Prediction markets (betting on the outcome of certain events) have been growing in popularity since the 1990s. They started out focusing on things like election outcomes, but now they’ve shifted into many other sectors too, and have proved to be particularly popular in the finance industry. Gnosis was created to offer a decentralized permission-free platform for gathering information about potential event outcomes.
Gnosis is based on the Ethereum blockchain, and as well as being an open-source prediction market it also acts as an infrastructure within which forecasting applications can be built.
Gnosis aims to set the high standard in this area, providing custom search and the highest level of efficiency.
The main crypto token for Gnosis it’s called GNO which acts as a license to use on the Gnosis platform. Its other token is called WIZ, which is just for internal use.
Gnosis was first envisioned in 2015 by Martin Köppelmann and Stefan George and the company came into existence 2 years later. Its ICO of that same year attracted over $12 million inside 3 hours, and Gnosis began trading in the crypto markets the year after that.
Gnosis aims to be a disruptive platform offering a decentralized approach to market prediction. Its basis in the Ethereum blockchain gives it the benefit of that currency’s advanced smart contracts, and its protocol removes the need for any third-party involvement by making its environment transparent and secure.
The 3 layers of the Gnosis platform are named core, service, and application. Core is the free and open-source element that Gnosis is built on and this is what gives Gnosis its smart contract functionality. That functionality includes the Oracle standard, its management interface, event token creation, a market mechanism, and settlement. Core is open-source and free to use.
The services layer of Gnosis is where tool development takes place, and it provides extra functionality including a new market mechanism, tools for customizing apps, stable coins, state channels, and the Oracle platform. This layer is funded via fees levied on trading.
The application layer sits above the service layer in Gnosis and it’s mostly where you’ll find front-end applications, some of them created by Gnosis, and some by developers working for other companies, so they might use different business models. If that’s the case, then they may be charged extra fees for using the platform in this way.
As we’ve noted, Gnosis uses two tokens called GNO and Wiz, with GNO being the main token. It’s the one that gets traded on cryptocurrency exchanges while WIZ is for internal use only and can’t be traded anywhere.
10 million GNO tokens have been minted, so there’s no need to mine any more. Its stablemate WIZ has a set value of $1, but GNO’s value comes from the Gnosis platform being adapted. A fee of 0.5% is levied for predictive asset creation.
So, why bother having two different coins on the Gnosis platform? The answer is that WIZ it is used to pay for certain services on the two layers that aren’t free. Users create them by locking their GNO tokens for somewhere between one month and one year. The number they get is proportional to the number of GNO tokens they lock and the timespan. They get 30% of the total WIZ coins straight away, and the rest are generated progressively, with the rate set at 20 times average monthly use and controlled by an algorithm as part of a smart contract.
Gnosis users don’t have to pay their platform fees using Wiz though. They can use other cryptos if they want, with the fee moved to an auction smart contract, where it’s sold for the GNO tokens. This is locked into the same contract permanently. The percentage of the locked GNO tokens defines how much is deducted in fees.
Gnosis is useful as a hub for global liquidity, and as a platform which lets developers build a wide-ranging of different decentralized apps.
Gnosis allows aggregated information to be used in the prediction of event outcomes in the areas of governance, price discovery, insurance, financial markets among many others.
Gnosis has been working in conjunction with a variety of law firms so that the platform intersects seamlessly with different authorities around the world.