Due to the numerous events surrounding the DeFi industry, users now try hard to make predictions. These predictions, most of the time, are related to digital assets.
That’s why it becomes paramountly important to keep track of them. Gnosis offers a very interesting solution to this by providing a prediction platform.
Gnosis is a decentralized platform for predictions. The platform runs on the Ethereum blockchain through smart contracts. Anyone can use the protocol to predict the result of events. You can participate in the sale of a binary position when a random event ends.
You can win a prediction of an event in the prediction market platform. This will earn you more digital assets from the prediction pool.
Every prediction has its odds based on the possible outcome. You can earn heavily when your prediction contradicts many people in your final win. Through this Gnosis review, its token, and how it works.
What is Gnosis?
Gnosis is a decentralized application that operates as a prediction market platform. It is built on the Ethereum blockchain. Gnosis gives the infrastructural layer that enables users to build their prediction market apps.
Gnosis Crypto History
The Gnosis crypto developing work started way back in 2015. The protocol founders, Martin Koppelmann (CEO) and Stefan George (CTO), finally launched Gnosis in 2017. The headquarters of the company is in Gibraltar.
The Gnosis crypto collected some funds through the Dutch auction style. The team realized a hard cap of $12.5 million in 10 minutes while still keeping 95% of Gnosis tokens.
How Does Gnosis Work? (Its Basics)
In making predictions on the results of future events, the Gnosis protocol uses crowd-sourced wisdom. The result of any event has a token associated with it. This means that users can buy, sell and/or trade on the associated tokens for an event.
Also, due to the dynamic nature of the possible outcomes in the prediction market, everything can change. So when the possibility for the occurrence of an event changes, its tokens’ value will also change. These constant changes give reflections of the users’ belief in the predictions.
The prediction market will aggregate information on future events through users’ predictions. Some outcomes of an event may have a greater probability of occurring than others. This gives different values of the associated event tokens in the open market.
Usually, the value of a token can either increase or decrease. Through some space of time, some outcomes with a greater possibility of occurrence will attract more value to their tokens.
Once the final outcome is revealed, the representing token will be fully valued with an increase. This will also nullify the values of all other event-associated tokens, and a keeper or buyer will lose.
Suppose that using the prediction market, a user puts an event question, ‘When will Ethereum launch its new product?’ And he gives the options: July, August, September, October, and Others.
By putting ‘Others,’ he makes the sum of all probability to be 100%. Without putting the ‘Others,’ there’s always the probability that none of the other options will be correct.
Once the market opens, the tokens associated with the option ‘Others’ will get the highest price. This’s because the probability of having the non-mentioned months of the year will be higher than the ones in the option. When any month in the option is eliminated, there will be a subsequent change and adjustment in the prediction market prices.
Suppose Ethereum later announced either September, October, November, or December as their option. This announcement will create some changes in the prices of the tokens in the prediction market.
There will be an instant drop in the price of the tokens for July and August, making them worthless. Users who took them as an option will rush to sell off those tokens. If the news went viral, it might be difficult for the holders of the tokens to get buyers.
From the announcement, the tokens’ prices for ‘Others’ may even double those of September and October. There’s also a probability of having a twist in the prediction market.
More people believe that October is likely to be the month irrespective of the announcement. This will make the token price for October to surge higher than even tokens for ‘Others.’
Then Ethereum team finally announces October as the month for their product release. The prediction market will close, and October token holders will then claim their rewards.
You can make money from the prediction market in two ways. The first is by making correct predictions of the outcomes of events. The second method is by trading on the outcome tokens when there are changes in the market conditions.
Prediction Market Value
In its functionality, Gnosis as a prediction market leverage on ‘Wisdom of the crowd.’ This explains a situation where a group’s predictions are more accurate than those of an individual. This such cases, it does matter if the individual is an expert in cryptocurrency predictions.
The prediction market suits several predicting scenarios. You can use it to source information on many topics. Some of such topics include price forecasting, epidemics, and climate change.
Also, it helps determine policies for different governance models. These policies can positively impact the entire population. By using the prediction market for insurance purposes, you can effectively evade risks.
Prediction markets have also found great usefulness in the financial sector. You can use the project to determine the probability flow for the future prices of any asset.
