[GNO] Collateral Onboarding Application

On behalf of the Gnosis community, I am submitting the proposal to add GNO as MCD collateral.

[GNO] Collateral Onboarding Application

1. Who is the interested party for this collateral application?

Gnosis

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

GNO is the governance token of GnosisDAO, which was launched November 23rd 2020. The GnosisDAO is giving GNO holders direct stake in Gnosis’ strategic decision making and fund management. Via token-weighted voting, GNO holders may participate in core roadmap decisions of Gnosis’ core product lines. Funding of projects and other initiatives are made available only for proposals approved by a majority of GNO token holders.

GnosisDAO is guiding development over Gnosis’ core products, including:

  • The Gnosis Safe Multisig: a platform for digital asset management used by MakerDAO, Ethfinex, Synthetix, Uniswap and many more. Currently holding 1.6% of the total ETH supply and over $32B in total value, Gnosis Safe is a leading smart contract account solution for the Ethereum ecosystem. Dune Analytics Dashboard for Gnosis Safe

  • The Gnosis Protocol: a meta DEX-Aggregator which facilitates gasless order placement and the ability to match retail traders with each other, hence offering better prices than pure dex-aggregators whilst protecting users against MEV. The first customer facing interface is CowSwap.

  • The Gnosis Auction: Gnosis Auction is a platform for conducting fair, transparent, and decentralized token price discovery. Batch auctions set the price exactly where supply and demand meet. This ensures the same fair price for all participants.

  • OpenEthereum: the former Parity Ethereum client, since May 2020 maintained by Gnosis. OpenEthereum provides the core infrastructure essential for speedy and reliable services for miners, service providers, and exchanges that need efficient synchronisation and maximum uptime.

The GnosisDAO treasury consists of 8M GNO Tokens that are being sent via a vesting contract over 8 years, as well as 150k ETH.

3. Provide a brief history of the project.

Gnosis was founded in 2015 by Stefan George and Martin Köppelmann as part of ConsenSys. In April 2017, Gnosis raised funds and spun out of ConsenSys to become an independent company. Gnosis has since built and supported a variety of products contributing to the Ethereum infrastructure. Please find a timeline of the major milestones of Gnosis’ core products here:

  • 2015: Development begins on Gnosis’ prediction markets platform, which later became the Conditional Tokens Framework. A first iteration launched on Ethereum mainchain one week after Ethereum’s launch.

  • Feb. 2017: Launch of Gnosis Multi-signature Wallet, which was quickly trusted by projects such as Golem and Aragon to securely manage their ICO treasuries.

  • May 2019: Gnosis “awakens” community-governed organization DXdao, which has since separated into a distinct entity that maintains a close collaboration developing interfaces for our underlying open-source protocols, such as Omen and Mesa.

  • December 2019: launch of the Gnosis Safe, the successor of the Gnosis Multisig. It is now storing more than 15 billion USD, including more than 2% of the total ETH supply.

  • July 2020: 5 years of building on prediction markets culminates in the release of Omen, DXdao’s decentralized prediction market platform powered by Gnosis’ Conditional Tokens Framework.

  • April 2020: Gnosis’ DEX Gnosis Protocol v1 launches. It has hosted many IDOs for projects including mStable, API3 and many more. Gnosis is currently working on an advanced IDO protocol that will offer more functionalities and flexibility. Additionally, Gnosis is currently working on Gnosis Protocol V2, a Meta Dex Aggregator which matches the orders of retail traders with each other and channels those orders that can’t be directly matched to underlying on-chain AMMs for execution (more details here).

  • May 2020: OpenEthereum (formerly Parity Ethereum) begins a new phase of stewardship by Gnosis, with support from the Ethereum Foundation

  • November 2020: Gnosis decentralizes governance and decision-making to GnosisDAO, a prediction market-driven collective.

  • April 2021: Gnosis Protocol v2 launches. The first live UI is CowSwap, the next one will be the Balancer swap interface, which is integrating Gnosis Protocol v2 to offer their users better prices and more security. Within the first week of being live, CowSwap already ranked 7th in number of distinct traders across all Ethereum DEXes.

Gnosis’ core mission is to help Ethereum strive, and is thus also engaging in a few community initiatives, such as running Open Ethereum (the former Parity Client), FullNode (one of Europe’s largest Ethereum development hubs), organizing DappCon (one of Ethereum’s core community conferences) and has its own Ecosystem Fund, GECO, with the aim of funding early stage Ethereum projects.

