Kpk Terms of Service - November 2025

Karpatkey · November 11, 2025, 11:53pm

kpk Terms of Service - November 2025

Summary

This proposal renews kpk’s mandate as GnosisDAO’s treasury and liquidity manager under GIP-128. It focuses exclusively on treasury and liquidity management across Mainnet and Gnosis Chain, simplifying operations, clarifying scope, and aligning compensation with measurable outcomes. The new structure represents a 75% reduction in total costs compared to GIP-58, while maintaining institutional-grade coverage, on-chain transparency, and operational continuity.

1. Motivation

Under GIP-58, total service costs reached approximately $6.3 million in 2024 and $2.2 million in 2025 to date, covering a wide scope that included governance, business development, marketing, and external communication.

This revised framework narrows the mandate to treasury and liquidity management only, resulting in a 75% cost reduction and a more transparent, accountable structure without compromising service quality or uptime.

2. Scope of Work

2.1 Treasury Management (Mainnet)

Objective: Maintain and optimize the GnosisDAO Endowment to support long-term financial stability, while simplifying the portfolio and reducing the number of active positions to improve transparency, efficiency, and risk control.

Parameters

Target reserve: three years of GIP-related expenses (~$90M in stablecoins)
Current reserves: ~$58M in stablecoins and ~$191M in ETH
Maintain a diversified asset mix aligned with DAO-defined risk tolerance

Performance Measurement

Benchmarks:
- Stablecoins: sUSDS
- ETH: stETH
Performance fee: 30% of performance above benchmark
Accounting frequency: monthly, quarterly, and annual reviews based on end-of-period valuations

2.2 Liquidity Management (Gnosis Chain)

Objective: Allocate assets, resources, and manpower to drive a sustainable ecosystem for Gnosis Chain aligned with Gnosis strategy.

a. Lending Market Liquidity

Maintain liquidity and active positions in Gnosis Chain lending markets
Optimize borrowing rates for key assets such as EURe and USDC
Turnaround for requests: maximum 48 business hours from acknowledgment
Maintain all alerts, monitoring, and risk reviews as required

b. AMM Liquidity Provision

Maintain liquidity pairs aligned with GnosisDAO’s strategic needs
Focus on swap efficiency and discoverability
End-user yield and experience are out of scope
Maintain liquidity uptime above 95% and price impact below 1% for defined trade sizes
Turnaround for requests: maximum 48 business hours from acknowledgment

Current Operation Snapshot

Route	Target Swap	Price Impact	Liquidity Uptime	Liquidity Allocated	IL
wstETH/sDAI	$100,000	0.7%	98%	$15M	$0.2M
wstETH/GNO	$100,000	0.6%	98%	$22M	$0.5M
GNO/sDAI	$100,000	1.0%	95%	$2M	—
USDC.e/EURe	$1,000,000	0.8%	98%	$2M	$0.1M
BRL/USDC.e	$25,000	0.7%	95%	$0.5M	NA
CHF/EURe	$5,000	0.8%	95%	$0.4M	NA

Performance Measurements

Price impact below 1% for trade sizes of $10k, $25k, $100k, and $1M
Liquidity uptime monitored every 10 minutes
Continuous tracking of liquidity allocation and historical impermanent loss

c. Ecosystem Liquidity Provision

May include liquidity in other Gnosis Chain ecosystem products in future SLA revisions, such as Circles, HOPR, or Gnosis Pay rewards.

3. Gnosis Chain Interoperability

Objective: Ensure efficient liquidity and bridge operations between Mainnet and Gnosis Chain.

Responsibilities

Operate relayers on behalf of GnosisDAO
Manage liquidity for third-party bridging infrastructure
Perform rebalancing as required

Examples

BRLA Bot: balances pools, deposits BRLA to Avenía, redeems stables
WhiteBit Bot: manages Mainnet withdrawals and Gnosis redeposits
Across Relayer: prepares liquidity operations across Base, Arbitrum, and Optimism

Operational expenses related to rebalancing and gas are covered from the Treasury, with kpk committed to minimizing them.

4. Out of Scope

The following activities are explicitly out of scope for kpk under this SLA:

Communication and marketing
Business development related to Gnosis Chain protocols
Governance
Etherscan / Gnosisscan information updates
Gnosis Ecosystem Page updates
Coingecko, CoinMarketCap (CMC), DefiLlama, Arkham, and Nansen data updates
Market Maker (eFrontier) management
Centralized exchanges onboarding for Gnosis Chain
Fiat on/off-ramping for Gnosis Chain

5. Reporting and Performance

Data and Transparency

Monthly reporting via the Syncrone Dashboard
First public release: December 15th, 2025
Additional data provided on Looker Studio and Dune

Quarterly Reviews

Portfolio composition and benchmark comparison
Risk and liquidity reports
Operational updates and pending requests

All reporting data will be made publicly accessible when possible.

