, as set out in the GIP-20 and GIP-58, shall be extended to cater for investment in real world assets. The proposed changes to the paragraph titled “Treasury Management” are indicated below in italics. Except as indicated in this proposal, any other elements of these two prior GIPs shall remain applicable without changes.
Treasury Management
- Diversification research
- DeFi strategies research / Alpha research
- RWA strategies research
- For products RWA that may be of interest, due diligence into legal structure, team, regulatory risk, counterparty risk, etc.
- Treasury execution:
- Non self-executable GnosisDAO proposals
- Gnosis Chain new protocols liquidity bootstrapping
- Position optimisations and creation of new ones
- Security protocol design and security audit for the tx execution process. Emergency protocol design and maintenance
- Continuous loans evaluation and management to prevent liquidation
- GNO liquidity provision and maintenance: Monitoring the liquidity provision on mainnet and GC, checking the price impact for swaps
- DeFi user experience improvement on Gnosis Chain: Bug reporting and integrations
- Reporting:
- Periodic reporting
- Dashboard creation and maintenance to monitor the yield of investments, rewards distribution and overall treasury growth trend, health and diversification
- Gnosis Chain ecosystem health monitoring
- Performance analysis of the different bridges from and to the GC
- Bridge GNO and market make it on other networks as well as on GC itself
- Engage in lending activities with institutions with the objective of enhancing liquidity of GNO on exchanges
- Research on assets in need of improved liquidity in terms of bridges to GC
The scope of this mandate also extends to any legal entity whose purpose is to act in the interest of GnosisDAO (and not of other organizations outside of the Gnosis ecosystem). The authorizations of karpatkey (including any limitations thereto) in respect of GnosisDAO’s SAFE shall apply equally to actions with these off-chain legal entities. More specifically, the Gnosis Asset Holdings Foundation which will initially be set up to interact with the real world assets offered through Centrifuge, shall also be authorised to enter into arrangements in relation to other investments that are aligned with the GnosisDAO’s objectives, and to engage other service providers (within the boundaries of this mandate) to allow for the administration and operation of the Foundation to serve this purpose.
Fee Structure
- The fee structure shall remain unchanged.
Risk Analysis
Working with real world assets and entities adds an additional layer of risks. The added risks principally consist of:
- counterparty risk: depending on the nature of the underlying asset, there will be a number of additional parties involved that are not necessary for on-chain investments: crypto<->fiat broker, custodian, fund, asset manager and others
- regulatory risk: in particular in crypto-unfriendly jurisdictions, the touchpoints with centralized counterparties might increase risks in case of adversary regulations being promulgated
Risks may be mitigated through appropriate due diligence on the proposed arrangements and structures which offer exposure to RWAs, making use of time-tested legal measures which offer some degree of recourse to the underlying assets, and pursuing solutions in jurisdictions that are open to and supportive of blockchain and digital asset innovations.
Disclaimer
Although karpatkey will do its utmost to analyse and monitor risks, we cannot be held responsible or liable in case any of these risks materialises.
Miscellaneous
Entire Agreement
This Proposal (if accepted), together with GIP-20 and GIP-58, constitute the entire and exclusive agreement between the Parties regarding its subject matter and supersedes and replaces any previous or contemporaneous written or oral contract, promises, assurances, warranty, representation or understanding regarding its subject matter, whether written, coded or oral.
Each Party acknowledges that in entering into this Agreement they do not rely on, and shall have no remedy in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement.
The plans outlined in this proposal are subject to discussion by the GnosisDAO and may need to be (re)structured to take account of legal, regulatory, or technical developments as well as governance considerations. This document should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in any transactions.
