LlamaRisk supports the onboarding of osGNO to the Aave V3 Gnosis Instance. The asset presents limited risks to the protocol, primarily from concentrated DEX liquidity, an inactive bug bounty program, and the absence of a timelock on contract upgrades. Nearly all osGNO liquidity on Gnosis resides in the Balancer osGNO/GNO-BPT pool, with the majority of liquidity provided by a single entity. This concentration introduces the risk of a liquidity crunch if the LP or counterparty withdraws, potentially impairing liquidations and increasing the risk of bad debt.
Additionally, osGNO relies on an off-chain Oracle Network composed of 11 elected participants to manage validator operations. While the StakeWise team asserts that Oracle processes are fully automated without manual intervention, this off-chain dependency still constitutes an operational risk. Nevertheless, osGNO is an overcollateralized LST with built-in slashing protection via excess GNO backing, which helps mitigate validator-related losses. Despite the outlined concerns, osGNO demonstrates low overall market risk.
Collateral Risk Assessment
1. Asset Fundamental Characteristics
1.1 Asset
osGNO is a liquid staking token for GNO on Gnosis, introduced by StakeWise and deployed at the address 0xF490c80aAE5f2616d3e3BDa2483E30C4CB21d1A0. It represents GNO staked in StakeWise Vaults and is overcollateralized to provide a buffer against slashing risks, unlike traditional LSTs that maintain a 1:1 backing with the underlying token.
As of May 15, 2025, osGNO has a circulating supply of 29,529 on Gnosis, with a market capitalization of $4.23M. The token was deployed on July 3, 2024, and offers 6.9% APY currently.
1.2 Architecture
The main components of the StakeWise protocol are Vaults, osGNO token, and Oracles. osGNO is an ERC-20 token that accrues GNO staking rewards over time and is fully backed by staked GNO in validators managed by Vaults. osGNO is redeemable for GNO as long as Vault’s collateral remains healthy. Vaults are permissionless, non-custodial, and isolated staking pools interacting with Gnosis nodes to enable staking on customizable terms. To ensure secure and decentralized operations, an off-chain Oracle network is employed. These Oracles do not have custody over funds but are responsible for registering validators, calculating rewards, and updating the blockchain with validator-related events such as entries and exits.
As of now, a total of 153.4K GNO has been staked through StakeWise by 568 participants. The protocol charges a 5% fee on the staking rewards earned through osGNO, which is collected by the StakeWise DAO Treasury Multisig.
Source: Top GNO Staking Vaults, StakeWise, May 15, 2025
Minting
osGNO can be minted permissionlessly by users who stake GNO in Vaults. Each token minted must be backed by staked GNO in active validators. The amount of osGNO a user can mint depends on the value of their stake and the excess backing threshold determined by the DAO. Most Vaults operate at a 90% LTV ratio, meaning a staker can mint osGNO worth up to 90% of their deposited GNO. However, this threshold can be increased to 99.95% for certain Vaults if the operator meets specific requirements, i.e., locking a 1M SWISE bond in a DAO-controlled address. These Vaults, once approved, allow users to mint osGNO almost equal to the full value of their staked GNO. The over-collateralization in 90% LTV Vaults provides a safety margin in case of slashing or other validator losses, ensuring osGNO remains fully backed. In contrast, the 99.95% LTV Vaults rely on the SWISE bond for risk mitigation rather than excess GNO.
Burning
To maintain protocol health, StakeWise continuously monitors the ratio of minted osGNO to the value of the underlying staked GNO, a metric known as position health. For 90% of LTV Vaults, this health is categorized as Healthy (below 90%), Moderate (90–91%), Risky (91–92%), and Unhealthy (above 92%). When a position crosses the 91.5% redemption threshold, anyone can initiate a partial burn of the user’s osGNO to return the position to a healthy level. In 99.95% LTV Vaults, user positions are always considered healthy because the osGNO annual yield aligns with the lowest-yielding 99.9% LTV Vault, thereby avoiding the need for forced burns. To fully unstake from any Vault, a user must burn the entire amount of osGNO. Burning only a portion of it allows for only partial withdrawal, ensuring the Vault maintains adequate backing.
Redemption
When a user initiates unstaking, the protocol attempts to fulfill the request using any unbonded GNO available in the Vault. Unbonded GNO refers to amounts less than 1 GNO from deposits or rewards in the Vault that cannot be staked and, therefore, do not earn rewards. If the unbonded balance is insufficient, the protocol exits validators to release the necessary amount of GNO. This process introduces a delay based on the current length of the exit queue on the Beacon Chain. Users stop earning staking rewards once they enter the queue, even though they may not have received their GNO yet. Importantly, redemptions incur no fees and have no negative economic impact on other Vault participants.