6. Transition and Continuity

All active positions, custody arrangements, and reporting pipelines remain operational under the new terms.

The transition to GIP-128 introduces no interruption to existing strategies or liquidity operations.

Team composition, infrastructure, and monitoring tools remain in place, ensuring uninterrupted coverage throughout Q4 2025 and beyond.

7. Fees and Compensation

The proposed structure reflects a lean, institutional-grade operation focused exclusively on treasury management, liquidity deployment, accounting, compliance, and risk oversight.

Total Annual Management Cost: $1.5 million, representing a 75% reduction compared with GIP-58.

This structure maintains full operational continuity while removing all non-core activities such as governance, business development, and marketing.

AUM Context

kpk currently manages approximately $520 million in assets across Mainnet and Gnosis Chain.
The proposed management fee represents roughly 0.29% of total AUM, significantly below traditional asset-management benchmarks and consistent with DAO cost-efficiency expectations.

Cost Basis

Average annual cost under GIP-58: $6.3 million (2024)
Total 2025 expenditure to date: $2.2 million
Proposed annual cost under new agreement: $1.5 million

Result: 75% reduction in total cost while retaining full reliability, risk coverage, and reporting cadence.

Composition

90%: team compensation across Operations, Engineering, Data, Finance, and Legal (12 professionals)
10%: infrastructure, operational security, AWS contracts, legal and compliance retainers, and external risk-management services

Risk Coverage

Risk management services include daily liquidity monitoring, counterparty exposure analysis, and independent review of smart-contract interactions on both Mainnet and Gnosis Chain.

These functions are covered under the 10% allocation to infrastructure, legal, and risk services.

Fee Structure

Management Fee (Nov 2025 – Nov 2026): $1.5 million per year, paid monthly
Management Fee (Nov 2026 – Nov 2027): $1.0 million per year, paid monthly
Performance Fee: 30% of performance above benchmark returns (stETH for ETH, sUSDS for stablecoins) on the Mainnet Endowment, calculated quarterly
Operational Costs: gas, rebalancing, and third-party transaction fees, covered by the GnosisDAO Treasury; kpk will minimize these wherever possible

Rationale

This structure replaces the broader, higher-overhead model of GIP-58 with a clear, efficient framework that links compensation directly to performance and transparency.

It provides continuous 24/7 monitoring of treasury and liquidity, automated accounting and benchmarking, and compliance standards equivalent to institutional asset-management practices.

In addition to benchmark-based returns, kpk will pursue selective private deals that generate additional yield within the DAO’s risk parameters, further enhancing capital efficiency and diversification.

mrtdlgc · November 12, 2025, 12:19am

Not even reading it. Big NO.

aurelius · November 12, 2025, 3:11am

GIP‑128 is five months old and contains no funding provisions for karpatkey. Stretching its scope now is governance overreach. If we can casually bolt on new spending, why not throw in a beach house in the south of France too?

Put this to a proper vote. Retroactive reinterpretation of mandates is not how credible DAOs should operate.

NolanV · November 12, 2025, 7:23am

I see Gnosis /kpk prefers creating new topics over replying to existing ones.

Fine. Let’s go over what has already been said a thousand times.

But before I begin—because an outside observer might think I have a personal grievance against them—I want to make something clear. I was a big supporter of kpk; I thought they were doing work that was crucially needed in our ecosystem by actively managing DAO funds. I even supported their contract with DYDX.

##########
1. Balancer sDAI/EURe pool.

The timeline is important: the pool was created on October 3, 2023, but kpk only detected the problem on February 20, 2025, a year and a half later.

The first questions are:

Why didn’t you notice this loss sooner?

Don’t you have any position monitoring tools?

What measures have you put in place to remedy this situation?

