Key Highlights
- GnosisDAO is immediately terminating its treasury management agreement with KPK with a strict 14-day period for a complete handover of all assets and documentation.
- The decision resulted from community discussions and an 88% vote, citing dissatisfaction with Karpatkey’s performance, cost, risk exposure, and alignment with DAO goals.
- Post-handover, the treasury will be consolidated into wstETH, sUSDS, and Gnosis Ecosystem tokens before a new strategy is defined.
GnosisDAO officially decided to dissolve its relationship with Karpatkey, its treasury management partner. The development comes right after a governance proposal the treasury sought to end the service agreement between the decentralized autonomous organization and the asset management firm passed.
The move now signals a shift in how the DAO deals with its financial resources and internal governance in terms of third-party vendors. According to the approved proposal, the immediate termination of Karpatkey’s treasury management services takes effect.
A full handover to GnosisDAO
The governance mandate calls for a strict 14-day transition, wherein Karpatkey must make a full handover. The latter includes detailed documentation of all current financial positions, strategies, and access controls.
The specifications of the proposal state that no further payments are to be made to Karpatkey, nor are any funds to be retained by them. All GnosisDAO assets currently under management must be returned to the direct control of the DAO and withdrawn from any Karpatkey-affiliated products, such as their Morpho vaults or other proprietary vaults.
To facilitate an orderly transfer, the proposal outlines specific procedures for handling assets. While the goal is a direct handover of positions, the DAO has authorized specific conversions for edge cases where a direct transfer is difficult.
In such instances, ETH-denominated positions may be converted to wstETH, while USD-denominated positions may be converted to sUSDS or sxDAI.
Implementation measures include the immediate revocation of all Safe signer permissions previously held by the Karpatkey team. Furthermore, all new treasury operations were ordered to cease immediately upon the passing of the proposal.
The deciding 88% community vote
The decision to part ways with Karpatkey was an outcome of the widespread community discussions that have taken place over recent weeks. Main areas of concern identified by the governance proposal that motivated the termination were related to treasury management performance, the overall service costs, exposure to risk, and general alignment of the partner with GnosisDAO’s objectives.
Karpatkey had served as the ecosystem’s treasury manager before. However, the stakeholders reviewed the value and efficiency brought about by the arrangement, which needed a formal separation. It has been reported that firing the treasury manager was supported, with close to 88% voting power supporting the move to make the operations leaner for the DAO.
Future plans after the termination
Once the assets have been returned, representatives of GnosisDAO would need to work on restructuring the composition of the treasury. It is proposed that all treasury assets be received and then immediately consolidated into sUSDS, wstETH, and Gnosis Ecosystem tokens. This consolidation will stabilize the portfolio, pending further deliberations by the DAO on its long-term treasury strategy.
The direct repercussions include the unwinding of all active DeFi positions documented during the transition. GnosisDAO, in essence, is resetting its asset management strategy by going into direct custody of the funds, thus resetting the strategy away from external delegation to a holding pattern of specified approved assets as future operational frameworks are put in place. This governance action marks the official close of Karpatkey’s engagement as treasury manager for GnosisDAO.
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