1.3 Tokenomics
The total supply of osGNO is not fixed, and users can permissionlessly mint it against any Gnosis Chain node. 280 unique addresses hold osGNO on Gnosis.
1.3.1 Token Holder Concentration
Source: osGNO Top 100 Token Holders, GnosisScan, May 15, 2025
The top 5 holders of osGNO are:
The top 10 holders collectively own 63.25% of osGNO’s total supply.
2. Market Risk
2.1 Liquidity
Source: osGNO/GNO Swap Liquidity, DeFiLlama, May 15, 2025
Users can swap osGNO worth up to $1.32M (9118 osGNO) for GNO within a slippage of 10%.
2.1.1 Liquidity Venue Concentration
Source: osGNO Liquidity Pools on Gnosis, GeckoTerminal, May 15, 2025
Most osGNO liquidity on Gnosis is held within the Balancer V2 osGNO/GNO-BPT ($2.45M TVL) pool.
2.1.2 DEX LP Concentration
The liquidity of osGNO in the Balancer osGNO/GNO-BPT is highly concentrated among a few users. 68.94% of the pool’s liquidity is supplied by a 3/10 Safe Multisig. The remainder of the liquidity is supplied by Aura Finance.
2.2 Volatility
Source: osGNO/GNO Secondary Market Rate, GeckoTerminal, May 15, 2025
This year, osGNO’s secondary market price has closely tracked its exchange rate, showing no significant deviations. Between October and December 2024, it traded at a premium. However, as market liquidity improved, the price quickly reverted to the correct exchange rate and has remained stable with minimal volatility.
2.3 Exchanges
osGNO is exclusively traded on DEXs and is not currently listed on any centralized exchange.
2.4 Growth
Source: osGNO Circulating Supply on Gnosis, Dune, May 15, 2025
The circulating supply of osGNO on Gnosis has steadily increased since its deployment last year. Year-to-date, it has grown by approximately 58%, reaching a current total of 29,529 osGNO.
3. Technological Risk
3.1 Smart Contract Risk
StakeWise V3’s OsToken contract handles the core logic for osGNO token. These contracts have undergone independent audits by multiple third-party security firms, and the findings were as follows:
- Sigma Prime (September 2024): 3 low and 1 informational
- Sigma Prime (June 2024): 1 critical, 2 medium, 5 low, and 4 informational
- Sigma Prime (August 2023): 2 critical, 5 high, 1 medium, 3 low, and 10 informational
- Halborn (July 2023): 1 medium and 2 low
- Halborn (April 2023): 1 high and 3 low
All of the issues were either resolved or acknowledged by the StakeWise team.
3.2 Bug Bounty Program
StakeWise does not offer a bug bounty program for its Gnosis Chain smart contracts. Its active $200K Immunefi bug bounty program covers only the Ethereum contracts.
3.3 Price Feed Risk
Chainlink has a GNO/USD price feed live on Gnosis Chain Mainnet. It can be used with StakeWise’s internal PriceFeed contract’s osGNO/GNO exchange rate to price osGNO on Aave V3 Gnosis markets.
The PriceFeed contract reflects the fair osGNO exchange rate by calling the getRate function. This data is also used for internal vault and token operations by OsTokenVaultController.
3.4 Dependency Risk
Off-chain Oracles
StakeWise V3 relies on an off-chain component called Oracles to fetch staking reward data from the Beacon Chain and to trigger validator registration and exit processes. These Oracles must remain highly available and sufficiently decentralized to ensure seamless operation. To this end, the StakeWise DAO has elected 11 participants to perform oracle duties, with a 7/11 threshold required for consensus. The current oracle network participants on Gnosis include Chorus One and Stake.fish, Telekom, Finoa Consensus Services, Bitfly, SenseiNode, Gateway.fm, the Gnosis Chain team, Axol.io, DSRV, and the StakeWise development team. Oracle operations are fully automated using Oracle software developed by the StakeWise team, with no manual intervention required.
4. Counterparty Risk
4.1 Governance and Regulatory Risk
StakeWise’s Terms of Service, read together with the osGNO User Agreement, lay down the contractual architecture that governs the staking of GNO tokens through the StakeWise protocol.
