GIP-99: Should Gnosis Guild steward GnosisDAO Governance?

[auryn_macmillan]

GIP-99: Should Gnosis Guild steward GnosisDAO Governance?

• In Favour
• Against

GIP: 99
title: Should Gnosis Guild steward GnosisDAO Governance
author: Alex (alex@gnosisguild.org), Pandy (pandy@gnosisguild.org), and Auryn (auryn@gnosisguild.org)
status: Draft
type: Funding
created: 2024-04-08

Category

Service Agreements

Executive Summary

Gnosis Guild proposes to steward GnosisDAO governance, guiding a new phase of innovation, experimentation, and growth. As GnosisDAO continues allocating resources to Gnosis Chain, Gnosis Pay, and other mission-aligned ventures, our team will drive the DAO’s governance strategy and operations through dedicated R&D, technical implementation, and ongoing stewardship.

While Gnosis Guild has been actively contributing to the maintenance and improvement of GnosisDAO governance since its inception, this proposal will formalize a long-term partnership that prioritizes the following objectives:

• Improve, maintain, and secure GnosisDAO governance infrastructure.
• Foster the growth and further decentralization of the Gnosis Ecosystem.
• Position GnosisDAO as leading innovators of DAO governance.

Through these guiding stars, Gnosis Guild will also address the challenges currently faced by GnosisDAO’s governance. Initiatives includes: (1) designing a new governance architecture and roadmap to tackle the operational inefficiency of its monolithic governance patterns, (2) introducing novel funding mechanisms to address its inefficient capital allocation and lackluster ecosystem development, and (3) progressively decentralizing DAO processes to increase governance activity, transparency, and participation.

Our annual funding request is 0.3% of AUM, 50% in USDC and 50% in GNO (at the 200-day moving average at the time of allocation and locked for one year), paid monthly to Gnosis Guild coinciding with karpatkey’s monthly treasury report.

About Gnosis Guild: Gnosis Guild is a web3-native venture studio with the values of conviviality, co-ownership, and experimentation at its heart. For over three years, our team’s modular tooling and needs-driven development have secured and operationalized the GnosisDAO’s governance and treasury asset management. These include: Zodiac Reality Module for decentralized Snapshot governance; Zodiac Roles and bespoke tooling for karpatkey’s non-custodial asset management; custom strategies for delegation; token locking and distribution systems for CoW and Safe; and support and development for other GnosisDAO initiatives like Hashi and Gnosis Pay.

Service Description

Gnosis Guild will guide GnosisDAO’s governance through strategic R&D, technical implementation, and ongoing stewardship. In response to community feedback and motivated by our commitment to needs-driven development for the GnosisDAO, we have outlined objectives that will inform our overarching governance strategy and initiatives that address key areas for improvement.

Objectives:

1. Improve, maintain, and secure GnosisDAO governance infrastructure.
   Indicator: Increased utility and adoption of GNO as a governance token through enhanced voting participation and token utilization.

2. Foster the growth and further decentralization of the Gnosis Ecosystem.
   Indicator: A thriving ecosystem with multiple transparent funding mechanisms and active engagement from top-tier external contributors.

3. Position GnosisDAO as leading innovators of DAO governance.
   Indicator: Novel governance infrastructure and ongoing initiatives to integrate emerging tech.

Key Performance Indicators:

1. Improvement in annual total vote weight utilized
2. Improvement in annual total voter turnout
3. Increased allocation of annual total resources per approved proposals

We will use the consistent evaluation of these variables on an ongoing basis to measure our impact on our outlined objectives. By measuring vote weight utilization, voter turnout, and resource allocation, we can explicitly measure governance engagement and implicitly measure proposal quality. While resource allocation is inconsistently documented across proposals to date, we estimate that an increase in the ratio of total proposed funds to allocated funds would correlate with an increase in proposal approvals and quality. We will evaluate each proposal individually, but due to the historically significant variation in engagement between proposals, our KPIs will be measured on a yearly time period to reflect macro trends. For example: from 2022 to 2023, there was a 73% decrease in proposals generated, a 66% decrease in total voters, and a 79% decrease in total vote weight utilized. While the causes of changes in governance engagement are speculative, our intuition is that market dynamics, major events (xDai merger), and governance stewardship were contributing factors.

