Gnosis Factor Disbursements: OLAS, HOPR

General Gnosis Chain
1

Overview

Gnosis DAO received disbursements from factor in regards to its investments in OLAS and HOPR. We wanted to take the opportunity to share karpatkey’s strategic action plan with the tokens. The plan involves establishing CoW FM-AMM liquidity pools (LPs) with these tokens to foster a long-term partnership with the respective projects. Additionally, we aim to reinforce our commitment by relocking a significant portion of the DAO’s OLAS tokens. In parallel, we will leverage another portion of the funds to execute strategic buybacks of GNO, strengthening our ecosystem.

Details

Gnosis DAO recently received 8.5M OLAS and 10M HOPR from its investments into the respective projects through the factor fund (GIP-38). With the release of CoW’s FM-AMMs we propose to initiate seeding LPs on Gnosis to build liquidity in CoW AMM. This aims to build a long-term alignment with the projects invested in, build liquidity on Gnosis, and support CoW’s new FM-AMM.

CoW FM-AMM

CoW Function-Maximising AMM (FM-AMM) is a new AMM which batches trades together and executes them all together at the same price - eliminating first come, first serve arbitrage and LVR.

We suggest launching the following pools on CoW AMM:

  • GNO-COW
  • GNO-HOPR
  • GNO-OLAS

GnosisDAO will seed the GNO-COW and GNO-HOPR pools directly, while it will set up a programmatic CoW order for OLAS over 6 months with 1.5M OLAS.

Programmatic orders allow us, i.e., given a total of 100 tokens x and a desired FM-AMM LP pool of x-y, to sell 50% of token x over a time period of t and end up with a 50/50 x-y after t. By leveraging CoW Swap’s TWAPs and using long timeframes, the sell pressure on the market is significantly curtailed. Tokens are always sold at market price and immediately added to the LP after each TWAP part, thus liquidity in the FM-AMM is gradually built up over time. Programmatic orders also allow setting a global limit price, at which orders would stop until the exchange rate in range of the set global limit price again.

OLAS

We will further lock 6M OLAS for 6 months to show Gnosis’ long-term commitment to OLAS. OLAS has been a strong user of Gnosis with their AI agent network and incentivizing LPs to lock liquidity on Balancer on Gnosis. Gnosis is a strong believer in AI agents and the Autonolas project and we have many things planned to further the agent economy on Gnosis.

We will retain 1M OLAS liquid in the treasury (6M locked, 1.5M CoW AMM), part of which may be used to market buy GNO. This will be done at the discretion of karpatkey and in a long-term timeframe, minimising market impact on OLAS.

Thereby, we would be relocking 70% of our OLAS tokens to show Gnosis DAO’s support for OLAS, while using the majority of the unlocked tokens to build up OLAS-GNO liquidity on Gnosis and using a portion of the unlocked funds to buyback GNO directly on the market.

8 Likes
2

Just making sure I understand correctly: the liquidity on CoW-AMM will be single sided? i.e. you supply 100% OLAS into the GNO-OLAS pool and, using the programmatic orders, you intend to sell 50% of that OLAS for GNO over some defined timeframe?

Thanks in advance for your feedback. Still getting familiar with CoW-AMM and appreciate any insights to how it works from LP perspective with the programmatic orders, which seem to be very powerful.

For anyone who hasn’t heard about CoW-AMM yet, highly recommend reading the paper on how the function-maximizing AMM mechanism was designed: Arbitrageurs’ profits, LVR, and sandwich attacks: batch trading as an AMM design response

1 Like
3

Hey, the liquidity on the CoW-AMM is not single sided as the programatic order over time sells small amounts of OLAS into GNO and only then LPs these into the CoW-AMM. Thereby, gradually building up liquidity over time.

Programmatic orders are separate from CoW-AMM - in fact they’re used to place TWAPs through the CoW UI. Ultimately, we’re almost doing the same here essentially setting a very long TWAP with the difference that instead of returning the funds to the trader wallet, as in a regular trade, the resulting GNO from a trade is paired with corresponding amount of OLAS, in USD terms, and directly added to a CoW-AMM GNO-OLAS LP.

If you’re interested in the combination of programatic orders and LPing in CoW-AMM I recommend checking out: CIP-37: Increasing liquidity for COW token via a programmatic order and an FM-AMM - Governance - CoW DAO

2 Likes
4

Thanks for the quick & helpful response! This has clarified it for me and also will continue reading on CowSwap forum :slight_smile:

I was confused with programmatic orders because there was some discussion about it in the cow-amm channel on Discord. Makes much more sense now after reading your explanation.

2 Likes
5

Hey guys! I am one of the developers of the CoW AMM Deployer Safe App. Just want to share here our app if you guys want to use it for the creation of these CoW AMMs.

Also, I am curious about the 50/50 selection for the pools that you made. I know that this is a requirement on the current CoW-AMM implementation, but do you guys think that a different proportion of tokens (e.g. 80/20) would work better or not for your use case?

1 Like
6

thx, will read up on this for sure and try out once I feel familiar with it. Regarding the pool composition: in general I prefer 50/50, seems to give me better rewards as a lp compared to other proportions. That’s at least my guess, I haven’t done all the math and it is ofc also dependent on volume and fees.

2 Likes