Introduction
This report summarizes katpatkey’s activities and achievements in 2023. Our primary goal shifted from maximizing returns to enhancing the Gnosis Chain DeFi ecosystem. We focused on transferring our treasury to Gnosis Chain and building a thriving ecosystem.
Executive Summary and Highlights
- Increase in Total Value Locked (TVL) from $56M to $229M, according to DefiLlama
- Daily active addresses increased from 2k to 12k (on a 7-day trailing period, as can be seen in this dashboard)
- Launch of Aave, Balancer, Spark, Aura, among other projects
- Transferred 55% of our treasury to Gnosis Chain, achieving a 40% of capital utilization in Gnosis (excluding wstETH)
- Financial Results: Earned $10.2M with an average annual return rate of 5.0% and an average capital utilization of 70%.
Treasury Operations Overview
- Moved most of our Treasury to Gnosis Chain, achieving a 70-30 split between Gnosis and Mainnet, enhancing our position in the DeFi market.
- Increased operational efficiency by integrating saveral modules with the Zodiac app, paving the way for non-custodial asset management and more dynamic strategy adjustments.
- Published weekly reports and developed new monthly report with clearer, more relevant information, increasing its precision, enabling a new system for tracking holdings and performance, standardizing our transaction categories and updated our tracking system accordingly.
- Developed Python package (Defyes - based on web3.py) to improve the interaction with different smart contracts and get fast and accurate on-chain data (balances, prices, rates). Created a Github repository to address this and be able to share it with the broader community.
- Adjusted incentives, voting power, and bribing strategies to support Gnosis Chain and align financial interests, reducing GNO emissions by optimising veBAL and vlAURA voting power and by using farming rewards as incentives in other protocols, such as Curve or Hop.
- Redefined xDAI and Omnibridge limits, maintained Hop bonder, and Connext router, improving the accessibility of Gnosis Chain from L2s and other L1s.
- Optimised GNO liquidity to reduce its price variation.
- Carried out a GNO buyback program, utiliziting ~50% of farming rewards ($10.2M). Program budget was 2,351 wstETH (worth USD 5M at the time of purchases) and it resulted in the acquirment of 36.1k GNO, at an average cost of Ξ0.0746.
- Additionally, 98.2k GNO were bought OTC, with 9.3M USDC and 270 WETH.
- Diversified the Treasury by selling ETH for stablecoins to ensure runway, shifting the composition from a debt standing point to having 10% of the total holdings in stablecoins.
- Took on loan positions on Spark, Maker and Aave and implemented strategies to support stablecoin liquidity in Gnosis Chain, by providing liquidity in Balancer and Curve and by voting and incentivising these pools.
- Supported Gnosis Chain lending markets by depositing funds in different protocols.
- Contributed to Ethereum’s decentralization by providing liquidity on the Diva Early Staking vault.
- Created deep liquidity for EURe, making sure that it’s performance against the peg is as good as possible. We assesed different pool types, such as Curve v2 or Balancer CSP with a rate provider, and worked with partners to optimise parameters of the pool.
- Acquired tokenized real-world assets.
- Enabled a successful launch and v2 deployment for Azuro thanks to the initial liquidity and collaboration provided by the GnosisDAO treasury through karpatkey. Azuro has shown strong performance in specific metrics, such as active accounts, contributing to the growth of the Gnosis Chain.
- Facilitated the activation of 10K validators by executing a set of GNO deposit transactions with a staking provider partner.
- Collaborated with the different teams to coordinate the execution of the different Gnosis Improvement Proposals that necessitated funding.
- Executed OTC deals with key partners involving veBAL and GNO trades.
Business Development Overview
- Led the deployment of several key projects on Gnosis Chain:
- Balancer
- Aura
- Spark
- Aave
- Beefy
- wstETH oracle
- agEUR and stEUR
- Initiated the development of sDAI, which sparked the largest growth that GC has experienced, by opening the discussion in the forums through the Should the DAI sitting in the xDAI Bridge be deposited into the DSR? post, proposing its design, working with both Gnosis Devs and Bridge teams throughout the development, coordinating its communications, and ensuring it was properly integrated into the DeFi ecosystem.
- Built and optimised markets in Gnosis, pairing volatile assets with wstETH, stablecoins with sDAI, creating deep liquidity for wstETH-sDAI and making sure that solvers route efficiently, including sDAI wrapping/unwrapping for maximising capital efficiency.
