Proposal: SAFE distribution for users

The Safe (Formerly Gnosis Safe) has spun out of Gnosis. The process was started with GIP-29 of GnosisDAO and recently a strategic raise of funds was announced.

GIP-29 presented plans of launching a SAFE token. 5% of the total supply is allocated to reward users for their past contributions and usage. Of those 5%, half will be available immediately and the remaining half will be vesting linearly over 4 years.

This post will provide an overview of the proposed distribution of SAFE for users. We are looking for community feedback.

Goals

The distribution criteria should be set in order to achieve the following:

  • Decentralization: SAFE governance would benefit most if the token is widely distributed.
  • Reward usage: More active users should receive more tokens than less active ones
  • Reward past usage but prefer potential future active governance participants, i.e. accounts that care about the Safe.
  • Raise awareness for the Safe as a project and DAO
  • Recipients should get a “meaningful” amount, i.e. users should care about it and tx fees for claiming shouldn’t make it economically unwise to claim SAFE tokens allocated to them.
  • Ownership: Long term, we envision the Safe as a community-driven project. It is empowering to own a part of the product they use.

Distribution criteria

Brief glossary
  • An “action” is either a regular Safe tx or the number of “sub txs” in case of a multisend/batched tx.
  • “ETH stored over time” per address are calculated by summing up the ETH balance for every day, i.e. “10 ETH stored over time” could mean an address held 10 ETH for 1 day or 1 ETH for 10 days or 0.1 ETH for 100 days, etc.
How are SAFE allocations calculated?
  • 50M SAFE are distributed
  • Only consider Safes created before phase 2 of GIP-29 (=Feb 9, 2022)
  • Only consider Safes that have at least 2 actions OR 10 ETH stored over time, prior to GIP-29
  • Each Safe gets a minimum of 400 SAFE
  • Consider all official master copies (singletons) on Ethereum mainnet
    • 0x8942595A2dC5181Df0465AF0D7be08c8f23C93af (0.1.0)
    • 0xb6029EA3B2c51D09a50B53CA8012FeEB05bDa35A (1.0.0)
    • 0xaE32496491b53841efb51829d6f886387708F99B’ (1.1.0)
    • 0x34CfAC646f301356fAa8B21e94227e3583Fe3F5F (1.1.1)
    • 0x6851d6fdfafd08c0295c392436245e5bc78b0185 (1.2.0)
    • 0xd9db270c1b5e3bd161e8c8503c55ceabee709552 (1.3.0)
    • 0x3e5c63644e683549055b9be8653de26e0b4cd36e (1.3.0L2)
  • â…” of SAFE are distributed relative to their share of ETH spent on txs fees.
    • Smoothing function: x^(½) (Square root)
  • â…“ of SAFE are distributed relative to ETH stored over time on Safe.
    • Include wrapped ETH
    • Smoothing function: x^(â…“)
Why only consider Safes created before February 9, 2022?

Safe spun out of GnosisDAO via a DAO vote. On this day, the spin-off proposal moved to phase 2 of the GnosisDAO governance process, i.e. it was reasonable to assume that it would pass. We chose this date as the cut off date in order to prevent users from gaming the allocation and rather reward real users instead of airdrop hunters. The same restrictions applied to applicants of the Safe guardians program.

Why not consider any value stored per Safe? Why just ETH/WETH?

There are many kinds of assets stored in Safes: ETH, ERC20s, NFTs. It’s hard to include all of them and to set them into relation, for instance fetching a reasonable USD value for some NFTs is hard. The same is true for illiquid assets and Safes that control systems/protocols. ETH is something that everyone can align on since it is the base of the network. The total stored ETH was the main success indicator for the Safe project for a long time.

Why use ETH spent on tx fees rather than number of actions or USD spent?

Gas spend on txs is a good indicator on how valuable a txs was for the executor at the time of the tx, cf. Gasdrop. ETH prices spiked tremendously over the course of the last few years. The regular users in the early days would not be allocated much SAFE if USD value is taken into account.

Why only consider Ethereum mainnet?

Looking back, mainnet was by far the most important chain for the Safe. Individuals and teams moving significant funds into Safes on mainnet was key for its popularity and trust. Additionally, Safe governance will happen on mainnet initially.

