Ethereum Name Service Selects Karpatkey DAO to Manage Its Endowment Fund

The ENS$9.5726 decentralized autonomous organization (DAO) has chosen a new fund manager to take charge in managing its treasury in the wake of crypto winter.

In a vote that opened last Wednesday, Nov. 17, and closed on Tuesday evening, Nov. 22, community members selected Karpatkey DAO, a decentralized finance (DeFi) fund management organization originally incubated through Gnosis DAO.

Karpatkey received 1.76 million votes. Notable addresses that picked Karpatkey include ENS co-founder Alex Van de Sande (avsa.eth), founder of Rotkiapp Lefteris Karapetsas (lefteris.eth) and ENS steward Griff Green (griff.eth), who altogether had a voting power of 468K ENS.

“None of the above” came in second place with 1.3 million votes.

Now that the community has chosen Karpatkey, the treasury management firm in collaboration with Steakhouse Financial, going forward, will manage the bulk of ENS’s treasury composed of mostly USDC and ETH. With more than two years of experience, Karpatkey currently boasts over $397 million of non-custodial assets under management, excluding ENS.

The goal of the endowment fund, called ENS Endaoment, is to create a sustainable fund that can fuel continuous development regardless of macroeconomics conditions that may adversely affect revenue stemming from ENS registrations and renewals. Talks of the ENS Endaoment were happening as early as March before the crises related to Terra, Three Arrows Capital, Celsius Network and FTX, according to Nicholas Johnson, one of three directors for the ENS Foundation, and Mona El Isa, CEO and founder of Avantgarde, one of the potential fund managers up for consideration.

Karpatkey said in its proposal, “The funds would be managed transparently and completely on-chain through a non-custodial solution … The core of Karpatkey’s non-custodial solution relies on the most battle-tested tooling to manage DAO treasuries: a proxy Management Safe and the Zodiac Roles Modifier.”

Zodiac, developed by Gnosis Guild, is “a collection of tools built according to an open standard” as said on its Github page, while Safe, securing close to $40 billion in all its Ethereum contracts, is one of the most popular ways to custody digital assets in a decentralized manner.

$52 million is the initial size of Karpatkey’s proposal for the ENS Endaoment and $69 million with a projected return of 5.83% is the final stage of Karpatkey’s proposal. “The strategy would use low-risk, medium complexity DeFi strategies such as providing liquidity to automated market makers.”

In an interview with CoinDesk, Karpatkey’s business development manager who goes by "DeFi Foodie" on Twitter, said, “It’s been a great exchange that has been in the forum, on the diversity of voices, how everybody could just give their opinion openly. And that’s been really healthy for ENS DAO because people can just speak their minds and have civil exchanges. When the forum asks questions [and] challenge[s] points, I think that’s something that is rich for the community and favorable.”

El Isa told CoinDesk that if a fund manager endorses a non-custodial, completely transparent solution, such as Enzyme, Avantgarde's proposal choice for a decentralized asset & treasury management protocol, for the ENS Endaoment, it “would be the first example of something being run completely on-chain”, where a FTX or Bernie Madoff situation “wouldn’t be possible."

Read more: What Is the Ethereum Name Service? How ENS Works and What It’s Used For

UPDATE (Nov. 23, 12:02 UTC): Updates headline and story to clarify that the endowment fund is called ENS Endaoment.

UPDATE (Nov. 23, 13:14 UTC): Updates the quote from Mona El Isa and details when discussions for the ENS Endaoment were happening.

UPDATE (Nov. 23, 15:45 UTC): Adds Karpatkey's collaboration with Steakhouse Financial in the fifth paragraph.