How do we fix the GNO distribution problem?

This question has been online for a while.

Any chance someone could summarize where we are? What’s next? Is there something concrete to vote on yet?

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I don’t think there’s something specific to vote on yet. One sentiment that was mentioned here that I agree with:

However, I do think it would be interesting to continue this discussion and collect different ideas.
Trying to summarize the suggestions that were mentioned here so far:

  1. Increase liquidity on AMMs. --> already happened, there’s now significant GNO liquidity in AMMs
  2. Incentivize usage of Gnosis apps such as Safe or Gnosis Protocol.
  3. Sell GNO at a discount to market (auction). --> counter argument: if we offer open auctions at discounted prices, we would create arbitrage opportunities to the on-chain GNO AMMs. One way to circumvent this could be to auctioning off locked GNO or conditional GNO.
  4. Set aside a “community participation fund” that is proposed every quarter (for reference:
  5. Merkle drop to all wallets that have used the Gnosis Products (Gnosis Conditional Token Framework, Gnosis Protocol and Gnosis Safes)
  6. Scheduled reward program for contributors to the Gnosis ecosystem. A set percentage given yearly to contributors over x years.
  7. Distributing governance tokens (GNO) to people who made correct forecasts about the effect/consequence of proposals
  8. Airdrop to Gitcoin donors
  9. More of a holistic approach combining some of the previous suggestions: Make a strategic decision to continuously distribute GNO tokens from the reserve to ecosystem participants every 1-2 years with some limitations. For example, distribute up to 10% of liquid tokens every year to ecosystem participants that would include grants, merkledrops for active users, etc.
  10. Also have a look at the current proposal to reward liquidity mining on Sushiswap, GIP-4: GIP-4: Should GnosisDAO pay additional GNO rewards for GNO<>ETH LP on Sushiswap?

Raised open questions:

  • How to avoid that newly distributed GNO is only going to existing GNO whales (proposal to leverage quadratic mining)
  • How to distribute without diluting existing holders
  • How do we identify valuable community members
  • What percentage of GNO should be distributed to community over what time period

Just a quick thought, I think having GNO as an asset on a borrow/lending platform such as Compound, Aave or Cream would help. It would increase utilization of GNO and could potentially increase volume in the market as people speculate on the interest rates. This will not lead to farmers taking advantage or any incentives provided directly to AMM and can allow for more liquidity as GNO can be distributed via people borrowing (at least short term).

I think another concern is potential additional exchange listings, currently the most liquid exchange is Kraken which doesn’t have as much users as other exchanges. While DEX have more volume, high gas cost is a barrier for most users so only larger whales will be interested which doesn’t help with the distribution problem.

I think these two steps will alleviate some of the distribution problem without having to worry about dilution or giving away GNO for free but also increasing GNO’s utilization (lend out GNO and borrow other assets) and accessibility.