develop applications (venture studio) with projects coming out of it like Safe, Cowsap
investments in the web3 space
The result of both 2) and 3) is that GnosisDAO holds substential amounts of tokens other than GNO, that where either granted to GnosisDAO as part of a spinout from projects started within Gnosis or tokens (e.g. COW, SAFE) acquired via investments GnosisDAO did. (e.g. OLAS, GEL, TICK)
While those tokens are held by GnosisDAO and GNO holder have control over GnosisDAO there is already a direct link between GNO and those token holdings. Still, the outside perspective is often that GNO holders did not benefit sufficiently from successful token acquisitions of GnosisDAO. This proposal tries to address
a) a clear link between other token holdings and GNO value
b) long term aligned incentives between other projects GnosisDAO holds token of and GNO/Gnosis
c) increase liquidity and trading activity of GNO on Gnosis Chain
The concrete proposal is, that if a token (and it’s price) does well in comparison to GNO that the token is used to buy back GNO. However - this GNO is now used to set up an AMM against more of the token. This achieves the three points above. Is has a positive direct impact on GNO price. However, once the buyback is done it aligns incentives (“bonds token prices together”). If GNO appreciates in value it will lead to buying pressure for the “partner token” and vice verca. It will lead to long term thinking as only if the other token remains valuable in the long run the on-time effect of the initial GNO buy back will have an effect because if on the other hand the token would become valueless all the GNO initially bought would be released into the market again.
Finally this helps to increase liquidity and trading activity on Gnosis.
To get a feel that this could have a significant effect on the economics of GNO: The biggest token positions of GnosisDAO are currently Safe (15% + 5% shared ownership with Safe DAO) and Olas - the Safe tokens alone have a value (at least measured by the valuation of the $100m investment round of Safe) of $250m (though this was at bull market times, a lower evaluation when Safe becomes tradable is very possible). Under this proposal up to half of those token could be used to fund a GNO<->Safe AMM. Adding other tokens it could mean that a significant percentage of GNO tokens could end up in those AMMs pools.
While Safe tokens are still illiquid GnosisDAO holds a significant stake in OLAS (trough GnosisDAO being an LP in the factor fund (GIP 38) - this could be the first token to set up such an AMM.
In general I agree, providing some liquidity of the tokens against GNO is a good idea. Regarding Olas imo it should only be a small position cause trading volume is low and just about 10% of max supply is circulating right now. Maybe we should discuss some parameters how to determine what amount we should choose taking in account trading volume (on different chains), percentage of total supply that’s owned by GnosisDAO and maybe also the price of GNO in comparison to the assets. Would be great to get some advice from the Karpatkey ppl.
Yeah, GnosisDAO should try to seek symbiotic relationships to other projects it holds tokens of. This of course also means not e.g. not “dump their token”. However - thanks to e.g. Cowswap twap orders it is possible to spread out such a trade over a long time period (maybe 6-12 month) and indeed - in case that token/GNO ratio becomes “bad” (because either the token drops in price or GNO increases a lot) selling tokens for GNO should be stopped altogether.
Maybe someone from Karpatkey can compile a list of GnosisDAO token holdings including a rough FDV of those tokens in relationship to GNO. As an example COW current FDV is ~300m while GNO is the in range of $600m. So the correct question to ask wether worth of COW is correct at 1/2 of GNO.
Love this idea. It drives a concrete value prop for how GNO token benefits from GNO DAO investments. Definitely would need to manage it carefully as you mention so other projects dont think “GNO DAO is dumping.” Similar to how VCs operate, this is an investment exit plan. Using TWAPs over long periods reduces stress on token price so good thought there too. Market timing is less of an issue here as GNO DAO would be engaging in basis trades (Sell token XYZ buy GNO) so trades should be largely market agnostic – in bull markets both tokens more expensive, bears less. This should likely be done programatically – dont try to time or relative value trade as much. That would be a time suck with limited proveable value. I assume we would hold a vote saying something like “GNO DAO proposes to sell 10% of token XYZ holdings over a period of 1 year, TWAP basis.” and once approved set it an forget it. There is slight headline risk – “GNO DAO exiting XYZ token position” doesnt read well. Would need to flag that this is to manage liquidity in the DAO, is for only a portion of the position, and doesnt represent doubt in the underlying protocol.
One other thought… I wouldnt mind setting this up by delegating decision power here to someone. Likely Karpatkey. It would be taxing for the DAO to vote on each decision – perhaps better to delegate the power in a vote to Karpatkey to monetize up to X% of an investment position, taking into consideration liquidity and timing. Then they would be expected to provide a report on their actions. The DAO can step in and remove approval if we disagree with their actions.
I’d also like to know this. There are many things that lack transparency. GNO is a deep value play, and a bit more transparency from the team (regarding token holdings, investments, expenses) could significantly drive the price up.
I guess we might have to initiate an on-chain vote to obtain this information.
OLAS investment was done via Factor (the fund that was part of GIP 38)
Factor has stopped deploying capital and the DAO (as the only LP) will receive the assets (after subtracting carry). This process is currently ongoing - I currently don’t know exact numbers but it should be in the range of 8-9m OLAS tokens.
Once the transfer is done those tokens will be directly in control of GnosisDAO and thus can easily be tracked by the addresses GnosisDAO controls or will also show up in the Karpateky reports.
Thank you @mkoeppelmann - I would like to inquire if there have been any recent advancements pertaining to the initiatives mentioned in your proposal.
Furthermore, could you please confirm whether any GNO token buybacks have been executed using SAFE from the GnosisDAO treasury as alluded to in your post?
Considering the underperformance of GNO in comparison to ETH, currently trading at its lowest over the past three months—despite the addition of significant assets to the treasury (i.e. SAFE, OLAS), coupled with its persistent trading below the Net Asset Value (NAV)—despite previous undisclosed buybacks by the DAO—I am keen to understand if there are any concrete strategies being implemented to bolster investor confidence in GNO.