Initiatives:

A new architecture and roadmap for governance

• Problem: GnosisDAO’s monolithic governance pattern limits operational efficiency and innovative potential.
• Solution: Develop a new architecture and roadmap to enhance agility and innovation, focused on multiple types of roles, organizational units, and parallel governance processes.

Novel funding mechanisms to foster the Gnosis Ecosystem

• Problem: Opaque ecosystem funding mechanisms hinder capital allocation and ecosystem development.
• Solution: Implement novel funding mechanisms to scale and grow the Gnosis Ecosystem, fostering transparency and capital efficiency.

Progressive decentralization of DAO processes

• Problem: Low governance participation reflects a perceived lack of value in committing resources.
• Solution: Facilitate progressive decentralization of DAO processes for greater resilience and trustlessness, creating a more automated, efficient, and permissionless functioning for the DAO.

1. Key aspects

A new architecture and roadmap for governance

The current governance process only allows one path for DAO action, namely GIPs. This monolithic structure can be very time consuming and involve significant risk on both the contributor and DAO sides, along with implying high voter bandwidth. Creating multiple types of roles, organizational units, and parallel governance processes within the DAO will serve to decentralize decision-making, reduce bottlenecks, improve bandwidth, and diversify the DAO’s ability to adapt and respond. Safe Guardians, OP Badge Holders, and ENS working groups are a few examples. By effectively delegating clearly scoped responsibilities to autonomous groups, GnosisDAO can improve its organizational efficiency while reducing the governance overhead of its top layer governance. We will develop an evolving architecture, with ongoing innovation and experimentation, to remain agile to dynamic needs.

Novel funding mechanisms to foster the Gnosis Ecosystem

To scale and grow the Gnosis Ecosystem, we will design and implement novel funding mechanisms for maximum capital efficiency. Multiple paths to ecosystem funding would enable more autonomous contributions, with clear directives and expectations. Optimism and Arbitrum have set an excellent example here, and their ecosystem growth is a clear reflection. Frameworks like RetroPGF, ARB’s STIP + multiple grants programs, and Safe’s OBRA are all promising directions. Based on their successes and pitfalls, we will develop our own mechanism suited to the Gnosis Ecosystem.

Progressive decentralization of DAO processes

By developing modular, composable DAO governance processes, we will increase decentralization and transparency. In reducing any single point of failure, the DAO will have greater resilience and trustlessness. With the development of new onchain mechanisms, we will create a more automated, efficient, and permissionless functioning for the DAO.

2. Service Scope

This proposal is solely for our work stewarding governance of GnosisDAO. Any additional work, such as our contributions to Gnosis Pay, Hashi, and DAO treasury management, would be out of scope.

3. Service delivery

Immediate Improvements

• Modernize the GnosisDAO’s Snapshot strategy to correctly account for a greater diversity of GNO holders.
• Enable key delegation features for the DAO: split delegation, transitive delegation, and delegation term limits.
• Implement spam proposal filtration

Research, Architecture, Design

• Extensive research of successful DAO governance architectures
• Continuous gathering of GNO stakeholder feedback
• Iterative design of novel mechanisms for the DAO’s operations
• Experimentation with parallel, tightly-scoped governance mechanisms
• Development of a collaborative roadmap for the DAO’s evolution

Technical Implementation

• Full-stack and smart contract development of governance tooling
• Implement novel governance technologies

Continuous Stewardship and Operations

• Management of DAO governance processes
• Coordination of calls, feedback, and calendar
• Active engagement in forum to foster transparent, efficient dialogue
• Rapid response to emergent issues and risks

4. Support

Gnosis Guild will provide community technical support and ensure we have a rapid response process to any high-risk issues related to GnosisDAO governance.

