GIP-110: Should the Gnosis DAO create and fund a Gnosis Pay rewards program with 10k GNO?

Summary

This proposal aims to create a cashback program for Gnosis Pay, benefiting GNO holders. The program will feature five tiers of cashback rewards, ranging from 1% to 4% based on the amount of GNO deposited in Gnosis Pay. An extra 1% (1pp) will be awarded to Gnosis Pay OG NFT holders. Rewards will be airdropped weekly to users ~7 days after their transactions, calculated based on the minimum GNO balance held during the week the payment was made. The rewards, measured in the currency of the payment, will be distributed in GNO using the Gnosis Chain GNO/USD, EUR/USD or GBP/USD Chainlink (or Chronicle for GBP) price feed at the time of distribution of the reward. A maximum of EUR 20,000, USD 22,000, or GBP 18,000 will be eligible to accrue rewards per month for every user.

Rationale

After last year's outstanding growth, Gnosis Chain has stagnated, mainly due to the substantial incentives offered by alternative L1s and L2s. However, many of the users and capital in these other chains are likely to leave once the incentives end. Gnosis aims to create sticky users through a suite of products, with Gnosis Pay being the first. After months of improvements, Gnosis Pay is now ready for mass adoption. This cashback program is strategically designed to bootstrap user engagement without significant costs to the DAO. Users participating in the program must have GNO in their Gnosis Pay Safe wallet, incurring an opportunity cost by not staking their GNO. Thus, since GNO held in a Safe wallet will not be staked, the additional cost to the DAO would be minimal compared to the benefits.

Implementation

Users who hold GNO in the Gnosis Pay Safe will be eligible for cashback rewards on eligible Gnosis Pay Card transactions according to the following tiers:

• ≥0.1 GNO: 1%
• ≥1 GNO: 2%
• ≥10 GNO: 3%
• ≥100 GNO: 4%

The cashback percentage scales continuously within each tier (e.g., holding 5.5 GNO earns 2.5% cashback). Beyond 100 GNO, the cashback percentage does not increase any further. Additionally, Gnosis Pay OG NFT holders who qualify for the airdrop (with at least 0.1 GNO deposited) will receive an extra 1% cashback. For instance, a user holding 5.5 GNO and the OG NFT would receive 3.5% cashback. This feature will add value to future NFT campaigns by Gnosis Pay (e.g., referral programs).

A maximum of EUR 20,000, USD 22,000, or GBP 18,000 will be eligible to accrue rewards per month for every user.

The program will be administered and managed by Karpatkey, responsible for tracking, determining, and distributing the rewards, as well as reporting the results. The reward calculation code will be open source. We will also provide an endpoint for those that want to feature the rewards in their UIs.

Rewards will be distributed weekly, 5-12 days after the user made the payment, based on the lowest amount of GNO tokens held in their Gnosis Pay Safe during the week the payment was made. It is this amount of GNO held prior to the card payment that will be relevant in calculating the cashback. For example, having 1 GNO in the Gnosis Pay Safe and making a payment in the same week would yield 2% cashback. However, topping up GNO to the Gnosis Pay Safe after a payment does not change the cashback applicable to that payment. Eligible “payments” do not include ATM withdrawals, which will not count towards card payments for the purposes of this program. By participating in the program (transferring GNO to the Gnosis Pay Safe), users agree that Gnosis Pay will share transaction details related to ATM withdrawals with karpatkey. Transactions similar to this one on essence (for example, topping up bank accounts with the card) will also not be eligible, and this information will also be shared. However, personal information will not be shared. The program will run until the budget runs off, or until the DAO votes to terminate it or replace it. Cashback received from payments there were refunded will tracked and until the users has a "positive balance" of accrued rewards, no further payments will be made.

Shall this proposal passes, a trial period will commence on August 19th, which will run for a week and will not accrue any rewards. Then, the actual program will commence on August 26th.

The GNO Cashback Program is sponsored by GnosisDAO, offered and administered by the Gnosis DAO Operational Foundation, and operated by karpatkey in accordance with its mandate from the Sponsor.