Then, once the problem was detected in February, you waited until March 4, 2025, to post a fix, but no communication was made to warn the public of this vulnerability.
We (DeFi France) rediscovered the problem on April 7, 2025, and the fix was applied a little later that same evening (French time). I then personally followed the matter closely because people close to me and I myself had lost money in this pool. After a few weeks, seeing that neither Gnosis (which I was still in love with at the time), nor kpk (whose competence I was beginning to doubt), nor Balancer had communicated about it, I decided to spend 2 weeks FULL-TIME FOR FREE analyzing and detailing the problem.
I privately shared my report with kpk and Gnosis on May 19, 2025, because I wanted you to be able to resolve the incident before it became public, which was proof that I was originally one of your supporters. But kpk dragged the issue out; every 3 days they assured me they would communicate about it, until June 30, 2025, when I decided to publish my report after weeks of waiting.

The questions:

Why did you wait 2 weeks before starting to fix the vulnerability?

Why didn’t you communicate about this vulnerability, while your community was losing hundreds of thousands of dollars, either before or after the problem was fixed?

Why didn’t you produce a counter-report if you were not satisfied with my figures?

Why did you choose to ignore arbitrages via deposits/withdrawals, as well as weekends in the calculation of losses?

Why haven’t you assumed full responsibility as the manager on GnosisChain?

##########
2. Managing liquidity in the Gnosis ecosystem

Liquidity is still a major issue on GnosisChain. USD<=>EURe swaps on GC have become less attractive than USDC<=>EURC on Base, whereas GnosisChain used to be number one. We also have several tokens that are directly or indirectly promoted on GnosisChain, yet little to no liquidity is available for them. The perfect example of this is the Safe boost incentive campaign, which promoted PoolTogether (an excellent product, by the way!), yet there is 0 liquidity available for POOL.
GNO liquidity is also nonexistent on most perps.
On-ramping is limited to few options.

Why is liquidity still such a problem?

Is this a choice by Gnosis Ltd, by you, or by both?

##########
3. The SafeBoost incentive campaign

Do I really need to spell out what’s wrong with it… The point of an incentive campaign is… to incentivize. Yes, the goal is to attract or retain users. To do that, we offer them rewards so they’ll try our product, and once they fall in love with it, they’ll keep using it.

Why was no dedicated website created?

Why wasn’t the incentive campaign accompanied by a marketing campaign to let the general public know about it?

Why did you choose to reward the top X users, meaning the wealthiest ones, when you knew perfectly well that the budget would make the amounts ridiculous for them?

Why not target, for example, only GnosisPay users, taking advantage of the Sybil resistance that GP provides?

##########

My frustration is matched only by my disappointment in kpk and Gnosis. Gnosis was one of the few projects that seemed to want to do something other than TradFi 2.0, but now I just feel like I’m watching a bunch of politicians, navigating between damage control and a slow but certain draining of the treasury.

Sam_Trust · November 12, 2025, 10:10am

I welcome the acknowledgement that some things are not working and the amended scope of work incl. reduced fees. For the community, I could image it would be great to see alternative offers from other service providers (e.g. Stakehouse, @Avantgarde, TokenLogic) through an RFP process too before making a decision.

0x6f2 · November 12, 2025, 10:36am

Oh no, no, no.

This is the worst response I can imagine.

Comparing a new offer of $1.5m/yr to your previous $6m+ isn’t a show of good value, it’s a show of how disgusting your extraction has been to date, how little you really care about GnosisDAO, and how easy it is for your own interests to take centre stage.

Karpatkey charge based on a $520 million treasury, when 1/3 of that is just uncirculating GNO which could just as well be burned. They then barely keep pace with even the most basic benchmarks of wstETH + sUSDS.

The extraction needs to stop.

I invite the Gnosis team to step in by implementing a routine annual governance vote on this topic where GNO holders can express their views, so as to not create a circus where external holders are so dissatisfied that they are creating their own scathing governance proposals to offboard the treasury manager.

We should be moving all assets to wstETH and sUSDS/sUSDE. Karpatkey cannot and will not outperform them, and they are neutral, low risk yield sources. As we have seen, Karpatkey’s management is clouded by their relationships elsewhere and puts us at greater risk.

Let me be abundantly clear: this is not an issue that will recede without a governance vote for GNO holders to decide whether the relationship continues.

dave · November 12, 2025, 3:02pm

It’s also unclear to me how this relates to GIP-128 which is a funding proposal for Gnosis Ltd, completely unrelated to DAO treasury management.