Gnosis project has three major components or layers in its mainnet:
The core layer is the foundational component of the platform. It houses the smart contracts which enable the entire market mechanism in the protocol.
This layer undertakes the regulation of token issuance, which is the primary function of the protocol. It allows decentralization of digital assets by utilizing distributed computer network.
Also, the platform interface runs from the core layer of the Gnosis network. This enables users to make their transactions without delay or fee charges.
The only applicable charge in the core layer is a maximum charge of 0.5% fee on buying outcome tokens. This is usually for users that purchase from the market maker. However, the protocol’s team works for its elimination.
This layer gets its derivatives from the core and works as a complement for the core. It operates as paid tolls for the setup of the entire Gnosis platform. It also helps in the introduction of third-party technologies. This can be a sort of payment system or digital assets.
Also, this layer houses some services like chatbots and stable coins. From the plans of the Gnosis team, this layer will get more features in its functionality.
However, the team expects that the service layer will have a greater interface with users and other consumer applications. Also, these applications will still link with the core layer.
The application layer houses the entire user interfacing applications. These applications usually focus on a given prediction market. Though Gnosis has some applications in its components, third-party developers provide most of them.
The application layer is built on top of both the core and the service layers. This layer enables a user to make adjusts to an event interface. The user will utilize the special section library in the application layer.
The Development Team
The Gnosis development team established the Gnosis protocol in January 2015. The protocol was co-founded by Martin Koppelmann (CEO of Gnosis ) and Stefan George (CTO of Gnosis). Koppelmann and George allied with Dr. Friederike Ernst, who became the (Chief Operations Officer) COO of Gnosis.
Gnosis launched was the first prime decentralized application (dApp) on the Ethereum Blockchain in August that year. The Gnosis team has continuously developed and released products successively.
In December 2017, the team released Olympia, its Bitcoin prediction platform. They also released Apollo in May 2018 and its decentralized exchange (DEX) DutchX within the same period.
At the end of 2018, the team deployed the coin wallet, the Gnosis Safe, and in April 2019, Mercury was launched. Gnosis protocol has some globally contributive advisors. They include the co-founder of Ethereum Vitalik Buterin and the founder of Consensys, Joseph Lubin.
In 2017 as we’ve earlier stated, the Gnosis development team launched the Olympia test prediction Tournament. The prediction system was deployed to study how the market and gather knowledge about how these prediction markets function.
The system utilized Olympian tokens that were shared with all the contestants to bet on several prediction markets.
The winners are rewarded with GNO tokens that have real values. Also, a background edit at the Gnosis Management Interface that enables users to create and observe events in the market. The interface also allows them to place predictions on live events.
Gnosis development team released the Apollo in May 2018. Apollo is a prediction market environment for users to create their own price prediction based on the prediction market’s structure or framework.
Also, in April 2019, the team launched version 0.2.2 of the Mercury Smart contract framework. The smart contract framework is still under proactive development.
Gnosis Tokens (GNO and OWL)
The Gnosis project has two distinctive tokens, the GNO token and the OWL token. The GNO token runs on the Ethereum blockchain and hence is an ERC-20 token. The protocol’s team first minted and sold 10 million GNO in their ICO. So,
When a user stakes GNO, he gets OWL tokens. The process involves the locking of the GNO to make them non-transferable in a smart contract. The amount of OWL to receive from locking is dependent on two things. The first is the period for the locking of GNO tokens.
The second is the total supply or availability of the OWL token in the crypto market. The team plans on having a 20x OWL supply greater than its average usage.
The OWL has its first generation in June 2018 after the launch of Apollo. As stable coins, the OWL tokens have the flow of 1 OWL to $1. The tokens are used as payment tokens in the Gnosis platform. When GNO is used in purchasing OWL, the GNO tokens are burned.
It can’t be held any longer as the protocol’s token. Also, where any platform fee is made with other ERC-20 tokens, Gnosis will use those tokens to buy GNO. After the buying, the protocol still burns the tokens.
The Gnosis platform maintains the value of the GNO tokens through the processes of staking and burning. Through the adjustment of its distribution, the platform keeps the price value of OWL tokens at $1 per token.
How to Buy GNO
You can conveniently buy GNO tokens on any exchange where the token is listed, such as Kraken, Bittrex, and others.