- Onboarded a new solver (Enso) on CowSwap for optimised Gnosis Chain trading.
- Partnered with Diva by supporting the project and assessing the feasibility of developing a staking solution with DVT for Gnosis.
Tech Overview
- Collaborated intensively with the Gnosis Guild team on the Roles mod and the Manager extension, implementing these across both Gnosis Chain (GC) and Mainnet. This involved:
- Rigorous testing and providing key insights.
- Assisting in developing presets and helper functions for the Roles mod’s SDK.
- Evaluating smart contracts to guide the design of Roles mod V2, focusing on optimal permissions strategies.
- Played a critical role in enhancing Gnosis Chain’s infrastructure and security:
- Managed Gnosis Beacon Chain (GBC) nodes, validators, and an Erigon node.
- Maintained the Hop Bonder and a Connext Router to strengthen GC’s connectivity and broaden its inflow channels.
- Actively participated in the Gnosis Bridge ecosystem:
- Operated validators for both the XDAI and AMB Bridges.
- Implemented keeper bots to optimize the sDAI yield.
- Developed and deployed strategic tools:
- Created an EURe arbitrage bot for managing EUR:USD rate discrepancies.
- Deployed arbitrage bots on GC to maintain market stability and minimize trade slippage.
- Ensured protocol reliability and user experience within the Gnosis ecosystem by:
- Regularly identifying and reporting bugs.
- Providing detailed feedback and conducting comprehensive tests.
- Collaborating with key partners like DeBank, Safe, Gnosis Guild, Balancer, Curve, Coingecko, DefiLlama, Connext, Hop, CoW Swap, Agave, Azuro, and Aura for continuous improvement.
Risk Management Overview
- Enhanced Risk Management and Security Strategies:
- Developed a comprehensive risks database, refined alert mechanisms, and redesigned emergency plans to align with dynamic market conditions and current positions.
- Updated and improved the Risk Map, identifying and integrating new risk parameters for all positions, both existing and planned.
- Collaborated with risk management providers to fortify the security and resilience of the GnosisDAO.
- RiskDAO Contributions:
- Enhanced Agave’s risk management framework, optimizing risk parameters and strategies.
- Imposed limitations on global token supply and borrow amounts to mitigate the risk of destabilizing loans.
- Created a model incorporating new caps, focusing on optimizing Loan-to-Value (LTV) and liquidation thresholds.
- Recommended the deactivation of specific tokens (FOX and LINK) on Gnosis Chain to avoid potential risks associated with low liquidity and market cap.
- Provided expert guidance on EURe’s price deviations and crafted custom liquidity solutions for wstETH.
- Conducted rigorous stress tests and established a real-time alert system to monitor market dynamics and user positions.
- Regularly published insightful reports in the Agave forum and tackled technical challenges on Gnosis Chain.
- Hypernative Contributions:
- Played a key role in developing and refining monitoring systems and alerts for Gnosis Chain and Beacon Chain.
- Implemented advanced risk monitoring systems, incorporating new price sources like Chainlink and custom agents for enhanced surveillance.
- Significantly reduced false positive alerts and improved the alert mechanism for high-severity threats, integrating Telegram for critical alerts.
- Elevated security detections and monitoring capabilities for Uniswap v3 and other critical infrastructure.
- Redefine Contributions:
- Provided valuable feedback to improve product features and integration with Safe.
- Guided the Safe team on product utilization and briefed them on Redefine’s advantages.
- Expanded scope to enhance risk management for GnosisDAO Treasury operations.
- Crisis Management:
- Led war-room sessions for swift and effective response planning to address high-impact events like the USDC depeg, Curve exploit, and Balancer vulnerability in boosted pools.
Next Steps and main challenges
- Enable the development of Gnosis Pay and support it to achieve its potential
- Position Gnosis Chain as a payments network
- Develop a liquid staking solution for GNO, exploring various options.
- Expand our real-world asset offerings, integrating new collateral types on lending platforms.
- Improve Gnosis Chain connectivity, by creating deeper liquidity in existing bridges and/or integrating new bridges.
Conclusion
In 2023, katpatkey played a key role in advancing strategic innovation, financial performance, and operational efficiency for GnosisDAO. Our collaborations and proactive risk management have strengthened the Gnosis Chain and its role in the DeFi ecosystem. With several successful initiatives and exciting future projects, we’re dedicated to promoting growth, enhancing GNO’s value, and supporting a strong and dynamic Gnosis ecosystem.
Very well done to all the team.