To me, the biggest challenge this DAO faces is determining how to distribute GNO. Having organic and active participation in the DAO means that people need to be incentivized to participate. What does this mean? Well, simply that they hold GNO, want it to appreciate in value and therefore think actively participating in its future is beneficial to that.
Currently some of the most active governance communities on Ethereum are the likes of Yearn, Harvest, Sushi, YAM and Pickle. In most all of these, 90-100% of the token has been distributed to users of the protocol and the team holds little or near 0 of the total supply.
In GNO’s case, we have a major distribution problem. Here is a screenshot of top holders from Nansen
The reality is, there is very little organic holding of GNO which in turn means there is going to be little organic participation in this DAO.
The good is, the DAO now holds 80% of the supply and can find ways to fix this distribution problem. I propose the question, how do we fix this? Some initial ideas:
Become a large Uniswap LP for GNO/ETH. As people get excited about the DAO and where it’s going, they will want wants to acquire GNO. I think we should be fairly agnostic to what we hold between GNO or ETH so potential impermanent loss doesn’t bother me. On top of that, we’d be bringing in nice trading fees for being the go to liquidity provider for GNO.
Incentivized usage of Gnosis apps such as Safe or Gnosis Protocol. One tricky thing here is, if we want to fix distribution, we need to find ways to make sure new GNO supply hitting the market isn’t just going to previous GNO whales. We could consider something like what Bee2 did around quadratic mining of tokens.
Sell a large chunk at a discount to market (auction). This avenue is perhaps a bit extreme but could be a quick and easy way to get more GNO out there.
Set aside a “community participation fund” that is proposed every quarter, much like Pickle.finance did a few days ago. This gives GNO away but to those helping build out the DAO.
In saying all of this, I do think a yearly supply schedule should be formally laid out once it’s determined how distribution will happen. In that same conversation I think the total supply of GNO should be discussed as well. On the table should also be potentially burning some of the supply we have, if there are not legitimate ways to distribute it.
Lastly, at the end of the day we still need people to want to own GNO. This will rise naturally from the success of the DAO but ways other communities have done this is by passing profits directly back to token holders through profit sharing.
Curious to hear everyone’s thoughts!