Gnosis Price Surges Amid Thanefield Capital Buyback Proposal

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Gnosis (GNO) DAO, a cryptocurrency that aims to provide a decentralized prediction market platform is currently experiencing a positive trend with a 3.64% increase in price due to a significant token buyback proposal.

The proposal was presented by Thanefield Capital, a cryptocurrency fund that holds a vested interest in Gnosis (GNO) tokens. 

The proposal suggests the DAO use $30 million from its treasury over a span of six months to align the market value of GNO with its intrinsic book value. This aims to optimize the token’s value and strengthen its market position.

Gnosis: Reason for this buyback proposal 

Thanefield Capital believes that the current market capitalization of GNO, based on its circulating supply, is undervalued. 

A comparison between the assets held by Gnosis DAO was made which includes $630 million in non-GNO liquid assets and $100 million in venture capital investments, totaling $730 million. In contrast, the circulating supply of Gnosis tokens is 1.53 million GNO, valued at approximately $424 million, as per Thanefield’s statement. 

It was also pointed out that while this valuation is significantly lower than what is reported on platforms like CoinGecko, it is arguable that 1 million tokens are owned by Gnosis DAO and should be excluded from the circulating supply calculation.

Gnosis buyback proposal: Community supports the notion

The initial response to the proposal has been positive within the community, with 12 out of 14 voters on the governance forum expressing their support thus far. Martin Köppelmann, one of the co-founders of Gnosis, also endorsed the proposal. However, he emphasized that the token buyback should be accompanied by a “growth program.” 

Köppelmann believes that the GNO tokens acquired through the buyback should be strategically utilized to attract more users, ensuring a robust growth trajectory for the platform.

In a similar vein, Ripple Labs, a blockchain payment protocol, announced a $285 million share buyback from early investors which in return boosted its valuation and reflected confidence in its growth and commitment to shareholder value also. This decision was after having a scam scare from the XRP’s buyback proposal initiated by Jimmy Vallee, the MD of Valhill Capital. 

In 2022, Nexo, a crypto exchange platform also trade the buyback lane as it allocated an extra $ 50 million for conducting buybacks of its NEXO token on the open market. 

Possible Outcome of the buyback proposal 

If Thanefield’s proposal gets the green light, the execution plan for the proposed buyback program will consist of two different strategies. 

The first strategy is TWAP, where $15 million will be allocated to buy GNO tokens and it will use a time-weighted average price technique over six months.

According to the proposal, the six-month TWAP will create a daily buy pressure of approximately $83,333 for GNO.

The second approach is discretionary and sets aside $15 million, allowing for optimization of purchases based on market conditions. The buyback program will be managed by Karpatkey, an on-chain asset management project.

Gnosis DAO oversees Gnosis Chain, a parallel sidechain to Ethereum, and CoW Protocol, a decentralized exchange.  Additionally, Safe, the popular multisig provider on Ethereum, spun off into its own DAO after branching off from Gnosis.

Since the proposal, Gnosis’ price rose by 20%, reaching a peak of $320, and is currently trading around $308 according to Coinmarketcap.

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