Pricing and payment

Gnosis Guild requests an annual compensation of 0.3% AUM, paid pro rata on a monthly cadence, coinciding with, and calculated according to, the AUM reported in karpatkey’s treasury report for the month. The compensation should be 50% USDC and 50% GNO, with the GNO subject to 1 year locking from the time it is distributed.

Payment Frequency	USDC Allocation	GNO Allocation
Monthly	(AUM * 0.003 * 0.5) / 12	(AUM * 0.003 * 0.5) / 12

(using the 200-day moving average price for GNO at the date of allocation)|

Gnosis Guild initially anticipates 3-6 individuals working on the identified scope at any given time, with the possibility to scale alongside treasury growth. The total cost to GnosisDAO will remain competitive with other top protocol DAOs.

Service Terms and Exit Strategy

If applicable the duration of the service agreement. Please outline the terms and conditions for exiting the service agreement, including the circumstances under which a party may terminate the agreement, and any other important details.

The agreement between service provider Gnosis Guild and organization GnosisDAO will take effect immediately upon this proposal passing. The terms within the agreement will be valid in perpetuity, unless terminated by either party or updated with mutual consent by both parties. GnosisDAO will assign specific permissions to Gnosis Guild within their treasury utilizing the Roles Modifier to enable Gnosis Guild to autonomously collect payment. Either party may terminate the agreement at any time without cause by giving 90 days of written notice to the other party. Upon termination, all outstanding payments shall be made by GnosisDAO to Gnosis Guild prior to agreement on termination date.

Team/ Organization

Gnosis Guild will act as an Autonomous Core Contributor for GnosisDAO. Through mutualistic partnerships and activist R&D, our team of engineers, designers, and researchers will foster the long-term development and sustainable growth of GnosisDAO’s network. See our contributor list here.

Conclusion

Here you can summarize your project or include anything that wasn’t mentioned yet and is important to understand the GIP.

[armog]

I believe that GnosisDAO needs a new and updated DAO working framework. Additionally, utilizing novel funding mechanisms to increase community contribution while distributing GNO to different communities/groups and holders will enhance the DAO’s diversity and facilitate governance participation. What I’m curious about is the modeling of the payment section with examples, in an ELI5 manner. Considering GNO’s high performance, I wonder about the monthly and annual fees for this service.

[espina]

@armog thanks for your positive feedback. I can speak to more specifics on the payment section.

First, we structured this more as a budgetary question rather than determining a specific workload. Our approach is: how much of the DAO treasury should be allocated to the continuous improvement and expansion of its infrastructure? From this perspective, a budget that scales with treasury size makes the most sense. A 0.3% annual budget would be on the conservative side of spending, given the central importance of the DAO’s governance and ops.

In practice, for the past 9 months the payment would have looked like this:

Month	Treasury AUM ($USD)	200-day GNO Average ($USD)	Payment Date	Allocation
				USDC	GNO
July 2023	264,864,823	111.79	August 1	33108	296
August 2023	232,957,031	111.21	September 1	29120	262
September 2023	235,127,268	110.31	October 1	29391	266
October 2023	253,102,816	108.27	November 1	31638	292
November 2023	386,254,913	116.16	December 1	48282	416
December 2023	405,196,952	130.89	January 1	50650	387
January 2024	420,866,830	144.91	February 1	52608	363
February 2024	732,336,883	168.38	March 1	91542	544
March 2024	730,243,922	212.47	April 1	91280	430

[refri]

As an outsider still trying to figure out how decisions are made right now and what’s the relations (and possibly personal overlap) between Gnosis DAO, Gnosis Ltd, Karpatkey, Gnosis Builders, Gnosis Guild and maybe other involved parties, imho first step should be to outline a clear structure of what we have right now.
Only after that I might feel able to judge if and how it might be worthwhile to spend DAO funds to optimize these structures which also require the willingness of all involved parties to go this way.
Therefore I hope to see some statements from these here.

edit: voting on this closed already not even 24h after the post? Again a decision I would like to understand.

