[ARFC] karpatkey as GHO Growth Service Provider

Governance
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Title: [ARFC] karpatkey GHO Growth Service Provider

Author: karpatkey

Date: 2024-12-15

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Summary

The current ARFC proposes appointing karpatkey as a service provider dedicated to drive the growth of GHO for the following 6 months, with an initial focus on opportunities within the Gnosis Chain while also expanding efforts to other chains.

Motivation

Over the past 12 months, karpatkey has been pleased to have supported the AaveDAO in improving treasury management practices and GHO adoption (see Phase 1 and Phase 2 for more details). These efforts have been a significant success, and will continue, with the deployment of the Finance Steward upcoming features. That said, by focusing on increasing GHO’s adoption, we believe karpatkey can provide more value to the Aave ecosystem.

The stablecoin ecosystem is one of the most dynamic and competitive sectors in the DeFi landscape, and the accelerating adoption of GHO represents a unique opportunity for Aave DAO to solidify its position as a leader in this space. Since its deployment over a year ago, GHO achieved a notable milestone of a 180M supply across mainnet and Arbitrum, market depth in most reputable DEXes with total liquidity ranging between $30M and $50M. This success is a testament to the strength of Aave’s products, user base and brand.

Total GHO Supply
Total GHO Supply1816×728 44.6 KB

Total GHO DEX Liquidity
Total GHO DEX Liquidity2048×787 127 KB

Source: GHO Dashboard

While GHO’s initial growth has been remarkable, the stablecoin market is evolving rapidly. The demand for reliable, decentralised stablecoins continues to grow, and GHO is well-positioned to capture this market—provided we continue to expand its utility, adoption, and ecosystem integrations proactively.

karpatkey has the tools and resources to capitalise on the range of opportunities GHO presents. With a proven track record in DeFi innovation and strong partnerships with other DAOs, we are excited to present our new 6-month proposal to Aave DAO, focused on the areas where we can contribute most.

To drive proactive growth and expansion of GHO across multiple blockchains, we are proposing a phased mandate that includes tailored strategies for each ecosystem, with the initial phase prioritizing the deployment and adoption of GHO on the Gnosis Chain. With an Aave instance holding $100M, Gnosis Chain currently has a total value locked of $410M and a thriving environment of stablecoins, which includes Gnosis Pay, Monerium’s e-money EURe and other RWAs. We plan to focus primarily on opportunities where both AaveDAO and GnosisDAO can mutually benefit from a vibrant GHO ecosystem on Gnosis Chain, taking advantage of karpatkey’s unique position supporting both the DeFi ecosystems of both DAOs.

Specification

During this first phase, our objectives will include:

  • Expanding GHO’s supply and utility through strategic integrations across the blockchains where GHO is deployed, and those where it will be deployed next, establishing GHO as a stablecoin of choice while maintaining its peg stability. karpatkey will continue to support the GHO stewards and the ALC to make this possible.
  • The deployment of GHO on Gnosis Chain, in collaboration with other Aave Service Providers, to optimise the Gnosis Chain Aave instance for GHO’s adoption and success.
  • Introducing an sGHO vault on Gnosis Chain, building on the success of sDAI. This vault, to be developed in collaboration with @ACI, will provide a risk-minimized yield alternative that can be used as collateral for enhanced capital efficiency. The yield will be sourced through the successful Merit program, and will be amplified on Gnosis Chain by allocating incentives to staked liquidity only, further establishing GHO as a superior savings vehicle.
  • Drive a successful launch by establishing a 5M Aave treasury under non-custodial management infrastructure powered by Safe and Zodiac Module technology. This infrastructure, developed by karpatkey and successfully utilized in our contributions to GnosisDAO, ENS, Balancer, and Nexus, will initially be funded with USDC. The treasury will support market-making activities for GHO on Gnosis Chain to seed market liquidity and integrations.
  • Manage the integrations of GHO in Gnosis Chain with key DeFi protocols. Particularly, we will explore optimal lending-market parameters and the value proposition of the EURe/GHO pair, maximizing the value of Gnosis Chain’s long-term foreign exchange use-cases.

Budget and duration

After a successful vote, this proposal will be funded with the following stream:

  • Budget 250K GHO over 180 days.
  • Address: 0x58e6c7ab55aa9012eacca16d1ed4c15795669e1c

We propose that the stream be funded with GHO from the Lido market to reduce Aave’s opportunity cost.

Disclaimer

karpatkey is also a service provider for Gnosis DAO.

Next Steps

After sufficient time for discussion and feedback on this proposal in the forum, we will escalate it to an ARFC Snapshot vote.

If the ARFC snapshot outcome is YAE, an AIP vote will be published for final confirmation and enforcement of the proposal.

Copyright

Copyright and related rights waived via CC0.

5 Likes
2

Thank you for this proposal.
I have a few questions.

  • can you confirm fixed KPI for GHOs growth? What goals do you have in mind and what are you going to do if they won’t be reached?
  • when and where do you plan to keep the DAO updated? Monthly updates would make sense given the 6 month engagement.
  • how are you going to use those 5m?
  • why exactly 5m?
  • Into what products could GHO established within the Gnosis ecosystem?
    I would love to use GHO in combination with my Gnosis Pay card.

It would be great to have a rough time line for the proposed specifications and their implementations within those 6 month.
Depending on the information I will vote accordingly.

