Gnosis Safe Grows as Multi-Sig Wallets Gain Adoption

OCT 18, 2022 • 5 Min Read

Joo Kian

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🌅 Welcome!

Aptos, an L1 blockchain built using the Move language, is off to a slow start. The chain is processing 4 transactions per second versus the maximum ceiling of 100K claimed by the project team. Aptos is set to list on various exchanges such as FTX and Binance tomorrow. Will Aptos be able to bounce back from this?

Today, we examine the adoption of Gnosis Safe, and our Research team looks at the new ATOM 2.0 fundamentals.

This is the Delphi Daily. Let’s dive in.


🚨 In Case You Missed It

  • Aptos, an L1 blockchain backed by a16z and FTX, is off to a slow start.
  • Dapper Labs enables NFT withdrawals to non-custodial wallets for users affected by the EU’s sanctions against Russia.
  • Azuki introduces the Physical Backed Token, an open-source token standard tying a physical item to a digital token.
  • The SEC and CFTC are looking into whether Three Arrows Capital misled investors about its balance sheet.
  • Shares of crypto bank Silvergate are down by 10% as the bank reports net income and revenue below expectations.

📊 Gnosis Safe Grows as Multi-Sig Wallets Gain Adoption

  • Gnosis Safe is a multi-signature smart contract wallet that requires a minimum number of pre-determined wallets to sign a transaction before it can be broadcast to the network.
  • This is a security feature intended to protect a wallet from being drained. Even if such a wallet is compromised, the exploiter would require the minimum number of signatures (e.g. 2 out of 3) before executing a transaction from the wallet.
  • Since 2021, the adoption of Gnosis Safe has been trending upward. The project grew from ~120 Safes created each week at the start of 2021 to ~1-2K today. During the same period, weekly transactions from Safes grew from under 1K to ~10-20k.
  • The growth is likely due to more protocols and companies using Gnosis Safe to secure their internal wallets. Users trying to remove a single point of failure (e.g. losing their seed phrase) can also use Gnosis Safe.
  • Furthermore, protocols and wallets like Prysm, Tally, and Metamask Institutional are continuously integrating Gnosis Safe for their users, driving even more adoption from external sources.
  • For more on Gnosis Safe, Delphi members can read our Delphi Pro report here.

⚡ ATOM 2.0: Building the Hub’s Economy

  • Breaking it down, there will be four value drivers to ATOM. The Scheduler will capture MEV and split profits with partner chains.
  • The Allocator will take funding from the treasury through ATOM issuance and Scheduler profits to generate their own profits through various activities like LPing, seed investing, lending, etc.
  • The majority of Allocator profits will be reinvested, but there is the possibility to distribute some to token holders as well.
  • Interchain Security will provide additional income in the form of gas fees and Consumer Chain tokens which will be distributed to validators, delegators, and the community pool.
  • In the long-run, these four drivers are expected to yield sufficient revenues so that the Hub can stop ATOM issuance altogether.

  • This is a substantial overhaul to ATOM. In the past, it has been valued purely as a monetary asset, with no direct tie to the ecosystem and based off of an entirely speculative premium.
  • That changes with ATOM 2.0 as there will be three pillars driving value to ATOM’s success:
    1. Money: Reserve asset in the Interchain. Accumulated in treasuries around the ecosystem and the settlement currency for the Interchain Scheduler.
    2. Backing: Having a tangible floor value behind ATOM. The backing transforms ATOM into a quasi-IBC index play and highly competitive “decentralized VC” in the ecosystem.
    3. Productivity: Cash flows from Interchain Security, the Interchain Scheduler, and Allocator profits.

  • It’s a bold transition, and one that has been debated heavily in the community with serious pushback from notable stakeholders like founder Jae Kwon.
  • ATOM will lose its neutrality if this goes through. There are very real and significant execution risks to this new model as well.
  • But ATOM has been left aside in the ecosystem for too long. If it doesn’t start focusing on itself now, then mindshare towards the Hub will become apathetic and move to other chains in the ecosystem.
  • Detractors say ATOM 2.0 is risky, and they are right. This is the riskiest thing the Hub has done in its existence. But you could argue the biggest risk to the Hub is doing nothing, for it will become irrelevant and passed by anyway.
  • For more on ATOM 2.0, Delphi members can read our Delphi Pro report here.

🐣 Notable Tweets

Aptos Tokenomics

Understanding MEV

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