What is Gnosis (GNO)?
What is Gnosis?
The Gnosis project is a decentralized and open-source prediction market platform built on the Ethereum blockchain. Gnosis provides the needed infrastructure for third parties to create prediction market apps. It also builds new market mechanisms for decentralized finance. Their three interoperable product lines allow users to create, hold, and trade digital assets on Ethereum.
The platform’s goal is to create an infrastructure for numerous decentralized applications which can act as forecasting solutions, information sources, and standards for predictive digital assets in the market.
The project is powered by an Ethereum token called GNO, the platform’s native currency. That said, Gnosis also offers another token OWL, which is obtained when Gnosis users stake GNO.
Who is the Founder?
Gnosis was co-founded in 2015 by Stefan George and Martin Koeppelmann as a part of the ConsenSys brand, an Ethereum venture production studio. However, in 2017, Gnosis raised enough funds to come out from ConsenSys as an independent brand.
Stefan George, before starting Gnosis founded the centralized Bitcoin prediction market fairlay.com.
How does Gnosis (GNO) Work?
Gnosis offers 3 distinct platforms to achieve its objective. However, these 3 unique platforms are united together by the 3 layers of the Gnosis architecture.
Let’s see the 3 distinct platforms first:
- Gnosis Safe: This is a cryptocurrency app and wallet that enables interaction with Ethereum apps.
- DutchX: This is a decentralized exchange that allows users to auction and trade off their tokens.
- Apollo: Apollo is a decentralized prediction market platform that enables users to create personal tokens.
Here are the 3 layers uniting these platforms together:
The Core Layer
The core layer is the foundation of the Gnosis platform. It comprises smart contracts that power the workings of the Gnosis network.
The core layer provides decentralization of digital assets through a distributed computer network. It also regulates the issue of tokens and oversees the functionality and convenience of the Gnosis platform interface.
The workings of the Gnosis network powered by the core later include settlements, market mechanisms, outcome tokens, and events. The core layer also enables fast transactions among users at no cost. The only charge is a 0.5% fee to users who buy outcome tokens from the market maker.
The Service Layer
The service layer is derived from the core functions as a service with paid tools used for setting up the platform. This layer is also responsible for introducing third-party technologies. This includes the integration of payment processors, stablecoins, and Chatbots.
The Applications Layer
The application layer houses the main prediction market of decentralized apps on the Gnosis network. While apps developed by Gnosis are available in this layer, the bulk of the applications for prediction markets available in this layer is developed by third parties. Third-party developers have the legal right to charge users for the services they render.
The application layer also houses the main segment of the network’s smart contracts. If a user wishes to make changes to the event interface, they can make use of the special section library found in this layer.
OWL is the token generated when GNO is staked. The token was first generated on June 2018, right after Apollo was launched. OWL token is a stablecoin and it is pegged to the US dollar. This means that every OWL token is worth 1 dollar. Gnosis plans to increase the supply of OWL 20x more than its average usage. This helps maintain its peg.
Fees in the Gnosis Prediction Market are paid for using OWL tokens. There are plans to allow OWL tokens to be used to pay trading fees in the prediction market in the nearest future.
GnosisDAO is the prediction market-driven collective that uses Gnosis products to steward or guide decisions regarding support, development, and governance of the Gnosis token ecosystem. GnosisDAO enables governance over the Gnosis Protocol.
The governance process is conducted through the GnosisDAO category on the Gnosis forum 228. For a proposal to be approved in GnosisDAO, it must pass through three phases successfully.
Phase 1: Ideation
The Ideation phase initiates an informal discussion on Gnosis Forum concerning prospective proposals to GnosisDAO. The time frame or duration for this phase is open-ended.
A user can initiate a phase 1 proposal by posting their idea in the GnosisDAO 288 with a phase-1 label. This first phase aims to ensure that enough community insight for refinement is gathered before a formal poll is opened.
If the discussion for the proposal doesn’t get enough attention from the community, the proposal may not be successful. There are no formal requirements for phase 1 proposals to pass the next phase.
Phase 2: Specification
If a proposal makes it to the second phase, it must be posted in the GnosisDAO category 228. The proposal must use the Gnosis Improvement Proposal (GIP) 131 template. The template can be easily created by adding the GIP subcategory. Once you do this, your draft post will automatically be populated by the GIP template. You are expected to fill in all the required information.
Fields in the GIP template that must be addressed include Motivation, Abstract, Implementation, Specification, and a Simple Summary.