[espina]

For sure, creating more transparency and public decision-making is definitely needed and something we’re hoping to address with this proposal.

Gnosis Guild is an independent entity with GnosisDAO as the largest stakeholder (20%). Karpatkey, Gnosis Guild, along with Safe and CoW, are all spinouts of GnosisDAO. There is certainly overlap, but each of these entities has its own governance and decision process. @ernst’s Gnosis 3.0 post gives a good overview of the current structure of Gnosis. Our proposal is focused on GnosisDAO, which is governed solely by GNO holders and allocates the Gnosis treasury.

(The voting closure was an error and is now back open)

[mkoeppelmann]

Thanks for this proposal!

I do agree with the need to improve governance and I also think such a proposal of a long term service provider with a pay structure as suggested does make sense.
However - as a step to get there I would prefer to go a route where there are first 1-2 concrete projects with specified goals and budget that should already improve the status quo.

If those are delivered successfully I would be very open to voting for such a long-term “service agreement”.

[thomasrush]

Agreed with @mkoeppelmann 's suggestion to start with 1-2 concrete projects.

To that end, as a first step I’d suggest that the specific problems outlined in this proposal (quoted below) ought to be more concretely defined and measured.

For example, the proposal states that one of the initiatives is to “introduc[e] novel funding mechanisms to address its inefficient capital allocation”

If addressing “inefficient capital allocation” is the goal, then measuring the current capital efficiency is a logical first step in the process, so that a baseline can be established and any improvements from that baseline can be measured as well… which somewhat ironically/recursively will ensure that the funding of this proposal is also an efficient use of capital. Therefore, perhaps the first 1-2 concrete projects that were mentioned could simply be the establishment of baseline metrics for each of the proposed longer-term initiatives.

@auryn_macmillan

Initiatives includes: (1) designing a new governance architecture and roadmap to tackle the operational inefficiency of its monolithic governance patterns, (2) introducing novel funding mechanisms to address its inefficient capital allocation and lackluster ecosystem development, and (3) progressively decentralizing DAO processes to increase governance activity, transparency, and participation.

[john_szczepaniak]

There’s a lot of great replies already so I’ll refrain from echoing them. A proposal of this nature coming from the Gnosis Guild, initially a DAO tooling project incubated by Gnosis, makes a lot of intuitive sense. The team has meaningfully contributed to GnosisDAO governance and @auryn_macmillan is uniquely positioned to implement what’s being proposed.

Gnosis is also uniquely positioned to become a leading innovator of DAO governance given its history and deep associations with other major DAOs in the Ethereum ecosystem. It’s no secret that DAO governance is difficult. Voter apathy is a behavioral feature of all governance frameworks. Coordinating across a distributed team and listening to your community is hard.

Now is the time to double down on DAO governance. The coordination mechanisms being iterated on now in web3 present a stark contrast to the way that proprietary technology is built, often behind closed doors with private interest having the final say. It gets even more existential if we digress into the AI rabbit hole!

My point is that our DAO governance is a major feature and strength of Gnosis. Our DAO governance could be a lot stronger. We don’t have the capacity currently to iterate on novel funding mechanisms or, for example, experiment with delegating votes to an AI agent that you’ve trained to perfectly represent your personal set of politics. If you believe in a future with co-owned, collectively governed technology, then please vote for this proposal.

I can’t think of another team that is more equipped and better suited to steward GnosisDAO governance than the Gnosis Guild team.

[espina]

Thanks @mkoeppelmann, glad we are in agreement around the long-term service provider need and pay structure.

We’re definitely open to completing 1-2 concrete projects to start. That said, Gnosis Guild has been contributing to the DAO’s governance for the past several years in this format. These one-off projects, while successful in their piecemeal implementation, have failed to have the more comprehensive impact we seek here. There is also considerable governance overhead for drafting 1-2 short-term proposals, which can often take months to materialize.

