Gnosis price rises 20% following $30 million token buyback proposal from Thanefield Capital

Gnosis DAO is discussing a proposal for a large-scale buyback of its native token.

This proposal was put forward by Thanefield Capital — a crypto fund with a vested interest in the Gnosis (GNO) token. It is requesting that the DAO deploys $30 million from its treasury over a six-month period, claiming it will realign the market value of GNO with its intrinsic book value.

Thanefield Capital asserted that the current market capitalization of GNO, based on its circulating supply, is undervalued. It contrasted this with Gnosis DAO’s assets, which include $630 million in non-GNO liquid assets and $100 million in venture capital investments, totaling $730 million. In comparison, the circulating supply of Gnosis tokens is 1.53 million GNO, valued at about $424 million, it stated. While this is much lower than what's reported on sites like CoinGecko, the fund asserted that 1 million tokens are owned by Gnosis DAO and therefore counted them outside of the circulating supply.

The proposal appears to have gained preliminary support from community members, with 12 out of 14 voters on the governance forum favoring it so far. Gnosis co-founder Martin Köppelmann endorsed the proposal, stipulating that the token buyback should be tied to a "growth program."

"I am in favor of this proposal if it is connected to a growth program where the GNO acquired in the buy back are consequently used to attract more user," Köppelmann stated in response.

Proposed buybacks involve a two-fold strategy

If Thanefield's proposal is approved, the execution strategy for the proposed buyback program will consist of two approaches. The first is the TWAP strategy — involving an allocation of $15 million to purchase GNO tokens.

This method utilizes a time-weighted average price technique over a period of six months. According to the proposal, the six-month-long TWAP will result in an estimated $83,333 daily buy pressure for GNO. The second approach is discretionary and allocates $15 million but allows for optimization of purchases based on market conditions. The buyback will be managed by karpatkey, an on-chain asset management project.

Gnosis DAO oversees the Gnosis Chain, a sidechain running parallel to Ethereum, and the CoW Protocol, a decentralized exchange. Safe — the most widely used multisig provider on Ethereum — also spun off from Gnosis into its own DAO.

Since the proposal went live, the price of Gnosis rose by as much as 20%, peaking at $320, according to The Block's price page. The token is currently changing hands at around $308.