chud.eth

an investment thesis without numbers is just a pre-written obituary. cultivating @sandboxtreecap

[chud.eth @chud_eth]

I would like to coin the term PPP: principal protected ponzi; the worst that can happen to you is you get your money back at a date you decide (no time rug).

gov proposal just went live, things moving faster than expected tbh

OHM CDs launching in ~1wk

only $1m cap to start which will likely get instafilled, then a short capped rollout before opening the floodgates

good chance for everyone to watch the system working before being able to ape properly

reminder: you deposit USDS, get OHM calls which you can convert any time, protocol uses the sUSDS yield to buy and burn, send OHM up, make your calls worth more

something to think about for any of you second order thinkers:

if you see someone deposit $100m of deposits which means $4.5m/yr annualized buyback and burns, are you more or less likely to then deposit to CDs yourself?

you deposit, and the next guy sees even more programmatic buy pressure incoming, maybe now it's up to $6m/yr. are they now more or less likely to also deposit?

yes this is all pure financial engineering, the token is the product, but do you want to play the game?

[chud.eth @chud_eth]

disappointed to see the @gnosispay exploit happening, especially as it's @gnosis_ flagship product and a lot of users will flee and there'll be friction to get them back in.

obviously I'm a very large GNO holder so have financial interest here and watching keenly.

lots of implications here for GNO holders and the wider conversations about DAO/NAV/risk of retained capital saved for another day, but today I have to say I'm overwhelmingly impressed by the crisis management from the gnosis team. looks to me on first view that the damage has been really quite contained because of a fast technical response. same happened during the balancer exploit. despite fundamental disagreements on other fronts, this has been really top tier.

👏

[chud.eth @chud_eth]

a third party proposed increasing the Olympus CDs cap to $60mil with a $5mil/day target

proposer funded directly from large wallet that recently bought $4m of OHM on open market, so clearly wants exposure.

reminder: deposits to CDs have all yield go to buying back and burning OHM => makes the CDs more likely to convert profitably => new deposits to CDs higher +EV => positive feedback loop

$50m of hypothetical CDs (idk how much they want in reality) = extra $5.5m/yr annualized buybacks just from the CDs

if they don't convert, free $5.5m of buybacks and protocol gives nothing back in exchange, win.
if they do convert, backing goes +10%, everyone can borrow 10% more per OHM => hOHM does another $15m in OHM purchases over the following yr, which...

makes it more attractive for someone to ape another $50m into CDs and start it all over again

(idk if the proposer will ape 50mil or anything at all, but seems odd to propose this if you didn't want to use it)

[chud.eth @chud_eth]

Gnosis Ltd dressing up the situation as something it's not is the pattern.

Not 10%, trading much further below NAV.

No, you and your mates are the useless leechers. When was the last time you were involved in something that turned a profit?

On payroll again now I hear, $1m/yr! Can't be bad for doing sweet fuck all.

[chud.eth @chud_eth]

Gnosis Ltd employees trying to make a big statement around large independent GNO holders being happy with the status quo & spending.

ty @arkham for the easy layup here

[chud.eth @chud_eth]

don't really understand this take tbh - do you think $30m/yr spend with $400k revenue is a good thing? sustainable? destined to be crippled without intervention? genuine question - leadership are the ones on course to cripple tokenholders.

think you're missing the balanced view which is that this level of spending with no return is taking advantage of GNO holders, especially now that we know that they will use founder held GNO to control governance.

We tried to engage on improvements, product, allocation for months but wasn't much receptivity. Then they rugged 250k tokens and stopped buybacks, and now talking about spending even MORE to fix their poor growth. There should be an option for people to exit at a fair price if they don't buy into that wild vision.

Lastly, the framing that we're seeking 'max money' is not really accurate. NAV is a very neutral value, they keep all the intangible value spent to date - you can't say that they've been allocating $30m/yr acceptably on one hand, and then on the other say that NAV without the value created by any of that spend is extractive on the other. If it's been worthwhile spend, then the value is given up by people exiting at NAV. If it's not been worthwhile spend, then.. well, why should they get more? Gotta choose one.

[chud.eth @chud_eth]

update on GNO

vote didn't pass, but the issue is stark and unavoidable for leadership.

bruteforcing stuff with their tokens with a dual role of leadership AND largest tokenholders works once for 'defensive' framing (although totally disagree ofc). however, continuing to do so - especially if it moves to bruteforcing spending - would really throw the idea that Gnosis Ltd is independent to the DAO into problematic territory (and it is required to be)...

will give a week of cooldown and hopefully engagement before initiating a new proposal.

