GnosisDAO votes to invest further $4.8 million to fund HOPR's in-house development of private, uncensorable VPN

GnosisDAO appears set to continue backing the development of Gnosis VPN, a product offering that has generated significant buzz. The DAO has reached a quorum to invest an additional $4.8 million to fund further R&D of the project with hopes of bringing it to market within two years, according to a snapshot vote ending on Wednesday. 

Development of the Gnosis VPN began last year through a partnership between Gnosis and mixnet developers HOPR, which would build the VPN in-house. In exchange for $1.5 million in seed funding Gnosis would receive “a significant share of the HOPR Association’s treasury.” 

The arrangement is mutually beneficial both on technological and pecuniary grounds. Not only is onchain privacy “pointless” if an internet provider can link transactions to an IP address, but decentralized VPNs — services that mask search traffic — are a largely untapped and likely lucrative market, HOPR co-founder Sebastian Bürgel argued in his proposal.

Gnosis is the crypto ecosystem behind some of crypto’s most used and most foundational tools. The community maintains and has spun out several decentralized projects, including the non-custodial Safe Wallet, Gnosis Pay and the protocol behind CoW Swap. Its relationship with HOPR is an extension of this attempt to support a full stack of disintermediated apps.

Research and development

Bürgel’s initial pitch split R&D into two phases: 12 months to launch a proof-of-concept followed by two years to create a polished, consumer-ready product. Gnosis' initial $1.5 million investment was HOPR's largest fundraising effort at the time. 

“The results were far in excess of expectations, demonstrating the viability of Gnosis VPN,” Bürgel wrote in a proposal to continue funding. “However, it is still only a proof of concept. To continue development, the next stage would be to turn Gnosis VPN into a truly web3-native product with decentralized tech and incentive structures.”

Today, Gnosis VPN is essentially a browser extension for accessing sites and services within the Gnosis ecosystem. Users need to run their own HOPR node. While the PoC version “successfully obscures” users' IP data and metadata via HOPR’s mixnet, Bürgel notes “further work is needed … to make the service truly uncensorable.”

The additional funding will support research into “highly technical” problems involving advanced cryptography as well as the runway needed to build onboarding solutions like mobile and desktop apps for the VPN. It will also fund the expansion of the HOPR network to thousands of nodes from about 500 today.

Funding and revenue

Gnosis would pay out the $4.8 million (and an additional 500 GNO grant to incentivize new node runners) over two years. In exchange, HOPR is offering the DAO a 30% discount on HOPR tokens, which can be purchased on a time-weighted average price of 90 days after each payment. 

“The commercial alignment of Gnosis VPN and Gnosis DAO is strengthened by the total absence of a traditional ‘business model.’ Gnosis VPN and HOPR are developed as Free and Open Source technology,” Bürgel said. “No IP will remain with HOPR Association and team and no fees or other revenue from Gnosis VPN would be extracted by them.”

Bürgel notes value produced by the service will accrue to node runners, including Gnosis Chain validators via gas fees, HOPR mixnet relay node runners and Gnosis VPN exit node operators.

Gnosis VPN will be further integrated into the Gnosis ecosystem by using its Circles v2 decentralized identity and trust framework to onboard users without a traditional sign-up process. 

The voting period has received near-unanimous approval so far and will close around 5 p.m. ET on Wednesday. Notably, phase three of the voting process was delayed by the Bybit exploit two weeks ago after Gnosis temporarily shut down Safe UI, which the hackers infiltrated to perpetrate the attack.