Here is a guide to help you on the step to take:
- Register an account on a suitable exchange – Remember that every exchange doesn’t list the GNO token on their platform. You should only sign up for an account on an exchange that lists GNO tokens.
- The account registration process will require you to input some of your personal information. The information includes your name, physical and email addresses, and perhaps your phone number.
In some cases of account verification, you will upload a government-issued ID. This can also serve as a KYC (Know Your Customer) process. Also, remember to initiate your two-factor authentication to secure your funds.
- Deposit Your Funds – Once your account is opened and verified, you should go ahead and deposit some funds into the account. This will enable you to make your purchase for the GNO tokens.
- Depending on the exchange you are using, you may not be able to buy the crypto directly with fiat currencies. This means you will first purchase any cryptocurrency such as Bitcoin (BTC) or Ether (ETH). Then you will make an exchange with that crypto for GNO tokens.
- Follow the exchange approved procedure, and transfer your fiat currency to purchase BTC or ETH.
- Buy GNO – When you’ve gotten the cryptocurrency, you can search from your search box the right swapping option to get GNO.
- If you are using BTC for the exchange, the right option to select will be GNO/BTC. Then click on ‘Buy GNO’ and enter the quantity to buy. You will also need to select a market order or limit order as given by the exchange you are using.
How to sell GNO
Both the buying and selling processes are similar. You will also sell GNO tokens by clicking the ‘Sell GNO’ link. Then proceed by selecting the available digital asset for the swap that matches your need and click OK. The exchange will then execute your order at the best price in the crypto market.
GNO Token Trading
The Gnosis project team had their initial coin offering (ICO) around April 2017 using a Dutch auction. They sold 5% of all the tokens supplied within 10 minutes. The sales raised their ‘hard cap’ to USD 12.5 million.
The team retained the remaining 95% of the total token supply, which gave investors great concern. The team became aware of this and, in a bid to calm them down-promise never to move the tokens to the crypto market. They pledged to give a notice of three months before making any sale.
The GNO token price during the ICO was $50. But it rose to a high rate of $388.62 on the 20th of June 2017.
The token value remained at that high rate above $300 for like 7days before pulling back gradually to $200 around August 2017. The token price slashed again to $100 towards the fourth quarter that same year. At the time of writing this Gnosis review, its price stands at $171.
The team had great news when the GNO token price reached $ 461.17 for the first time on 5the January 2018. This happened during December 2017 & January 2018 crypto rallies. The GNO, with other cryptos in the market, lost value afterward. It remains at this lower price trading throughout 20018.
It reached a value below $10 towards the November and December period of that year, losing over 98% of its high value. Since that time, it has regained like twice its low value to reach $30 by the 25th of May 2019. The team believes that the GNO can continuously gain value if there should be more rallies.
However, users can buy GNO tokens on a good number of platforms. Platforms like Bittrex and Kraken have the greatest volume. Other accepted ones are HitBTC, Mercatox, BX Thailand, or the Bancor Network.
The GNO token has a limited volume though it is listed with all these exchanges above. This has become a major concern to its users.
Because it may cause users holding higher token volume to have a liquidity problem, it also implies that the founding team will be in sole control of the selling since they hold 90% of the coin token off the coin market.
GNO Storage Options
GNO is an ERC-20 token. You can store the GNO tokens using any ERC-20 compatible wallet. There are options of using a software wallet or a hardware wallet for your storage.
The use of a hardware wallet is always a better choice for security. The wallet comes with private keys, which you’ll maintain on the device. Some of the available hardware wallets include Ledger Nano, MyEtherWallets, Trezor Model One, etc.
The Ledger Nano wallet gives you great security for your tokens. The wallet is multicurrency enabled and can store above 1,000 different tokens.
The MyEtherWallet is a web wallet that is very easy and simple to use. It’s also free and user-friendly.
Also, you have the option of storing your GNO tokens with the Gnosis Safe wallet. This wallet offers both safety and convenience to its users.
Conclusion of Gnosis Review
Gnosis stands as the top decentralized prediction market. It provides the infrastructure for prediction applications. The protocol’s team strives to make Gnosis the leading forecasting platform. They also give the users great experiences through personalized information searches.
By devising the proper mechanisms for token control, the team has formed quality products. Through crowdsourcing predictions, the Gnosis token has made a great investment impact on the prediction markets.