[Wismerhill @0xWismerhill]

Gnosis GIP-150 failed 28/72. Strip out Gnosis Ltd leadership's votes and it flips to 78% in favour. Non-team holders want a fair exit and an answer on the NAV discount. Leadership's response: maybe more spending, no exit.

Longer version:
GIP-150 did not pass. The final vote was 28% in favour, 72% against. Excluding Gnosis Ltd leadership’s tokens shifts the result to 78% in favour. Their personally held tokens are legitimate, circulating, and rightly count. It is only the Ltd-held GNO that we categorically reject as circulating until it is deployed on endeavours generating greater than 1x ROI.

This breakdown matters because it makes a structural problem unavoidable. The same three individuals are Gnosis Ltd cofounders, Ltd executives, and as co-founders of Gnosis, the largest individual GNO holders. They are funded by the DAO, operate the entities receiving DAO funding, and hold the voting power that decides whether that funding continues. Their personal token votes are not cast as independent tokenholders weighing a proposal on the merits; they are cast in alignment with their roles as cofounders and directors of the entity the proposal affects. When the votes attributable to that concentration are removed, the remaining holders speak clearly: 78% in favour of a fair exit and an honest answer to the discount to NAV. What is currently being represented as “the DAO’s view” is in substance the founders’ view, voted through by founders, on a proposal that constrained the founders’ own operational latitude. That is not a decentralized DAO.

The substance of the result is unambiguous regardless of how one feels about the specific mechanism. There is clear and undeniable support among GNO holders outside of Gnosis Ltd leadership for meaningful change, along with a mandate to prioritise trading above true NAV at the bare minimum and providing a fair exit mechanism for those unwilling to remain through another pivot. A protective mechanism for those willing to give the new vision a chance, without necessarily signing the entire treasury away to spending, should also exist. Both should co-exist, and become part of Gnosis DAO.

The response from leadership in the days following the beginning of the vote has been the opposite of what a 78% non-team result calls for. Leadership has verbally floated a meaningfully higher operational spending envelope for the next funding cycle, as well as a hostility towards exploring a solution, while pretending there was interest from third parties to purchase participations in GNO, yet these third parties would not even buy it below NAV. Reading a result in which 78% of non-team holders signalled they want a path to realize NAV as a mandate to ignore an adequate exit solution and increase spending is not a tenable position. It is the precise inverse of what was voted for, and it confirms the concern that motivated this proposal: that operational discretion at Gnosis Ltd is being exercised without regard to the tokenholders the DAO exists to serve.

We will give leadership a week to reflect on this striking result and consider whether they genuinely accept its implications. If they do, and wish to engage on shaping the next proposal to protect non-team GNO holders, we are ready to work with them. If leadership continues to disregard the outcome, we will have no choice but to bring forward a further proposal without their input.

We trust that there will be no additional spending bruteforced through by these founder-held tokens, against the spirit of a decentralized DAO. Defensive voting with 385k GNO over disagreements on mechanism is one thing. Using that same concentration to force non-consensual spending increases against a vote that just produced a 78% non-team signal for value return is quite another, and would be impossible to reconcile with any claim that this is a tokenholder-governed organization.

We look forward to engaging further with GNO holders to shape the proposal. Whether you are a long-term holder or a new holder, please reach out to provide input.

[chud.eth @chud_eth]

1) Gnosis Ltd removed most of the GNO liquidity in order to conduct buybacks, which they've now stopped but haven't readded liquidity. Look at how much GNO wants an exit on the snapshot, then look at the liquidity.

2) You've misunderstood the proposal. The opt-in vote isn't part of the decisive vote - anyone could have redeemed, even those who voted no during this voting stage. Step 1 is 'the proposal', which is live now. Step 2 is what you're referring to, which is just a secondary snapshot to signal who wants to exit, so that the treasury manager can get their assets ready in the contract. 'No' voters in the decisive proposal would have been eligible still. Otherwise, treasury manager has to put ALL assets into the redemption contract because they don't know who wants to leave. It's not a self-fulfilling mechanism at all, and was deliberately done this way so that normal operations could continue for the rest of the assets without disruption.

[chud.eth @chud_eth]

Incredible scenes yet again - this is precisely the problem here from this team. This is what happened last time in private convos, they committed to changes, a definition of NAV, then 5 mins later turned it on its head and rugged it all.

Commitments to progress, almost immediately reneged.

'Signal how much wants an exit option', 'We will make sure nobody will be trapped'

and then 'yeah actually I realized nobody will invest more money with us because of our track record but we still want to spend a lot more, so all we can do is match buyers and sellers' - so if no buyers come in then what, we're trapped. We're trading under NAV lmao, there's no long queue of GNO buyers, it's delusion.

it's the latest in a long series of rugs.

