The token market value is severely below the treasury reserve funds, leading Gnosis DAO into a controversy over redemption proposals.

Written by: Protos

Translated by: Chopper, Foresight News

A group of radical investors (or so-called treasury "plunderers") is launching a treasury redemption plan proposal targeting GNO token holders.

GIP-150 proposes a one-time, voluntary, proportionate redemption plan for the treasury. If the proposal passes, supporting holders will proportionally share a portion of the over $220 million reserve funds in the Gnosis DAO treasury.

This proposal comes less than six months after the vote to dismiss the treasury manager KPK. The proposer Wismerhill stated that the market price of the GNO token has been trading at a discount to the net asset value of the Gnosis DAO treasury for a long time, and the discount is continuously widening. He added that despite the DAO recently transferring $22.5 million to Gnosis Ltd, the discount relative to net asset value has further increased, and the value gains that GNO can capture are minimal.

The proposal voting has opened, with a deadline of May 12. Although initial support votes were leading by a large margin, currently, 65% of the 330,000 votes cast are against it.

The redemption amount will be calculated proportionately based on 1.3 million eligible GNO tokens, with Gnosis Ltd's held tokens excluded from redemption. The reasoning given in the proposal is that this entity has long received financial support from the DAO.

According to this calculation, the redemption value per token is approximately $170, which is nearly 30% higher than the current market price of $131 for GNO.

Reactions from the DeFi Community

DeFi commentator and GNO holder Ignas admitted, "The logic of RFV does have some merit," but also pointed out, "This is purely an arbitrage trade and cannot be considered a moral action," and he has cast a vote against it. (Note: RFV stands for risk-free value.)

Ivangbi, head of DeFi at the Ethereum Foundation, holds a similar view, stating that since Gnosis has never publicly advertised its treasury assets as a backstop for token prices, holders have no moral claim to share the treasury.

Many others who consider the contributions Gnosis has made to the industry ecosystem also do not agree with this proposal. Gnosis owns core infrastructure projects such as Safe, CoW Swap, Gnosis Pay, and Gnosis Chain.

Gnosis founder Sebastian Bürgel bluntly asked, when did the most respected ecosystem builders in the industry become targets for hedge funds? Nick Almond, head of the Jito ecosystem, directly labeled the proposal as blatant treasury dumping and escaping.

Anthony Leutenegger, representing the Aragon team, which was targeted by similar forces in 2023, took a more moderate and rational stance. He called on the industry to improve the procedural rights mechanism for token holders, in order to better coordinate incentives and resolve such disputes.

Previous RFV Targeting Cases

This group has previously initiated similar treasury arbitrage actions multiple times in 2023, leading to them being labeled as RFV plunderers in the industry, although the group does not recognize this term.

Projects targeted back then included Rook, FEI/Tribe, and Aragon, with Aragon ultimately being forced to adjust the use of treasury funds, repurposing them into an ecological donation support plan.

Just recently, the Beefy Finance token BIFI fell below its treasury net asset price in April, prompting the DAO to quickly launch a buyback mechanism to avoid being attacked by RFV forces.

Regarding the Gnosis incident, the proposer Wismerhill had previously admitted to having a deep appreciation for Gnosis DAO and had predicted that following the dismissal of KPK, Gnosis would make more commercially-driven decisions.

This vote will ultimately test whether GNO holders value short-term commercial arbitrage gains or long-term ecological building value more.