Gnosis is spearheading the merger of prediction markets with digital assets, enabling the market to take on a more decentralised approach. Prediction markets allow investors to trade on the outcome of events, similar to how they would exchange digital assets.
What is Gnosis?
Gnosis is a prediction market platform built on the Ethereum blockchain. The platform allows users to trade crypto assets representing event outcomes from around the world, from sports matches to elections. As the results unfold, Gnosis tokens either increase or decrease in value depending on what was predicted by the user.
The goal at Gnosis is to build a foundation that decentralised applications can use as forecasting tools. This is done by allowing any party access to create their own markets while also gathering public opinion from an uncensored source. The long-term aim is to build a dependable forecasting tool that could help those in finance, business, insurance, and other sectors make more informed decisions.
The platform is made up of three sectors, the Apollo network, Gnosis Safe and DutchX, outlined below. Gnosis also makes use of two cryptocurrencies, GNO and OWL, to ensure their transactions are secure and running smoothly. Even though they're making good progress, they still have a way to go before reaching all their goals, notwithstanding competitors like Augur (REP) that offer similar services.
Who created Gnosis?
The Gnosis prediction market was founded by Martin Koeppelmann and Stefan George in 2015. No stranger to prediction market platforms, George previously founded fairlay.com, a centralised Bitcoin prediction market. The Gnosis platform was one of the first projects backed by the Ethereum-focused incubator, ConsenSys, and has grown into a 50+ team with its main development hub based in Berlin.
In terms of raising funds, the project successfully underwent an ICO (initial coin offering) in 2017, raising 250,000 ETH (around $12.5 million at the time). In just 15 minutes, the project sold 4% of its GNO supply.
A few months later, the Gnosis team launched Olympic, a test version of the prediction market platform. The next year, it launched Apollo, version 1.0 of Gnosis alongside DutchX, a decentralised exchange designed to trade and manage digital assets. Toward the end of 2018, the Gnosis ecosystem launched the Gnosis Safe, the platform's integrated wallet.
How does the Gnosis protocol work?
To ensure a comprehensive experience for all users, Gnosis employs three interoperable product lines and utilises three main products. Entirely built on the Ethereum platform, the three layers to Gnosis' architecture consist of:
- The Core Layer
Provides the foundational smart contracts that power the events, settlements, market mechanisms, and outcome tokens.
- The Service Layer
Offers resources for consumer applications and is used for tools like chatbots, stablecoins, and payment processor integration. It also controls the trading fee model.
- The Applications Layer
Contains the prediction market dapps. The majority of the dapps in this layer were created by third parties who charge users to use them, with Gnosis only building a few themselves.
The three platforms that make up the network are the Apollo Network, Gnosis Safe and DutchX, as outlined below.
The Apollo Network (Gnosis prediction market)
The Apollo Network, Gnosis' prediction market platform allows users to create their own markets for any events and tokens. Users can then speculate on the outcome by buying and selling positions.
As the outcome approaches, the tokens will increase or decrease in value, and once the event is finalised the tokens representing the final outcome will receive the full value while the others become worthless.
DutchX (exchange)
DutchX is the platform's decentralised exchange where users can trade and auction off their tokens.
Gnosis Safe (wallet)
Gnosis Safe is a browser and crypto wallet that interacts with Ethereum apps.
What are the Gnosis digital assets?
GNO Token
Gnosis' native cryptocurrency is GNO, an Ethereum-based token that was sold during the Gnosis ICO. GNO tokens have a maximum supply of 3 million tokens.
The main use case of GNO tokens is for creating OWL tokens via staking to earn rewards. Users can lock GNO tokens in the Gnosis chain to generate OWL tokens through staking, which is dependent on the length of the staking period. The max time is one year.
OWL Token
OWL tokens on the other hand are used to pay fees on the prediction market platform. These tokens are pegged to the US dollar, with their distribution maintaining its peg. OWL tokens were previously called WIZ tokens before being rebranded at the same time as the website.
Users can also opt to pay fees using supported Ethereum tokens. All fees not paid for in OWL are collected and sold for GNO, then burned.
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