Will this proposal be submitted for formal voting through Snapshot as a GIP, and if so, what is the anticipated timeline? What fees will you charge in the interim, before you get DAO approval?

jmo · November 12, 2025, 5:07pm

a few points after reading proposal:

Fees: performance fees over benchmark make sense. for management fees, i find it quite puzzling that your benchmark is upon the whole treasury, as opposed to what’s actually possible to be utilized. more than a third of the treasury is idle (‘wallet’ in your report), and another $42M is SAFE being vested. so treasury actually being utilized is $300M, so $1.5M = 0.5% management fees. if there is indeed work required for treasury management that warrants $1.5M of manpower, i think it’s fine. however, it’s also hard to believe there are 12 full-time dedicated people to the account. likely double-counting duplicate resources that are spread out (e.g. legal, finance, engineering, data).
Liquidity management on Gnosis Chain. does karpatkey actually have expertise in this area? it is likely not rocket science, but in case of loss of funds due to negligence (such as in the case of sDAI/EURe situation), what recourse does the DAO and users have?

i don’t think the DAO should underpay, but it shouldn’t be extracted. it’s paying $6.3m to karpatkey now, why is it being adjusted?

Karpatkey · November 12, 2025, 5:40pm

GIP-128 is indeed five months old and it the lesson learnt from the actual execution is posted on the new Terms of Service, namely that we are moving forward with an updated scope that DOESN’T overlap with the Gnosis LTD approach and scope

Karpatkey · November 12, 2025, 5:42pm

Under the original terms of GIP-58, the AUM fee did indeed consider GNO held by the treasury but that was amended and changed when we moved forward as a flat fee for management for November 2024. GNO positions were and are considered Operational, which means they are excluded from Performance Fee calculations.

The performance fee only applies to the positions marked as under a benchmark, so idle tokens on a wallet do not apply to this. Part of the new reporting initiative is going to be a very clear information flow of what positions fall under this.

We curate the allocations we deploy with a very clear r/r as a north star. What this means in practice is that we will let opportunities go if they are not up to our standards in regards to risk / reward. While the new Performance Fee based on benchmarks means that kpk may get less fees in general, we maintain the north star regarding risk management and returns.

kpk has been in charge of liquidity management for Gnosis Chain since the original the amendment done under GIP-58

Karpatkey · November 12, 2025, 6:01pm

kpk Liquidity Management is divided into Operational and Yield Farming positions. Operational positions are meant to cover a need or requirement and not necessarily follow a yield on itself. For Balancer EURe/sDAI, the pool served as the primary liquidity position to enable Gnosis Pay interactions which meant that we kept the monitoring focused on 2 separate focus:

Critical Total losses, as in a general tracking related to the pool funds a whole
Efficiency, active monitoring for liquidity swaps/slippage/price impact/utilization/volume

It was understood that even a stable pool could have variations related to its token composition and that was an expected behaviour for the pool math.

Yield Farming position monitoring on the other hand tracks:

Critical Total losses, as in a general tracking related to the position
Position health, token amounts, USD values, yield/rewards

What has been changed around this? We revamped the way we track positions to alert us for this kind of issues, including operational liquidity positions.

The questions:

Why did you wait 2 weeks before starting to fix the vulnerability?

Why didn’t you communicate about this vulnerability, while your community was losing hundreds of thousands of dollars, either before or after the problem was fixed?

Why didn’t you produce a counter-report if you were not satisfied with my figures?

Why did you choose to ignore arbitrages via deposits/withdrawals, as well as weekends in the calculation of losses?

Why haven’t you assumed full responsibility as the manager on GnosisChain?

As stated on our original timeline, on February 20th the abnormal volume discovered in the pool led to the review done by kpk, gnosis and balancer. This review was done over this 2 week period. Measure twice, fix once.

On the communication side, we already admitted fault. We were more concerned to solving the issue and not enough on communicating it.

Arbitration between deposits and withdrawals was ignored as it represented less than 0.1% of total transactions over the review period (<300 out of 330k transactions reviewed). The calculation normalizes the swap outcomes vs expected outcomes, irrespective of the day of the week.

kpk maintains a duty as GnosisDAO treasury manager which is where our responsibility ends, there was no loss of principal for GnosisDAO assets but as stated here we returned 774.1735 GNO as a symbol of goodwill.

DeFi liquidity in general follows USD values, and growing meaningful foreign exchange liquidity has been one of the core points we have worked on and will continue improving.
This work is never ending since some of the projects do not have organic volume, so part of the work done is also maintaining correct pricing. But the treasury cannot provide liquidity for every single token .

NolanV · November 14, 2025, 6:51am

Sorry, I never had the opportunity to learn English, but if I understand what you’re saying correctly, you were aware that the oracle wasn’t updated over the weekend because you were expecting these losses.