It's insane that they've used 400k of founder-held GNO to vote this proposal down and frame it as a 'supermajority' - without founder tokens it would be 90% voting for it to pass.

Don't get me wrong, fully accepting of the result of this vote given founder tokens are circulating - we'll have to come back with another one (and another one until our funds stop being a slush fund) - but to still bury your heads in the sand that you're doing an awful job at managing this situation just exemplifies why it won't go away.

now rugging the buybacks too btw! because guess what, he wants to spend MORE than the $30m that was spent with ZERO return.

[chud.eth @chud_eth]

"we have interested parties that want to take long term bets on Gnosis" but they refuse to pay >$0 for Gnosis' enterprise value on open market? clearly BS

"and EEZ" so this latest 2 month old pivot? great, another grand plan that looks and smells like public goods with 0 hope of an ROI!

literally trapping ppl after saying they won't

[chud.eth @chud_eth]

@mrtdlgc @ivangbi_ not derailing anything... you accused me of something and I put you right on the facts lmao.

[chud.eth @chud_eth]

No, you're making shit up with absolutely zero basis just because you want it to be true so desperately. We bought GNO and attempted to engage on products, treasury, etc. for a long time. Do you want to play a game of chicken on that and call it a lie? I'll happily prove you wrong. Also, the biggest yes voter has held GNO for years. Your BS take doesn't stack up one bit.

tldr; do you want me to post those chats to stop your runaway fantasy or what? If I do, are you going to apologize for making shit up so confidently?

Let's disprove you on the spot tbh - if they walk back the 250k GNO rug (circulating before spend, when only spend is on >1x ROI stuff) and stop-start buybacks just to fuck OTCers over, then I'll lock my GNO another year. How are you going to spin this one now?

[chud.eth @chud_eth]

not the case, kept trying to engage on buybacks for months before having to resort to this - ask the founders, if they're unwilling then i'll publish the chats myself tbh to stop this nonsense take. we supported the status quo until the buybacks stopped for shady otc purposes & introduction of non-circ GNO. You and everyone else totally skip past this point, that we've held GNO for months happily with no rfv prop until that line in the sand.

the reductionist take is yours, that everything boils down to rfvoooors.

[chud.eth @chud_eth]

will be buying more GNO and put forward a new proposal soon - 'wait this out' isn't going to work here. Further, I think conflicted founders swinging the vote here is one thing (have my own thoughts, but whatever), but swinging the vote when it comes to the next funding proposal to their own org would be something else entirely..

If @StefanDGeorge @tw_tter want to engage on what the next proposal looks like then happy to get something acceptable to both sides passed asap, otherwise we'll probably be posting GIPs 151-200 until GNO holders finally have some financial protection against what is increasingly obvious - that many people see GNO holders' treasury as an infinite pot of cash for their feel good, zero revenue projects.

we will get checks and balances introduced, buying more until it's done.

[Wismerhill @0xWismerhill]

GIP-150 vote is now 54% against after an address that was funded from the Gnosis deployer 9 years ago voted against (probably a founder). If you remove the 2 related parties (Stefan, Gnosis founder and Ltd CTO), the voting is 83% in favour.

I took the time to address some of Gnosis Ltd's points below.

[Wismerhill @0xWismerhill]

https://t.co/FLqGZexl38

[chud.eth @chud_eth]

It's called a governance proposal, and it's being voted on. Not by half baked fetal alcohol donkeys like yourself with voting power weighted by extra chromosomes, but voting power weighted by GNO holdings. Really simple, mate.

'there's technically no contract to say governance is binding' and 'there's some unwritten implicit right to spend the treasury on public goods' are the most incongruent pair of arguments.

[chud.eth @chud_eth]

@DrNickA A token with absolute rights to direct the treasury. But instead, you think you unilaterally decide. Absolute twat.

[chud.eth @chud_eth]

@DrNickA You fund it then with your money. Otherwise, it's you that can fuck off with your desire to spend my money on your public benefit. 'people beyond the DAO' what a retard jfc.

[chud.eth @chud_eth]

so your *implicit* ideals are gospel and should be allowed to drain the treasury to zero in the name of vibes, but a NAV per GNO (*explicitly* represented btw) is not allowed to be considered for governance execution, and called 'treasury rugging' when people want assets attributable to their own tokens. incredible, got it.

[chud.eth @chud_eth]

@DrNickA but it's apparently explicit that there's a mandate for indefinite public goods spending? No, you just made it up.