What is Gnosis?
Gnosis (GNO) 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 (GNO) 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 (GNO) 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.
Gnosis Architecture
Gnosis (GNO) project has three major components or layers in its mainnet:
- Core Layer
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.
- Service Layer
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.
- Applications 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.
Gnosis Development
In 2017 as we’ve earlier stated, the Gnosis (GNO) 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 market 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 edits 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 predicton 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.
Bottom Line
Gnosis (GNO) 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.