Gnosis is also very committed in supporting the MakerDAO ecosystem, mainly:
Since November 2019, Gnosis provides core infrastructure for the stability of Maker/DAI by running a light MakerDAO oracle.
When the MakerDAO system was at risk in March 2020 (Black Thursday event), Gnosis opened a new CDP with 30k ETH, selling the 600k created DAI to increase the supply of DAI to support its peg:

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

5. Link any available audits of the project. Both procedural and smart contract focused audits.

  • Gnosis Safe: Both formal verification as well as multiple security audits have been conducted on the Gnosis Safe Contracts (Link).
  • Gnosis Protocol: Audit Report.
  • Prediction Markets: Prediction Markets V1 contracts (link), Conditional Tokens contracts (link).

6. Link to any active communities relating to your project.

7. How is the applying collateral type currently used?

GNO is the governance token of GnosisDAO, giving GNO holders direct stake in Gnosis’ strategic decision making and fund management.

Currently, GNO holders are able to use their GNO to signal their preference in proposals Gnosis should undertake which may maximize GNO value via the Gnosis Forum and Snapshot. Via token-weighted voting, GNO holders may participate in core roadmap decisions of Gnosis’ core product lines. Funding of projects and other initiatives are made available only for proposals approved by a majority of GNO token holders.

The GnosisDAO treasury consists of 150k ETH, and 8M GNO Tokens that are locked in a vesting contract and released linearly over 8 years. The linear vesting schedule ensures that GNO becomes accessible to the GnosisDAO gradually and does not allow for any abrupt changes to the token supply and its value. Funds obtained in the GnosisDAO treasury can only be touched via a three-phase governance process that requires public forum discussions and a snapshot quorum threshold of 4% of the circulating GNO supply.

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

GNO was issued in an ICO in 2017 by Gnosis Limited. Gnosis Limited is incorporated in Gibraltar.

9. Where does exchange for the asset occur?

GNO can be bought and exchanged on centralized exchanges such as Kraken, Bittrex and Bitfinex, as well as on a variety of decentralized exchanges such as Uniswap, Balancer, SushiSwap and more. Find a list of trading pairs on centralized and decentralized exchanges here.

10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

N/A

11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

No, there have been no regulatory registrations for the GNO.

12. (Optional) List any possible oracle data sources for the proposed Collateral type.

13. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.

9 Likes

I like the Gnosis project and hopefully GNO gets onboarded as collateral.

1 Like

My first thoughts is re the cost to maintain oracles for this.

Right now there are active discussions about unapproving defi tokens for that reason.

1 Like

I disagree on the discussions about considering oracle costs and off-boarding some tokens, especially in an environment where the number of quality tokens is very low. Tokens are not our customer, it is users who hold a diverse portfolio of crypto assets. We should look at some tokens as loss leaders to simply get those users to see us as a one-stop shop for all their borrowing needs.

Specific to GNO on-boarding, I want to highlight that GnosisDAO has been one of our biggest supporters for years and I think it is time for MakerDAO to reciprocate. One more anecdote I can remember is that Gnosis was one of the first big projects to open a large CDP to signal their vote of confidence in Single-Collateral Dai.

7 Likes

So I haven’t done a deep dive yet, but when I looked at ZRX back when it was liquidated over the course of many hours, it looked like very few users (I think 2, but don’t quote me) had opened a ZRX vault first. Most of the vault classes being considered for offloading have <25 users.

That, of course, does not imply we need to limit experimentation with new collateral. So I would view the discussion about offboarding as independent of onboarding unless someone here has a crystal ball to say which will be profitable.

Hope that allays some of your worries!

3 Likes

Gnosis are true leaders in the blockchain space, and they have supported Ethereum from its early days. They are bringing constant innovations, Gnosis Safe and their other products are widely used among the whole crypto sphere.

We at xDai have been collaborating with Gnosis for a few yeas, and we fully support their proposal to add GNO as collateral on the Maker platform.

5 Likes

Does this mean GNO would itself utilize this type of vault, if approved?

Thanks!

1 Like

Super cool–I really like the concept behind CowSwap–I hope y’all have some serious success with such. And like @PaperImperium mention above, it would be super cool to know if you folks will open vaults and mint some DAI–use it for something like a GNO/DAI pair on Balancer and CowSwap.

4 Likes

This is a decision GnosisDAO members will have to vote on but I see it as very likely that GnosisDAO is going to use some of its ETH in a MakerDAO CDP to participate in yield farming activities.

2 Likes

Thank you :slight_smile: I like the idea of creating a DAI/GNO pair on Balancer!

2 Likes

Considering GNO is smaller cap and also iliquid than other pairs, maybe GnosisDAO members can vote beforehand to see if it’s approved, they are going to use the vault? If they vote for it, might help with the application.

3 Likes

I didn’t mean to imply it’s a positive/negative or a requirement. Just that it would be helpful to know if 1) there’s already a minimum demand for this vault, but that’s counterbalanced by 2) the folks who can mint the token using it as collateral.

3 Likes