The duration for Phase 2 proposals is 5 days. The proposal must have a 5-day forum poll about the proposed outcome. The poll must include the option “Make no Changes”
For proposals to move from Phase 2 to Phase 3, there must be an outcome with a relative majority of votes on the forum poll. If however, the majority of votes on the forum poll indicate “Make no changes” the proposal will be moved to Phase 3.
Phase 3: Consensus
This is the final phase of a proposal. Proposals in this phase are opened to 2 signaling methods for token holders. The duration for this phase is 7 days.
Proposals can be moved to phase 3 by editing the Phase 2 GIP post to reflect the result of the forum poll. The proposal tag should also be updated to phase 3.
In this phase, a GnosisDAO snapshot poll, 107 poll, must be created. This should contain the proposal text and a link to the GIP post on the Gnosis Forum. The “Make no changes” option must also be included. The GnosisDAO snapshot poll should be added to the GIP post.
For a proposal to be approved in Phase 3, there must be one outcome. A relative majority of GNO used to signal on the GnosisDAO snapshot poll must be accompanied by a yes-voting quorum of a minimum of four percent of the circulating supply of GNO.
If the majority of GNO used the signal “Make no Changes” the proposal will be rejected and closed.
This is another key feature of the Gnosis network. The DutchX platform is a decentralized exchange. Users can auction their tokens in DutchX whenever they please.
The Apollo protocol is a collection of packages that enables users to execute the system’s function to create their prediction market tournament or prediction market interface based on the Gnosis prediction market platform framework.
Asides from the creation and maintenance of the prediction markets, users can also build cryptocurrency to be used on the platform.
Weaknesses of Gnosis
Just like most cryptocurrencies, GNO is easily affected by the high volatility of the crypto market. This has affected people’s interest in investing in the token.
How is Gnosis (GNO) Created?
GNO cannot be mined as it isn’t possible to create new blocks to receive rewards. At its launch, the Gnosis team minted 10 million GNO. These tokens were then sold in an ICO event. However, the current circulating supply is just over 1 million tokens.
Mining Gnosis (GNO)
All available Gnosis tokens have been minted so it isn’t possible to mine GNO (create new blocks).
Which Blockchain does Gnosis (GNO) Use?
Gnosis (GNO) is an ERC-20 token developed on the Ethereum blockchain.
How to Use Gnosis?
GNO token is the ERC-20 token used to operate the Gnosis platform and governance. GNO is Ethereum based and 10 million GNO was sold during the Gnosis ICO.
GNO is used to generate OWL tokens. When a Gnosis user stakes GNO, he gets OWL in return. Staking means that the GNO is locked in a non-transferable smart contract.
The amount of OWL a user gets after staking GNO is dependent on the total supply of the OWL token in the market and how long the staking lasted.
Ownership of GNO also enables the holder to vote in the governance of the Gnosis protocol, participate in the prediction market, and receive rewards.
The issuance of GNO is controlled by the Gnosis governance. This helps to keep it at a minimum.
How to Buy Gnosis (GNO)?
Gnosis is traded on many of the top cryptocurrency exchanges like Binance, Kraken, Bitrue, Gate.io, Coinbase, and Huobi Global. A simple search on CoinMarketCap will also show a comprehensive list of all the decentralized exchanges that support Gnosis.
The process of buying Gnosis on these exchanges is quite straightforward. But you will need to have a profile or an account with a centralized exchange to be able to buy Gnosis. It is also possible to swap other digital tokens for GNO on decentralized exchanges like Uniswap.
You can buy Gnosis directly using fiat currencies like USD or with another cryptocurrency. If you decide to buy Gnosis with another cryptocurrency, you will need to buy the other crypto, then use it to buy Gnosis. This process is usually longer and more stressful than the fiat option.
While most exchanges may have different requirements for opening an account with them, the process of buying Gnosis is similar across all platforms. There may be some slight disparity in each step, but the result is the same.
Below are the steps for buying Gnosis on most exchanges:
- Create an account on your preferred exchange.
- Add a payment method and activate the payment method.
- If you want to buy Gnosis with another crypto, buy the cryptocurrency.
- If you are buying Gnosis with fiat currency, skip the previous step.
- Start a trade.
- A list of assets will be displayed, select Gnosis.
- Enter the amount you wish to purchase.
- The trade will be finalized when you make the payment.
Regardless of the platform you use, your Gnosis token should reflect in your account immediately after you make the payment and finalize the trade.
How to Store Gnosis (GNO)?
GNO can be stored in any ERC-20 compatible wallet. While there are a lot of software and hardware wallets to choose from, it is best if you save GNO in its native wallet known as Gnosis Safe wallet.