Can you confirm this?

Since I’m not a specialist like you, with your immense skills that we mere mortals can barely comprehend when your magnanimity drives you to share your priceless knowledge.
That said, this looks like a misunderstanding of a basic Balancer function on your part.

But hey, I’m just an idiot

=> And you haven’t answered all the questions. <=

Kisses.
Nolan.

Karpatkey · November 14, 2025, 9:27pm

No, that is not correct.
We are referring to the calculation done here.

Post-Fix Behavior: After the cache duration was corrected, running the indexer doesn’t provide meaningful results since actual vs expected swap outcomes would be zero

Why was no dedicated website created?

A dedicated site would indeed have improved visibility and user experience. In this first iteration, we prioritised rapid deployment and low operational overhead, using existing interfaces and a dedicated Dune Dashboard to minimize complexity while providing key updates on points and participation. That said, we fully agree that a standalone page could have added value, and it’s something we see a marked improvement.

Why wasn’t there a broader marketing effort?

SafeBoost was launched as a targeted pilot, focusing initially on existing ecosystem users rather than a mass public campaign. The intent was to validate the incentive mechanics, gather data, and avoid attracting opportunistic activity before ensuring the system worked smoothly. That said, stronger communication would certainly have helped, and we’re aligned that future campaigns should include a more visible marketing component.

Why reward the top X users when the budget is small relative to their balances?

We understand this concern. The choice was motivated by the desire to reward meaningful activity, involve our Partners (Pooltogether, Beefy and Contango) rather than very small or sybil-like interactions, especially within a constrained budget (250,000 SAFE to distribute). The goal was not to enrich the largest users possible, but to anchor the program around verifiable, on-chain engagement while avoiding fragmentation.

In practice, the top users received a reward large enough to meaningfully incentivise them to participate again if there were a new program, while the lowest tier received a small amount, roughly the equivalent of a pizza ($20 eq SAFE the day of distribution). 2,000 users were selected in total, balancing reach with impact given the available budget.

Why not target GnosisPay users, leveraging GP’s built-in Sybil resistance?

This is an excellent suggestion. The main reason it wasn’t done initially is that SafeBoost was designed to be chain-wide rather than product-specific. But you’re absolutely right that GnosisPay’s sybil-resistance could enable a more equitable and impactful incentive design.

NolanV · November 15, 2025, 6:55am

Is this some kind of quantum management?

The weekend loss wasn’t expected, but if we’re going to look at expected vs. unexpected losses, then it becomes an expected one. You can’t just decide to include losses from the price not being updated for 3 hours in your calculations, but then decide not to do so for the 48 hours over the weekend.

What I want to know is if kpk was aware that the oracle wouldn’t be updated over the weekend when you deployed our money.

Because there are only two outcomes in this story: either you knew and it’s incompetence, or you didn’t know and it’s negligence.

Digger · November 15, 2025, 12:31pm

Ok chatGPT, can you please rephrase this to make it sound more human?

Deepcryptodive · November 16, 2025, 8:27pm

@Digger Gnosis Pay card users (including myself) were rewarded btw. As a matter of fact, the majority of recipients were Gnosis Pay users. Funds were directly send to the Safe wallet linked to their card.

I think that what was meant above is that restricing the incentive programme to only Gnosis Pay users wouldn’t make sense. You want to attract new people and showcase the broader Gnosis ecosystem, not just reward existing users of a single app.

NolanV · November 16, 2025, 8:53pm

Hello kpk

The problem is that the whole point of an incentive campaign is to attract people, but in this case, people weren’t aware of it.

Furthermore, you’re being dishonest again; the campaign targeted users of Beefy, PoolTogether, etc.—DeFi protocols that were not accessible from the GnosisPay Safe.
Even the wallet interfaces didn’t support the removal of SAFE from GP, further proof that it wasn’t something that had been thought through.

Netrim · November 17, 2025, 1:04pm

I cannot comment on the “people weren’t aware”. The Safeboost campaign was ideated and spearheaded by kpk as part of the Joint Treasury operations with full comms from all involved parties.
While it is true that Gnosis Pay users wouldn’t be able to interact with the boosted protocols, they were the only one that had the easy reach to mantain usage since it was seamless for them.
About the SAFE token not being directly available on the Wallet partners, that was indeed unfortunate but in no way directly detrimental to SafeBoost itself.

NolanV · November 17, 2025, 1:24pm

Don’t worry, you are perfect; it’s just others who are unkind to you.