Our preferred approach in this case, would be to absorb that modification into this proposal. We would add an initial “trial-period” with 1-2 concrete projects + budget, which upon successful completion would transition to the current proposed model. This could also include establishing baseline metrics like @thomasrush suggested. How does that sound?

[CryptosNF]

I’m just a GNO holder, but I want to get more and more involved in the Gnosis Chain ecosystem.

Having read this proposal and this discussion,

I think the idea of doing 1 or 2 projects as a trial period to let the community judge and vote on the interest and effectiveness of the Gnosis Guild proposal is a good alternative.

Now I totally agree that we need to modernize the DAO governance system, maximize its efficiency and interest for holders

So I’d like to thank gnosis guild for this proposal, and for being able to encourage discussion and debate!

[SEEDLatam]

Hey everyone!

Thanks Gnosis Guild for bringing governance to the table. We think this is a well-crafted and well-thought-out proposal. The mentioned problems are known, and the solutions proposed are necessary. Therefore, we are in favor of an initiative like this, as it undoubtedly represents a step in the right direction.

Discussion

@auryn_macmillan

3. Service delivery

Immediate Improvements

• Modernize the GnosisDAO’s Snapshot strategy to correctly account for a greater diversity of GNO holders.
• Enable key delegation features for the DAO: split delegation, transitive delegation, and delegation term limits.
• Implement spam proposal filtration

• We think these are excellent items to research and implement. Gnosis Guild’s expertise in DAO infra/tooling is best-in class, particularly evident in the development of the Zodiac module/roles among others, so we believe you are the best ones for the job.

While the proposal outlines governance infrastructure improvements, which is fundamental, it overlooks some of the critical aspects of onboarding and community participation. Proper strategy, onboarding processes and incentives are essential for driving engagement, ensuring better DAO Health and the success of governance initiatives.

Without clear initiatives in these areas (Community onboarding, incentives, transparency, defined scope for participants), there may be challenges in increasing voter turnout, GNO token engagement in governance and basically having real/significant impact.

@refri

Only after that I might feel able to judge if and how it might be worthwhile to spend DAO funds to optimize these structures which also require the willingness of all involved parties to go this way. Therefore I hope to see some statements from these here.

• Agreed. As mentioned, establishing a defined scope for each entity and articulating clear DAO objectives to understand what’s at stake and who decides what, is necessary to craft an efficient roadmap and begin working toward these goals.

@mkoeppelmann

However - as a step to get there I would prefer to go a route where there are first 1-2 concrete projects with specified goals and budget that should already improve the status quo.

If those are delivered successfully I would be very open to voting for such a long-term “service agreement”.

• This makes sense and can be implemented with short-term funding disbursed upon milestone completion (contingent upon proper KPI/metrics improvement) followed by larger scopes responsibilities. These can be separate proposals or part of a bigger and structured proposal that takes into account these nuances.

Having said that, we would like to support this initiative by acting as a working group and core collaborator to Gnosis Guild’s mission in shaping the future of GnosisDAO governance. With our experience in hands-on governance across various ecosystems, we are looking forward to filling that gap, to lending our expertise and contributing to the development of a more resilient, decentralized and mature governance for GnosisDAO.

Conclusion

We strongly believe that this proposal addresses critical issues and offers necessary solutions. Regardless of the outcome of this initial vote, it’s crucial to emphasize that community members and stakeholders are now starting to align towards the long-term success of Gnosis DAO.

Hats off to Gnosis Guild for taking the lead and initiating discussions on this critical matter!

[espina]

We appreciate your support and useful feedback @SEEDLatam!

@SEEDLatam

Having said that, we would like to support this initiative by acting as a working group and core collaborator to Gnosis Guild’s mission in shaping the future of GnosisDAO governance.

I agree that additional support in onboarding and community participation would be beneficial — SEED’s expertise and experience with similar initiatives could certainly fill that role. Collaborating with partners, working groups, and DAO contributors will be critical to the decentralization and growth of the Gnosis ecosystem.