The Gnosis safe wallet is a multi-signature smart contract wallet that runs on several blockchains. It enables users to define a list of signer accounts and a threshold number of signers needed to confirm a transaction. This wallet is perfect for businesses that wish to store their GNO. The multi-signature feature prevents one person from compromising the crypto assets. Transactions are only approved when the threshold of owner accounts has confirmed the transaction.
As stated earlier, there are other wallets asides from the Gnosis Safe wallet, that support GNO. This includes hardware wallets like Trezor Model One and Ledger Nano wallets. Hardware wallets are the best for the storage of cryptocurrencies because they are less susceptible to hacking attacks.
Best Place to Stake Gnosis (GNO)
The Gnosis platform does not offer conventional staking. However, users can stake their tokens in a smart contract on the Gnosis platform to receive OWL, which is the utility token of the Apollo platform. This Token is used to pay transaction fees on Apollo.
Here’s how the smart contract works. GNO token holders lock their tokens for 3 to 365 days in a smart contract. Next, the smart contract determines the selected lock duration and adds that duration to a formula developed to regulate the OWL token supply. Before locking your GNO tokens in the smart contract you will be able to see the number of OWL tokens you’ll receive when you execute the smart contract.
After executing the contract, 30% of your OWL will be distributed immediately, and the extra 70% will be distributed proportionally in the course of the locked period.
Immediately after the locked period is over, your locked GNO stops generating OWL and you’ll be able to transfer your GNO tokens out. There’s also no limit as to the number of times you can stake your GNO tokens to create OWL.
What You Need to Know about the Future of Gnosis (GNO)?
The GNO token derives its value from its role in facilitating the operation of the Gnosis network. This means that the future of the token is dependent on the widespread acceptance of the platform. If the upcoming projects positively impact the platform’s acceptability it will directly affect the price of the token.
Conclusion: Should You Put Your Money in Gnosis (GNO)?
With regards to the Gnosis price predictions, there are varying opinions from experts. This means that there is no global consensus either about the negative or positive future of Gnosis price movements.
That said, the possible growth of the GNO token in the future is dependent on various factors such as project announcements, fresh technological solutions, and the state of the crypto industry. So before you put money into GNO ensure that you are well abreast with the correct happenings of the platform and the crypto space. And ensure that you do your own research.
Risk in Investing in Gnosis (GNO)
Cryptocurrencies are volatile investments, and GNO is no exception. So only invest funds that you’re willing to lose in the worst-case scenario.
Our extensive analysis of the different Cryptocurrencies doesn’t stop here. You can also check out our “What is ADAPAD?” guide to know more about another huge project.
Most frequent questions and answers
The Gnosis protocol has a 0.1% in-built fee for all trades. This fee is divided evenly between GNO holders and the solvers.
The GNO coin was launched on April 24th, 2017.
Prediction markets are platforms that allow users to place a bet on future events. Gnosis, in its whitepaper, defines prediction markets as crowd-sourced wisdom. Prediction markets gather information about expected outcomes by offering a financial incentive to update all data points accurately.
For example, a prediction market platform can ask a question such as who will win an election, candidate C or candidate D, or someone else? The prediction market platform participants then register their opinion by buying shares that support one of the outcomes.
The total purchased share of the option displays the probability of its occurrence. So if there are 85 shares in support of candidate D and 15 shares for candidate C, then the likelihood of candidate D winning is 85%.
If an individual believes they have superior knowledge about an event they are motivated to purchase shares that display the opinion. At the close of the event shares of the winning option can be redeemed for a dollar and other shares are worthless.
Yes, Gnosis was developed on the Ethereum blockchain.
Gnosis technology provides the infrastructure for third parties to develop prediction market applications.
The Gnosis platform utilizes a series of smart contracts developed on the Ethereum blockchain. Because the smart contracts are hosted on the Ethereum blockchain, the base security is ensured by the miners and nodes responsible for securing the Ethereum network using Proof of Work. In addition, the Gnosis project carries out regular audits to make sure that all costs within their smart contracts are secure, updated, and compliant with the Ethereum framework’s present state.
No, Gnosis is a decentralized open-source prediction market developed on the Ethereum blockchain.
Gnosis is based in Gibraltar.
When users stake their GNO tokens, OWL tokens are generated as their reward. OWL tokens are then used to pay for fees in the Gnosis prediction market platform. However, all fees not paid for in the OWL token are sold for GNO and burned. In the future, the platform will permit OWL tokens to be spent on trading fees as well in its prediction market.
That said, OWL tokens are stablecoins and pegged to the United States dollar. So every OWL token is equal to a dollar.
There is a total supply of 10 million Gnosis tokens. All Gnosis coins were pre-mined so the project has a fixed supply.
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