Karpatkey: 2024 H1 in Review for Gnosis

Treasury
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karpatkey: 2024 H1 in Review for Gnosis

Introduction

This report summarises karpatkey’s key activities and achievements in the first half of 2024. As last year, our primary goal and focus is enhancing the Gnosis Chain DeFi ecosystem and supporting Gnosis-related products.

Summary

  • Financial results: the treasury has grown from $405M to $838M
  • Since the end of 2023, Gnosis Chain TVL has grown from $223M to 280M
  • Monthly volumes increased 68% from Q4 to H1, from $76M to $128M

Treasury Operations

The Gnosis DAO treasury has grown from $405M to $838M*, with the most important actions being:

  • Reception of 150M $SAFE, which accounts for $202M
  • Reception of 8.5M $OLAS from GIP 38 investments, which account for $11M
  • Reception of 6,120 $ETH, as a return of the assets from Gnosis Builders, due to the termination of GIP 38 which accounts for $19M at current prices
  • Reception of 71,841 $GNO, as a return of the assets from Gnosis Builders, due to the termination of GIP 38 which accounts for $18M at current prices
  • Investment of $1M in HOPR in the context of Gnosis VPN GIP
  • Performed buybacks with ETH holdings for the USD value at the time of performing of $7.2M
  • Sold ETH at several points, totalling a 5,235 ETH sold for 19.33M in Stablecoins, with an average price of $3,692.87
  • Diversified the Gnosis DAO LST portfolio, making deposits in Chorus One, Diva, Origin, Rocketpool, and Stader from 1000 ETH to 9000 ETH equivalent assets

*The prices used for the report are those of June 30th, which are the ones snapshotted on our report.

If we only consider the ETH and stablecoin holdings and exclude the reception of the 6k ETH from Gnosis Builders, buybacks, and the HOPR investment, the DAO’s “hard money holdings” grew from $203M to $291M, representing a 43.3% growth. During the same period, ETH appreciated by 38.1%, indicating a 5.2% outperformance in relative terms in 6 months. Additionally, the DAO’s stablecoin holdings increased from $38M to $49M.

Some other notable treasury operations include:

  • Increased day to day issues by maintaining zodiac modules for easier management.
  • Continuous strategy reducing GNO direct incentives by leveraging vlCVX, veBAL and vlAURA voting power.
  • Optimised Bridge liquidity dependencies in Hop and Connext to reduce user friction
  • Led the onboarding of deBridge, which has a cost of $11k a month and is sponsored by karpatkey
  • Supported Gnosis Chain lending markets by depositing up to $72M in Aave and Spark
  • Collaborated with the different teams to coordinate the execution of the various Gnosis Improvement Proposals that required funding.
  • Set up a Cow AMM for OLAS/GNO (Safe{Wallet} – Dashboard)
  • Conducted buybacks using OLAS for GNO
  • Ensured sufficient liquidity for Monerium pairs

Ecosystem Development

Led and supported the deployments of several new actors and integrations on Gnosis Chain:

  • deBridge
  • Fireblocks
  • Fjord Foundry
  • Arrakis Finance
  • Gyroscope
  • Hidden Hand
  • Chronicle

Removed friction towards users leading the following initiatives:

  • Bridge liquidity optimisation and onboarding with Connext, HOP and deBridge
  • USDC new token migration, ensuring both sufficient liquidity across DEXes, Lending Markets, Bridges and general chain supply availability and a general good UX for the end user
  • Launch of CoWSwap Solvers incentives program, which resulted in a rise from 10% to 80% of batches assigned to 3rd party solvers, onboarding 4 of them and significantly improving the quality of trades in CowSwap.
  • Optimised liquidity across various DEXes to increase effective capital allocation by utilizing wstETH and sDAI as a routing pair, ensuring that deposits/redemption routes were covered at all times and throughout the highest number of venues as possible

Tech Overview

  • Actively participated in the Gnosis Bridge ecosystem:

    • Operated validators for both the XDAI and AMB Bridges.
    • Implemented keeper bots to optimize the sDAI yield.

  • 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.

  • Developed and deployed strategic tools:

    • Created a GBPe arbitrage bot for managing GBP:USD rate discrepancies.
    • Deployed arbitrage bots on GC to maintain market stability and minimize trade slippage.

  • Hypernative Contributions:

    • Implemented advanced risk monitoring systems, incorporating new price sources and custom agents for enhanced surveillance.

  • 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.

Governance

Led the following initiatives to their approval within the Gnosis DAO framework:

  • GIP 91 - Centrifuge Investment to unlock Real World Assets returns from the Gnosis DAO treasury

    • Acted as off-chain treasury manager, instructing the foundation director in Anemoy Liquid Treasury Fund, ensuring the DAO access to risk-free,
    • TradFi yield without relying on intermediaries nor custodians.

  • GIP 97 - Joint Treasury GnosisDAO / SAFE to coalesce and enhance both

    • Acted as treasury manager of the Safe/Gnosis Joint Treasury, raising funds and ensuring sufficient liquidity for Safe at launch, providing SAFE-ETH liquidity on Mainnet and SAFE-GNO liquidity on Gnosis
    • Ensure the proper distribution of SAFE for GNO holders, as stated by GIP-64

  • GIP 100 -

    • Executing buybacks as indicated by GIP-100

  • GIP 101 - Delegation Program to increase Gnosis DAO participation of aligned stakeholders

    • Working alongside StableLabs to ensure a more engaged community, by promoting a delegation program

ncAUM calculation reduction

As stated in the initial section of this report, a significant share of the increase in the value of the Treasury is due to the increase in value or balance of assets that are either illiquid or have a limited scope of actions to be taken. Therefore, we have proactively decided to reduce the ncAUM for which the management fee is considered. Specifically, the following assets are excluded from the ncAUM, starting from May 2024:

  1. GNO: 550k will not be part of the ncAUM. However, 350k will continue to be included as they are committed to several initiatives such as governance, allocations to help bootstrap LST providers, providing liquidity in several venues, collateral positions, and potentially incentives. This amounts to $156M.
  2. SAFE: 130M will not be part of the ncAUM. This amounts to $187M.
  3. Locked OLAS: This will not be part of the ncAUM. This amounts to $9.4M.

Therefore, the considered ncAUM drops from $838M to $486M.

These values are subject to change, should the utilization of these assets change. For example, if GNO were used as collateral within borrowing positions in DeFi, then they would be considered within the ncAUM.

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