3 Likes
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Thanks for your questions! Here are our answers to each topic:

  • A great part of this first engagement phase is building all the relevant infrastructure to enable GHO on GC. The success metric here is GHO deployed, with the sGHO vault active.
  • We believe that reports should be meaningful, detailing the initiative’s evolution or when there is a substantial topic to announce as we did in our previous mandate (e.g. a GHO steward update)
  • The 5 million will be used to support market-making activities for GHO Gnosis Chain and to seed market liquidity and integrations.
  • This amount is evaluated as sufficient to boostrap GHO’s liquidity within GC.
  • In this first phase, our focus is to create a healthy EURe/GHO pair that could be used to enable future integration with payment methods within GC.
1 Like
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A Snapshot vote has been created, and voting begins tomorrow.

We encourage everyone to participate and thank you in advance for your engagement!

2 Likes
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Hi @kpk, thank you so much for this proposal! We’re excited about the potential for building up GHO on Gnosis Chain and optimising the Gnosis Chain Aave instance through your dedicated efforts. The sGHO vault sounds like a great idea as well.

We had a couple of questions about elements of the proposal:

  1. Re. the KPIs, how would you be able to demonstrate Karpatkey’s contribution within the overall growth of GHO given that there are multiple service providers working on this endeavour?
  2. On the 5M POL funds, we see the need and think this makes a lot of sense. However, given that this proposal focuses on GHO and the work you will do on Gnosis Chain, do you think it makes more sense to detach the proposals? We can then discuss in greater detail your plans for enabling the market making activities for GHO on Gnosis Chain.

Excited about the potential for the proposal and your continued engagement with Aave!

2 Likes
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Hello @sid_areta, thanks for your questions, and here are the answers to them:

  1. GHO supply will always depend on the efforts of multiple service providers, as this is essential for the DAO’s success. As part of our phased approach, the impact karpatkey will have on it will be easier to measure in Gnosis Chain than in other networks, though we will work to expand GHO in all of them and report those initiatives and their impact.
  2. The funds mentioned are not included as a budget request in this proposal, even though they are outlined as part of the steps to achieve the objectives. When GHO is deployed on Gnosis Chain, we plan to submit a more detailed proposal addressing these plans and their implications.
2 Likes
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This topic was automatically closed 30 days after the last reply. New replies are no longer allowed.

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Hello KPK,

do you have any updates for the DAO regarding all the initiatives outlined in this proposal? It has been two months now and unfortunately I haven’t seen a thread regarding updates or current work overall. Would be nice to keep the DAO updated.

Thanks

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Hello @EzR3aL,
Thank you for your follow-up!

Over the past two months, we’ve been actively engaging with BGD, Aave Labs, and other service providers to advance our initiatives. In the coming days, we’ll present the proposal to deploy GHO on the Gnosis Chain, along with a detailed post on the sGHO concept.

We plan to use this thread for regular updates so the entire DAO can track our progress.

Thanks for your continued interest and support!

1 Like
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March 11th update: We published Develop sGHO: A Yield-Bearing GHO Vault for Multi-Chain Integration, where we present the technical information about the sGHO vault.

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March 13th update: We published [ARFC] Launch GHO on Gnosis Chainn, one of the initiatives laid down on the current mandate.

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As the service mandate granted to kpk in December 2024 has now formally concluded, we want to share a quick update on the current status of our deliverables since our last report, and what to expect going forward.

GHO Deployment on Gnosis Chain

All smart contracts have been deployed on Gnosis Chain per Aave’s standards, and the technical implementation is now complete. Other Service Providers have reviewed the GHO deployment PR, which is ready to be merged and is expected to go live in the next few days.

This is the first GHO deployment led outside Aave Labs, setting an important precedent for broader ecosystem contributions. As a result, the initiative required a more extensive diligence process across stakeholders, alongside the DAO’s parallel priorities for GHO on other chains. The PR for GHO launch in Gnosis Chain can be found here.

To support the growth of GHO in GC, we are finalising the details of an updated GHO market making proposal, incorporating feedback and additional components suggested by the community. The proposal aims for a phased capital deployment to support the GHO launch.

Next steps:

  • Successful AIP for GHO launch deployment
  • Finalise and publish the market making proposal

sGHO Deployment

Substantial adjustments were made to the sGHO design following a round of feedback from BGD. The smart contracts have been restructured for greater modularity, upgradeability, and alignment with Aave’s production standards. These changes were explained in detail here.

The previous iteration was completed and tested internally, and the latest version has been built to incorporate all requested changes. These are the Github links for both versions:

:link: Original sGHO Contracts

:link: Revised sGHO Contracts - latest version

These changes will result in a more secure, efficient and future-proof staking mechanism for GHO.

Next steps:

  • Gather and incorporate feedback from final reviews from Aave Labs and relevant reviewers
  • Proceed with sGHO deployment once the review is complete

Communication Moving Forward

As we enter a delivery-heavy phase—including proposal submissions, deployments, and launch activities—we will increase the frequency of updates to keep the DAO fully informed of progress.

Importantly, no new funding will be required to deliver the milestones mentioned above. We remain committed to transparency, aligned execution, and ongoing coordination with other service providers to fulfil our GHO growth mandate.

2 Likes
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Since our last message, we’d like to share two brief updates:

  • GHO Deployment: The pull request for the GHO launch on Gnosis Chain is still under review by service providers. You can follow progress here.
  • sGHO Development: The revised sGHO contracts have been submitted for another round of review. The latest version is available here.

We’ll continue to provide timely updates as these milestones advance.

2 Likes