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Safe, a leading multi-sig and smart account infrastructure provider, is moving to introduce new utility for its SAFE token and advance the project’s roadmap towards progressive decentralization.
A Feb. 13 governance proposal aims to introduce new use cases for the SAFE token within the project’s ecosystem, expanding on its current utility as a vehicle for governance voting. The proposal notes that SAFE should comprise a vehicle for achieving the “technical, economic, [and] governance decentralization” of key components of the Safe project, in addition to tokenizing value derived from the growth of Safe’s ecosystem.
The proposal suggests issuing SAFE as a reward for account users, exclusively allowing abstracted usernames to be claimed via SAFE, allocating SAFE to a module that would act as a protocol-native insurance fund, and incorporating the token into its proposed Fee Engine.
The document argues for intentionally keeping SAFE’s utility separate from the operation of smart accounts. It added that additional utilities for SAFE will likely be introduced through governance in the future.
The plan progressed from community discussion to a formal draft proposal on Feb. 26. Several governance delegates have since expressed support for moving the plan to a formal vote.
Safe spun out from Gnosis in mid-2022. The project then airdropped the SAFE token to almost 22,000 users, closed a $100M funding round, and launched a Swiss Foundation tasked with overseeing its off-chain assets.
The team noted that Safe has since enjoyed significant growth in spite of the 2022 downtrend, including a 1,000% increase in safe accounts created and a 2,100% rise in the number of active monthly users. Approximately 1.4% of all cryptocurrency transactions are now executed from Safe accounts.
According to Dune Analytics, Safe accounts hold $102B worth of assets, equating to 4% of the combined cryptocurrency market cap, based on data from CoinMarketCap.
Moving towards SAFE unlocks
If passed, the token utility proposal would mark the completion of the final roadmap milestones required to enable token transfers. SafeDAO previously voted against making the token transferable in November 2022, instead establishing five requisite preconditions for the unlock.
Said criteria include the conclusion of token claims in December 2022, ratifying a “constitution” in February 2023, establishing a governance framework in October, formalizing a framework for distributing budgets and other protocol resources in November, and lastly the current proposal outlining utility for SAFE.
While the current proposal passing would complete the final milestone required for unlocking SAFE, a separate proposal would need to pass governance to enable token transfers.
“SafeDAO is nearing completion of all five milestones outlined in its roadmap towards token transferability,” Safe told The Defiant. “This potential unlock could be triggered by a community vote to make the SAFE token tradable, fueling wider adoption.”
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