With the Safe now becoming popular on sidechains and L2s, we would rather encourage users on those networks to consider creating a SafeDAO proposal for airdrops. There is the SafeDAO treasury (40% of the total SAFE supply, vested over 8 years) that could be considered for this.

SAFE User Allocations

Proposed allocations for users can be found in this sheet or as csv.

Insights on the allocations
  • Safes created before GIP-29: 45,025
    • 10,453 never made a single transaction.
  • Safes with allocated SAFE: 21,935
  • Maximum number of tokens allocated to a Safe: 129,339.85
  • Minimum number of tokens allocated to a Safe: 438.30
  • Average number of tokens allocated to a Safe: 2279.46
  • Median number of tokens allocated to a Safe: 1,325.99

Data sources

Dune queries
Helper scripts
19 Likes

This looks great overall, the only thing I would change is to allocate 2/3 for stored ETH overtime and do 1/3 for tx fees;

It makes more sense to me to reward/incentive the long term vault and therefore safety aspect of Gnosis a little more than a trading machine one.

In fact there is a good chance, in my opinion, that Safe with less transactions (likely multi-sig) were more properly used than those with high frequency transactions (likely single sig or two at most). Of course there is that middleground as well, combining safety and usage and that is why this allocation makes sense but 1/3 or 1/2 is what I would vote for.

Either way it will be a fine distribution thank you.

4 Likes

I heavily disagree with this proposal for 5 major reasons, and I will disclose my own biases first:
Impossible is a decentralized venture buidler and accelerator, and we work with many project teams across many chains - our own smart contracts exist on more than 7 EVM compatible chains.

  1. Truly decentralized organizations require multisigs to be present on multiple chains, and that gnosis safe has been one of the best ways for teams to securely do so across many chains. Not recognizing any of their activity on other chains is one of the worst ways to reward teams that were willing to go and expand operationally to new EVM chains, and opens the door for the chance to create a fair launch of SAFE clones on other chains that accurately view these users on other chains

  2. Many projects in the 2018 wave of ICOs saw a large amount of ETH held but did not properly manage their treasuries, and thus many of these projects failed to deliver on their roadmap due to a lack of room for their burn rate to be covered by their treasury. As a result, many teams in recent years have raised in stablecoins (never held any ETH), or decided to convert many of their proceeds to stablecoins. As a result, many of the prudent, long term teams building in this space would not have ETH even if they used a gnosis multisig on ETH mainnet. Filtering by a majority of ETH holdings would irresponsibly reward early ICO projects that raised a ton of ETH, rather than careful buidlers who held any nonWETH ERC20 in their gnosis multisigs. This is not the right way to incentivize those who are still building and using gnosis safe today, but rather potentially overweighting for OG gnosis wallets held at a time when the # of ETH acquired was at a lower cost.

  3. It is important to note that some people would try to game the system and create gnosis safes on cheaper chains, but I think that filtering for gnosis safes with min gas expenditures on other chains + also being created before there was an announcement of the gnosis safe dao and potential token plans, would be sufficient to filter away any sybil attacks.

  4. A mention of expenditure of gas to protect early users I believe is a fundamental mistake because for the longevity of gnosis safe, the fact of the matter is that a user who used a gnosis safe more recently is actually more valuable for the protocol than one that used the protocol 4 years ago. Someone who was willing to pay gas during peak defi summer is also probably going to keep using safes when fees are cheaper. I do believe that another nonETH denomination is a better metric for usage or willingness to continue using safes moving forward.

  5. Just because storing NFTs or other things are hard, doesn’t mean they shouldn’t be included, but setting aside 1/3rd for gas expenditures is also silly for the same reason - an NFT (say ERC721 or ERC1155) will cost more gas to interact with than a simple ERC20, and also even amongst ERC20s, gas varies (say, an algo stablecoin is maybe worth less than USDC, but that USDC might be cheaper to transfer, etc.) so that assets with potentially no dollar value might cost more to interact with than real useful assets.

I suggest that there should be further considerations before rushing to launch this token in the currently proposed manner.

14 Likes

how ridicule that you must have used ethereum chain and not gnosis chain to qualify, completely ridiculous

5 Likes

I think the highlight of this proposal is the dynamic SAFE parameters - tx fees and time-weighted value stored. This is an excellent approach.

However, the rest of the proposal fights against the strength of these parameters.

