Should GnosisDAO Partner with Giveth to Increased Sustainable Liquidity?
Summary
Mutually beneficial token swap to create a 1M USD equivalent shared liquidity pool of $500k GIV <> $500k GNO on Honeyswap (Gnosis Chain).
Abstract/Description
This proposal aims to further GnosisDAO’s strategic partnerships and increase liquidity of GNO on Gnosis Chain (GC).
Giveth was a founding member of Gnosis Chain. They held the Scaling Now Summit in 2018 and partnered with POA, MakerDAO and Protofire to launch Gnosis Chain (then xDai Network) Many awesome projects that chose to live on Gnosis Chain spun out of the Giveth ecosystem, including BrightID, DAppNode, and TEC
Giveth is a Gnosis-native protocol that recently launched an economy (GIVeconomy) and introduced the GIV token. Their liquidity on GC is over $4M (at current GIV price of $0.284) in just 4 short months of life (launch 24 DEC 2021):
It may be of note that just under $2.5M is single-stake on GC, accounting for a total of $4M in total “circulating” supply on GC. Source: Dune Analytics dashboard.
As the GIVeconomy grows, APR will decrease for single asset staking and push liquidity to pools, further increasing the liquid GIV on GC (likely well past the estimated $30M). Establishing a shared GNO<>GIV pool now will foster long term economic alignment and development between the two DAOs.
Motivation/Rationale
Increasing the liquidity of GNO pairs on GC will increase the token’s composability and useability. In addition, a shared pool creates synergy between GnosisDAO and Giveth, strengthening both tokens in terms of potential price increase and reduced volatility.
Partnership with Giveth in particular is attractive due to their growth potential (outlined above), shared vision of creating a better world through crypto, and strong ties to the Gnosis community. Joint ventures will open the door for future projects that will create additional mutually beneficial opportunities.
If this proposal is passed, both communities will be rationally incentivized to act in the other community’s interest, because they both own a stake in the other. Each community has also hedged their own risk, by transferring some of that risk to the counter party community. This essentially marries our communities together.
Specification
- GnosisDAO will send $550k worth of GNO to the Karpatkey Gnosis Safe on Gnosis Chain.
- Giveth will send $550k worth of GIV to the Karpatkey Gnosis Safe on Gnosis Chain.
- Karpatkey will deposit a total of $1M worth of liquidity into a GNO:GIV pool on Honeyswap (1Hive) on Gnosis Chain.
- Karpatkey will send half of the resulting LP tokens to the Gnosis DAO treasury and half of the LP tokens to the Giveth treasury.
Karpatkey will return the remaining GNO tokens to the GnosisDAO’s treasury and the remaining GIV tokens to the Giveth treasury.
Note: Each DAO initially provides slightly more than the required $500k in an attempt to account for price changes between proposal creation, acceptance, and execution. If the value of the GNO or GIV transferred falls below $500k prior to the pool being created, then a pool should be created using the full balance of that token and an equivalent USD value of the other token.
Future Considerations
GnosisDAO is pushing to get Uniswap v3 on GC. Once this is accomplished, a proposal shall be created to move this liquidity from Honeyswap to Uni v3.
EDIT: Updated Future Considerations to reflect initial deployment on Honeyswap.