The Gnosis decentralized autonomous organization (DAO) is currently mulling over a proposal to conduct a large-scale buyback of its native GNO token. The proposed $30 million buyback plan was put forward by Thanefield Capital, a cryptocurrency fund with a vested interest in the Gnosis ecosystem.
According to Thanefield’s proposal, the current market capitalization of GNO, based on its circulating supply, is significantly undervalued compared to the assets held by the Gnosis DAO. The fund states that while the DAO holds $630 million in non-GNO liquid assets and $100 million in venture capital investments, totaling $730 million, the circulating supply of 1.53 million GNO tokens is valued at only around $424 million.
The buyback program would be executed over six months, to realign the market value of GNO with its perceived intrinsic value. The execution strategy outlined in the proposal involves two approaches.
Firstly, $15 million would be allocated to a time-weighted average price (TWAP) strategy, purchasing GNO tokens at a consistent daily rate of approximately $83,333 over the six-month period. The remaining $15 million would be deployed through a more discretionary approach, allowing for optimization based on market conditions.
The proposal has gained preliminary support from the Gnosis community, with 88% out of 28 voters on the governance forum expressing their approval so far. Notably, Gnosis co-founder Martin Köppelmann has endorsed the proposal, contingent on the buyback being tied to a “growth program” aimed at attracting more users to the platform. On the flip side, some believe a buyback is too early and resources should be channeled toward improving the utility of the GNO token.
The Gnosis DAO oversees the Gnosis Chain, a layer-2 scaling solution for Ethereum, as well as the CoW Protocol, a decentralized exchange. The DAO also has ties to Safe, a popular multi-signature wallet provider on Ethereum that spun off from Gnosis into its own DAO.
