GIP-96: Should the GnosisDAO allow the legal conduit being set up to onboard Centrifuge Prime, to also hold other investments, including those made by the Gnosis Builders prior to their dissolution?

Governance GIPs
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GIP-96: Should the GnosisDAO allow the legal conduit being set up to onboard Centrifuge Prime, to also hold other investments, including those made by the Gnosis Builders prior to their dissolution?

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GIP: 96
title: Should the GnosisDAO allow the legal conduit being set up to onboard Centrifuge Prime, to also hold other investments, including those made by the Gnosis Builders prior to their dissolution?
author: peer2peer
type: Meta
created: 2024-03-26

Executive Summary:

With the Dissolution of the Gnosis Builders, the bulk of the funds as approved under GIP-38, and not yet spent, have been returned to the DAO. Some investments are, however, currently illiquid as they were invested by the Gnosis Builders in early stage projects. Such investments inherently carry a lesser degree of liquidity, and may contain conditions relating to vesting, lock-ups, future delivery obligations (e.g. upon the occurrence of a token generation or other trigger event) etc…

This proposal intends to seek a vote from the GnosisDAO to enable the legal conduit, Gnosis Asset Holdings I Foundation (the “Foundation”), which is being set up to onboard Centrifuge Prime as described in the update to GIP-91 posted here as GIP-94, to also hold other illiquid investments, including those made historically by the Gnosis Builders.

Motivation

The Gnosis Builders team was established under the GIP-38 which introduced an ecosystem development effort with the objective to support developers and projects building on Gnosis Chain with investments, grants, technical support, business development and marketing.

The intention was to provide funding for three years and to fully spend the funding during this initiative. However, prior to the full allocation of funds set aside under GIP-38, the Gnosis Builders dissolved and is in the process of returning assets to the GnosisDAO treasury. Some of the Gnosis Builders team joined a re-invigorated Gnosis core contributor team, others remain involved as part of the DAO or wider community.

The bulk of the funds not spent by the Builders team have been returned to the DAO as described in the follow-up report: Gnosis Builders 2023 - Governance - Gnosis. Some of the investments made by the Builders are illiquid since the tokens are slated for distribution to the DAO treasury but are still vesting, locked or non transferable yet as described here: Gnosis Ventures GIP-38 - Treasury - Gnosis.

With the successful snapshot vote on GIP-91 the GnosisDAO voted to onboard Centrifuge to enable the Treasury to diversify into real-word assets (RWAs). While the legal conduit is initially intended to facilitate an investment by GnosisDAO into RWA offered through Centrifuge Prime, the same structure can also be used for the benefit of GnosisDAO: (a) to diversify GnosisDAO´s treasury into RWAs available through other projects; and (b) to act as the legal counterparty (where one is required) and hold assets/investments in other projects that further the Gnosis Chain ecosystem.

This proposal aims to allow the DAO to use the Foundation as a legal conduit (to the extent it is required) to hold illiquid investments undertaken by the Builders until they become liquid for the benefit of the DAO.

This serves a number of purposes:

(i) Asset / investment protection: by re-housing the investments to the Foundation, it provides a layer of protection against any potential uncertainties associated with the dissolution of the Builders. This approach therefore aims to preserve the value of those investments for the benefit of the DAO until there is a liquidity event.

(ii) Continued oversight and management - the Foundation (based on the DAO’s direction) will assume responsibility for actively overseeing and managing the illiquid investments with a view to maximizing the potential returns for the DAO. It means the DAO would no longer have to place ongoing reliance on the dissolved Builders team to do this on the DAO’s behalf.

(iii) Transparency - the Foundation is established with defined parameters on acting in the DAO’s interests and on the DAO’s instructions. The relevant stakeholders commit to providing a detailed update on the progress of this GIP to the GnosisDAO within 6 months. This approach therefore fosters trust and confidence among the community with respect to any underlying investments and resource allocation;

(iv) Alignment of interests: by entrusting the assets to a Foundation that is solely dedicated to serving the DAO’s interests, we create better alignment with the community’s objectives and values.

Specification

Centrifuge posted the legal documents to the community for feedback regarding GIP-91 Update so they can be voted on, provide an overview of the Foundation structure, and share next steps: Update to GIP-91 (GIP-94).

Once established, this proposal aims to allow the Foundation to also hold other illiquid investments, including those that will be transferred over with the Gnosis Builders dissolution.

Next Steps in order:

  1. Leave posted legal docs on the Gnosis Forum here: Update to GIP-91 (GIP-94) for a few days as a period for feedback
  2. Open a snapshot vote
  3. Setting up the foundation takes ~10 days
  4. Start transferring investments from the Gnosis Builders to the Foundation
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