GIP-108: Should GnosisDAO honor the original rewards for GnosisVIP before the distribution schedule was modified (this proposal does not reward additional nodes with the same withdrawal address)?

Executive Summary While GIP-106 aims to reinstate GnosisVIP rewards for nodes with the same withdrawal address, this proposal is different and aims to honor the higher rewards as originally announced. Due to challenges, the Builders Team delayed the distribution of rewards, to be after 6 months of validation. The Builders Team also reduced the rewards for the initial months. The original rewards can be reviewed here. The original rewards should be maintained because they were heavily promoted by Gnosis social media and PR, and induced validators to join in reliance on this announcement. This would maintain fairness and trust about the Gnosis brand.

Background A co-founder of Flashbots advocated for geographical decentralization (might not have motivated GnosisVIP but explains the importance of the program). Shortly after, Gnosis Builders (whose funding was approved in GIP-38) allocated 5 million USD for GnosisVIP, a program aimed at increasing the number and diversity of validators. There was no term reserving the right to modify the rewards at any time. The announcement, referring to 388 mGNO for 6 months, was promoted by Gnosis social media and PR including on Cointelegraph.

In the original post, payments were expected within 90 days of each month of validation. Due to technical or logistical challenges, the Builders Team delayed the distribution of rewards, to be after 6 months of validation. The Builders Team also reduced the rewards for the initial months.

Specification This proposal aims to restore the original rewards for GnosisVIP before the distribution schedule was modified. Originally, the monthly breakdown added up to 388 mGNO (38+48+58+68+78+98). The cumulative reward for 6 months amounted to 12.125 GNO (388/32).

In June 2024, validators for 6 months received 3 GNO, and validators for 9 months received a total of 7 GNO. This proposal would disburse the difference with 12.125 GNO. This approach would maintain trust and predictability in contractual relations with the Gnosis brand.

According to the Google Sheet in the sunsetting announcement, around 29* validators are affected by the reduced rewards. As calculated in the Budget, this would amount to 139.625 GNO to 29 validators.

*Nodes whose rewards were reduced due to having the same withdrawal address are not included in this GIP for simplicity and for avoidance of a conflict with GIP-106. These operators can advocate for rewards outside my proposal.

Rationale Changing the reward amounts retroactively would undermine trust, discourage future relations with Gnosis entities, and breach the offered contract.

Honoring the contract: As LegalVision UK puts it, “In a unilateral contract, legal relations between the offeror and offeree form when the offeree begins to try to complete the specified act as part of the contract. As a result, if you are the offeror, you will have a binding contract and will not be able to rescind your offer.” The offer of 388 mGNO was seen by over 4000 on Cointelegraph, and the bulk of interactions was with Gnosis Builders’ first announcement. It would be unfair to rescind this offer after operators began getting hardware / setting up validators.

Not all validators were given the chance to validate for 12 months for full rewards: The program was closed without equal opportunity to complete 12 months of validation. April 19, 2024 was set as the final deadline of Gnosis VIP. That means all validators would have needed to join as soon as the announcement came out in 2023 to validate for 12 months. This is contrary to the blog post allowing nodes to be “starting after April 19, 2023” and the announced intention “to further diversify the network to have validators in at least 100 countries by the end of the year”. It suggests that nodes had at least until the end of 2023 to start validating as long as they were within the first 10 in an eligible country. It implies it would take until late 2024 to give operators a fair opportunity for performance that the offer called for. Since the modified reward schedule calling for 12 months of validation was made practically impossible to perform on time for nodes not joining quickly but still joining in 2023 as intended by Gnosis Builders, at least the original 12.125 GNO that were announced for 6 months of validation should be honored.

Personally, I’ve also been asking for clarity on the reward plans since November 2023 when my hardware broke, but was never told I needed to find a way to continue from 6 to 12 months (read my Personal Story below). Neither did I receive the rewards that were promised month-to-month when I joined on May 6, 2023, that could have been reinvested in new hardware.

The DAO had indirectly approved the initial program and now directly holds GnosisVIP participant funds: The Builders initiative was approved in GIP-38 and Builders returned their funds; there is a portion of these funds that had been promised to GnosisVIP participants when announcing GnosisVIP. Luckily, 139.625 GNO is small compared to the 5 million USD that Gnosis Builders had allocated to the program.

Budget My methodology was forking the reward sheet as of July 9, 2024, adding an “Affected Reward” column calculating the difference between 12.125 GNO and the amount for those nodes paid for 6 or 9 months. The total sum of this column is 139.625 GNO.

Nodes having already received 14 GNO are not impacted. Nodes whose rewards were reduced due to having the same withdrawal address are not in the scope of this GIP.

The following would need to be distributed:

Personal Story As I’ve posted on Discord in November 2023, I experienced a hardware failure after 6 months in the program after joining on May 6, 2023. Although I advocated to harmonize the initial announcement with the reward change to not make something akin to a “rug” of the initial announcement, I have not received a response. I was never told that the original program that I relied on would not be honored unless I repaired my hardware and came back. Anyway, if this proposal passes, I will purchase new hardware and add a LatAm node again.

Conclusion By honoring the original rewards, we can ensure that all participants are treated equitably and avoid reputational risk for the Gnosis ecosystem.