Rewarding mainnet safes exclusively seems brutal. I mostly agree with the third point @calchulus made: safes created before any reasonable expectation for airdrop would filter most sybil attackers (even then, I don’t think this filtering is necessary here - see further below).

The “meaningful amount” goal seems to rise from that mainnet-centric strategy, which is a self-inflicted problem. While Safe spun out from Gnosis, it still grew as Gnosis Safe. Why not use (and encourage use) of the ecosystem the same way Cowswap did? Remove the 400 minimum. Let the bigger safes claim on Ethereum, and have all the smaller safes (be it Ethereum, rollups or altchains) claim on Gnosischain.

Going further, once we forget any minimum amount, and determine airdrop amount solely on gas spent and time-weighted value stored, there’s hardly a downside to rewarding every Safe - before or after feb9 2022. A would-be Sybil attacker who made 100 Safes on a cheap altchain and did 2 transactions on each for a total of ~$20 spent in gas fees would get the same amount as a legitimate historical user who opened a Safe on Ethereum and did one transaction costing him ~$20 in gas. All things considered, legitimate users with a rich Safe history and ample funds should dwarf any Sybil attempt.

If nothing else, skipping Gnosischain users is a strong negative signal against taking chances on the Gnosis ecosystem. Indexing airdrop amount on the Safe ETH/dollar values and/or gas spent would likely result in a minimal decrease for the bigger participants anyway, as I’d wager the amounts involved are negligible. Gnosis Safes secure billions of TVL on mainnet, while the entire TVL of Gnosischain is ~$220M.

As stated, I think the plan would fall short of its first bullet point - “decentralize through wide distribution”.

And needlessly so!

The dynamic SAFE allocation parameters (tx fees and time-weighted value stored) are excellent equalizers. An airdrop solely based on these settings would be unopinionated, decentralized, reward usage, raise awareness and let every current Safe holder feel ownership.

6 Likes

Obviously anyone who didn’t qualify will probably be upset. I didn’t qualify but I’m not upset, I think it is a good start. A lot of the things you are proposing (minimum amount and early date) seem good ways to stop airdrop hunting. One of your goals was to reward past usage but prefer potential future active governance participants. The way you accomplished this appears to be if they used the product and had a financial stake its more likely they will participate in governance. Seems reasonable. Might I also suggest that Safe has an entire group of people who have a proven track record of involvement in governance and monetary stake in Safe that isn’t just through the use of the product alone. This would be everybody involved in Gnosis governance. The snapshot forum would have records of all the people who participated up and through the vote to allow Safe to break off and fund it. Seems some of these people if they weren’t active users of safe before February would be left behind. Just something to consider.

2 Likes

Choosing ETH over time is kind of not fair I think. since most multisig host control over contracts or funds that are not ETH based.

4 Likes

Those who receive it will be happy - those who don’t will complain.

That’s how an airdrop works. While I understand your frustration as a founder, the metrics don’t seem to justify an allocation to other networks.

Take Optimism as an example - at a total of 622 ETH (Safe on Optimism) held on safes, this is 0.037% of the total amount on Ethereum Mainnet (1,679,644 ETH)

This nominal amount is true for other networks - Mainnet seemed to drive most growth.

You point out holding ETH as a major qualifier:

It sounds like transactions (only 2) have an equal weight - this is just receiving assets twice or swapping out of that said ETH etc.

As a company who “own smart contracts exist on more than 7 EVM compatible chains,” I’m confident your organization will qualify for some of this distribution.

I’m grateful for your commitment and usage of the product .

2 Likes

a couple of thoughts on the proposal. Full disclosure: I’m an owner/co-signers of Safes that have deployed multiple proxies and use them actively for development. I will address a few points that have been already brought up:

  1. concerns for ETH as the only weighted factor

This is the one point I would amend for this proposal as a large number of development teams utilize stable coin to fund their treasury, not ETH. Although ETH balances maybe crucial to have for a regular multisig, it pales in comparison to be as critical as 1) stable coins holdings 2) native token within a treasury. 2) is of course impossible to quantify, which leaves stable coins as optimal shelling point for the distribution. My request for amendment would be to include both ETH, WETH and stable coins holdings over time

  1. concerns on picking Ethereum network users > other chains

Risk model for users on non-Ethereum chains is not comparable to the risk early users took by deploying assets through Safe (and prev: Gnosis Multisig) on Ethereum. I believe active users reward distribution should have causal relationship to a) risks incurred to the users of the early product b) how important the initial $$$ drives subsequent adoption. Let’s also be clear that, with the absence of the early adoption for the original Multisig on Ethereum- we would not have gotten here.