Under these documents, osGNO is a freely transferable ERC-20 “cryptographic receipt” token that mirrors the holder’s proprietary interest in the staked GNO. The possession of osGNO evidences an immediate entitlement to the underlying principal and any network-generated rewards, subject only to a deduction for slashing events. Because the token is divisible and may be conveyed inter vivos without restriction, any assignment of osGNO automatically passes legal and beneficial ownership of the equivalent quantity of staked GNO to the transferee.
StakeWise, for its part, is at pains to describe its role in strictly technical terms, expressly disavowing any characterization as broker, dealer, exchange, investment adviser, custodian, or other regulated financial intermediary. The contractual language is unambiguous: holders of osGNO remain the sole legal and beneficial owners of the related staked assets. StakeWise undertakes no fiduciary or custodial duties beyond the provision of validator-operation services.
Risk allocation is similarly explicit. All economic and operational hazards—including the imposition of slashing penalties by the Gnosis Chain—are contractually borne by the user. Should a penalty be levied, each unit of osGNO will correspondingly redeem for a proportionately diminished amount of GNO, thereby passing the entire downside to the token holder in real-time.
Eligibility provisions reinforce the compliance posture of the protocol. A user must have reached the age of majority in the relevant jurisdiction—never less than eighteen years—and must not be physically present in or ordinarily resident within any territory subject to comprehensive sanctions, including but not limited to Belarus, Cuba, the Democratic Republic of Congo, Iran, North Korea, Syria, or any other jurisdiction listed in the Terms of Service. Moreover, an applicant must not appear on the U.S. Department of the Treasury’s OFAC sanctions lists or the denied persons, entity, or unverified lists maintained by the Bureau of Industry and Security and must affirmatively warrant the absence of any such designation before interacting with the protocol.
Finally, several substantive provisions underscore osGNO’s nature as a pure receipt token. The agreements make clear that osGNO confers direct title to identifiable staked GNO, not a pro-rata share in a collective investment enterprise. They provide that the token may be transferred to any ERC-20-compatible wallet on the Gnosis Chain, with every transfer affecting a concomitant transfer of the economic benefits and burdens attached to the underlying stake. They confirm that each token is fractionable, permitting granular allocation of ownership. These clauses ensure a seamless pass-through of rewards and penalties, preserving the one-to-one correspondence between the receipt token and the staked asset it represents.
The juridical status of the osGNO receipt-token architecture remains largely untested before courts in any major forum, and its ultimate characterization is likely to pivot on the specific statutory and case-law matrix of each jurisdiction.
Creative Tech Free Zone Co. DBA “StakeWise” —has been incorporated in the United Arab Emirates; however, the public record does not specify the particular free-zone authority or on-shore regulator responsible for its licensing and prudential oversight. Without clarity on whether the company falls under, for example, the Dubai Multi Commodities Centre, the Abu Dhabi Global Market, the Dubai International Financial Centre, or another economic zone, it is impossible to map with precision the statutory provisions, rulebooks, and supervisory expectations governing its conduct of business.
The UAE has not promulgated a uniform statute devoted to staking services. Regulatory competence is fragmented among multiple federal and emirate-level bodies—each with its rulebook, sandbox guidance, and licensing taxonomy—so the applicable legal regime turns on the geographic locus of incorporation or service delivery.
Pending receipt of documentary evidence from the StakeWise team—such as constitutional documents, regulatory licenses, exemptions, or no-action assurances—the working assumption must be that the protocol’s non-custodial design, standing alone, does not appear to trigger an extant licensing requirement under current UAE laws.
4.2 Access Control Risk
4.2.1 Contract Modification Options
Here are the controlling wallets:
- Multisig A: 4/7 Safe multisig, owner of most contracts listed in architecture and also acts as DAO treasury that collects osGNO fees.
- Multisig B: 1/2 Safe multisig, admin of the genesis vault.
The osGNO architecture is powered by the following contracts:
4.2.2 Timelock Duration and Function
No timelock is configured on upgrades for any of the contracts mentioned above.
4.2.3 Multisig Threshold / Signer identity
All the major contracts in osGNO architecture are governed by the Multisig A (a 4/7 Safe), which is the StakeWise DAO Treasury. The current elected committee members are:
Note: This assessment follows the LLR-Aave Framework, a comprehensive methodology for asset onboarding and parameterization in Aave V3. This framework is continuously updated and available here.
We recommend pricing osGNO on Aave using StakeWise’s internal osGNO/GNO exchange rate in combination with Chainlink’s GNO/USD price feed along with the CAPO configurations suggested by @ChaosLabs to price the asset safely for the Aave market.
This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.
