How to authorize a multisig payment using Gnosis Safe

gm frens 👋

This tutorial will show you how you can collectively manage the treasury of your organization’s crypto funds and authorize a transaction with multisignatures using Gnosis Safe.

For individual purposes, a single key wallet , be it a hardware wallet like Ledger/Trezor or a software wallet like Metamask is just fine. 

But for an organization, like an LLC or a DAO, a single key wallet is not secure to manage your business's crypto funds, as it runs the risk of an employee or DAO contributor misappropriating the funds or simply misplacing the private key. And in this case, your organization’s funds are lost forever.

As the name implies, a multisignature (multisig) requires a minimum number of people to approve a transaction before it can occur. And Gnosis Safe has become the gold standard for multisig wallets and is an indispensable tool for your organization to go bankless.

This article will cover;

  • What is Gnosis Safe 
  • Who should use Gnosis Safe
  • How to create a Gnosis Safe account/wallet
  • How to authorize a payment using Gnosis Safe

🧐What is Gnosis Safe

Gnosis Safe is a smart contract multisig wallet that requires a minimum number of people to approve a transaction before it can occur.

You can add as many signers as you want, define a list of different signers and allocate a threshold amount to those signers (equivalent to authorized signatories for banks)

Moreover, Gnosis Safe gives you complete self custody over your funds 100% of the time and its signers have access 24/7 to transact in crypto. How cool is that !!

The app allows you to be connected to several blockchains including Ethereum, Polygon, Binance Smartchain, Gnosis Chain, Arbitrum, amongst others and as of June 22, had $39.6billion locked into their safes.

Gnosis Safe can be used by any organization, and especially for DAOs to manage their pooled funds.

🤩 How to create a Gnosis Safe account?

Create a Safe

To create a safe, head over their app and connect using your signer wallet. (In this example, I have used Metamask). Select the network you wish to connect to, and make sure you have some network’s native token in your wallet as the safe deployment will cost some fees. (in this example, I selected the Rinkeby testnet, and had ETH in my wallet)

Next click on ‘Create New Safe’, and you will be prompted to name your safe.

Add owners

Continue by inserting the list of owners of the safe, by adding their ETH address or ENS name.
By selecting that 2 out of 3 owners are required to confirm a transaction, no single individual will be able to execute transactions and all transactions are double-checked by 2 people.

Deposit funds to your safe

In order to deposit assets to your safe, you need to send them from your organization’s wallet to your safe using the safe address. Note that you can only send ETH, ERC-20 and ERC-721 assets to your safe address.

You will find the safe address on your dashboard. Alternatively you can also deposit funds by scanning the QR code, simply by clicking on ‘View Assets’ on the dashboard and clicking the ‘receive’ button.

Voila, pretty straightforward so far, what do you think?

👌How to authorize a payment using Gnosis Safe?

Once funds have been deposited in your safe, you can start to make payments in ETH and ERC-20 tokens.

To initiate a transaction and request approval from the other signers which have been added above, follow the steps below.

Send funds

  1. Choose on ‘New Transaction’ in sidebar 
  2. Click send funds 
  3. Fill in the recipient by adding their ETH address or ENS name (you can also choose a previously added contact from your address book)
  4. Select asset type 
  5. Insert amount to be transferred
  6. Finally you can review the details of the transaction and click ‘Submit’

Other signers to authorize transaction

Once the initiator of the transactions has submitted the payment, the transaction is queued and must be approved by the other signers of the safe.

In order to use Gnosis Safe, the other signers must first create their own safe to launch the application (similar to above steps), but do not need to deposit any funds.

In the sidebar, click transactions in queue, and complete the remaining steps;

  1. Review the transaction details and click confirm/reject

  2. Finally, submit the transaction.

Depending on the number of signers for a transaction, the transaction will either be executed right away or will require additional signatures from other signers.

Congrats, you have now successfully authorized a transaction in crypto collectively from your organization’s treasury wallet.

Future articles will cover batched transactions on Gnosis Safe using 3rd party apps and the different Safe apps that you can interact with using the Gnosis Safe interface.

About The Accountant Quits

The Accountant Quits is a platform for web3 accounting and prepares accountants for the future of decentralized work. Through its podcast and articles on Mirror, it aims to educate accountants by discussing with industry experts and thought leaders building practical solutions around blockchain for accounting.

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