To give an example of what early risks looks like for the first few Safe users, note that the big Parity wallet hack would have been fresh in recent memory and that industry standards for teams would have been to use an institutional solution like custodial wallets.

transaction fees is another contributing factor on top of risks, really active users should at least expect amount quantifiable as kick back for usage on a higher gas cost L1

  1. Lack of incentives for future developments on other chains

I don’t think this is a good argument given that airdrops are rarely proven to drive the product adoption after the fact. Beyond the scope of this distribution, I think it’s a better fit for initiatives like Safe Guardians and subsequent ecosystem allocation to fund future application developments.

Ultimately, IMHO the the distribution criteria satisfies the established goals. My only request for change would be a point to consider stable coins held > time as a factor for weighted allocation.

6 Likes

Does this data include Safe Guardian’s part?

2 Likes

Since GnosisSafe spawned from gnosis, I think that people who committed to lock their GNO token for 1 year to support the project instead of staking should get an airdrop, but should be less than the early GnosisSafe users

3 Likes
  1. An initial distribution based on mainnet seems to focus on longer-term users, while the resources have been set up to allow the community to create proposals that incentivize L2s. As @tschubotz mentioned, there is 40% of SAFE supply in the SafeDAO treasury that can be allocated with proposals to these other L2 Safe chains.

  2. Including stablecoins is a valid point as the determined value is straightforward and many teams have held a large portion of reserves in stables learning from the '17/18 market cycle. A large amount of the NFT market seems manipulable. If NFTs were considered as part of the value it might make sense to choose an allow-list of top NFT collections based on a set of metrics. If there are oracles that can derive the value from multiple reliable exchanges, that could be used for price, or using OpenSea prices.

Major Ethereum staking tokens such as Rocket Pool’s $rETH and Lido’s $stETH also seem like important additions to the consideration of the airdrop. These staking protocols have provided key roles in moving Ethereum’s Beacon Chain forward.

3 Likes

It seems like a good idea to see a future proposal to reward Gnosis Chain users.

3 Likes

Is there a reason to not include users of this OGs set up GitHub - gnosis/MultiSigWallet: Allows multiple parties to agree on transactions before execution.?

3 Likes

It doesn’t seem so as the topic title is SAFE distribution for *users*.

It would be good to receive confirmation from the Gnosis team on this.

2 Likes

Gonna jump to some of the main concerns rather than address the whole proposal.

Adding an allocation based on eth value over time is fair to some extent. Those that might not deal with eth but hold a significant amount of value would fall through the cracks. If the purpose of this allocation is to reward trust based on the value held, perhaps a better method would be to reward activity. for example, the average time between transactions? average no. of transactions within a month?

The gas spent multiplier is a nice thing to have but it’s basically reimbursing operational costs that we were prepared to spend. It is however a good indicator to the above comment in order to calculate activity.

so, using eth balances to calculate a portion of allocations has its pros and cons. I feel like there are more cons and it should be reconsidered.

1 Like

Yes, this is only for the user distribution. Guardians will learn about their allocation at a later point.

4 Likes

Yep, also, there are two community treasuries that directly relate to GnosisDAO/Gnosis Chain with the 15% GnosisDAO allocation and the 5% joint treasury. The latter could exactly be used to support initiatives that benefit both projects (Safe and Gnosis Chain) such as an additional airdrop for Safe users on Gnosis Chain. This is really just the beginning of the distribution, I’ll expect much more to come once governance is set up.

3 Likes

For 2)

The issue is about where to exactly draw the line. @tschubotz s proposal limits to just ETH as this is the native asset. But if you start adding more it already opens pandoras box. If you add DAI, why not USDC and then USDT, but what about aDAI? or the DAI that is controlled by the SAFE but in a Uniswap LP position? People would always argue that the step to the next asset in line is marginal.

3 Likes

There should be airdrops for GNO holders, but this is a discussion to be had on forum.gnosis.io

5 Likes