Gnosis DAO is considering a large-scale buyback proposal for its native GNO token. This proposal was submitted by Thanefield Capital. The main reason for this proposal is the underestimation of the current market capitalization of the native token, according to Thanefield Capital.
GNO token reacts to Thanefield Capital's proposal
The Gnosis project was founded in 2015 and is built on the Ethereum network. The main assumption of this project was to create a decentralized forecasting market based on smart contracts. Gnosis and its ecosystem have grown so much in recent years that the value of the native token currently in supply is underestimated. At least that's what Thanefield Capital says, proposing that Gnosis DAO allocate USD 30 million from its treasury to balance the price of the unvalued native token. This strategy is to be supported by the fact that Gnosis DAO is to have 1 million tokens that have not been included in the circulating supply.
This proposal appears to be gaining initial support among the project community. At the Gnosis DAO governance forum, as many as 12 out of 14 voters supported the repurchase of tokens. Gnosis co-founder Martin Köppelmann supported the proposal, stipulating that the token repurchase should be linked to a “development program”:
I am in favor of this proposal if it is combined with a development program in which the tokens acquired as part of the buyback will then be used to acquire more users.
A two-stage repurchase strategy that is expected to bring the expected results
If Thanefield Capital's proposal is approved, the company will begin implementing a special two-stage strategy. The first stage of the strategy is the so-called TWAP, assuming the allocation of USD 15 million for the purchase of tokens. This method uses a time-inflated average price technique over a six-month period.
The second approach provides for the allocation of another USD 15 million, but allows for the optimization of purchases depending on market conditions. It is worth adding that at the time of writing this article, the GNO exchange rate is USD 311.54. Information about the token repurchase plan temporarily pushed the token to the level of USD 320.
