Gnosis has recently announced the launch of GnosisDAO, the first decentralized prediction market-driven collective that would govern the Gnosis ecosystem through Futarchy. It will be based on decentralized governance, technical layers of the web3 ecosystem and would own control over 150k ETH and 8 million GNO Tokens.
Martin Köppelmann, the CEO of Gnosis, said
“GnosisDAO would initially use Gnosis prediction market technology to transparently guide decisions on development, support, and governance of their token”.
Introducing GnosisDAO governance
For initiating the proposal, one has to join the GnosisDAO forum by choosing the category. Anyone can participate in the GnosisDAO forum simply by clicking https://forum.gnosis.io/ and signing up. This not only allows you to put forward your proposal but facilitates participation in any proposal discussions.
GnosisDAO governance process works in a phase-wise manner. The process is completed in three basic stages- Ideation, specification, and consensus.
Phase 1 is the initial process of discussing the proposal. Anyone can initiate an idea or proposal to GnosisDAO. An informal open-ended discussion takes place on Gnosis Forum to discuss the event before opening a formal poll. There is no minimum requirement for passing the proposal to the next stage. A poor discussion would only mean a not very successful proposal. This stage helps in knowing the community's ideas and opinions.
This phase involves passing the proposal under the GenisisDAO category using the Gnosis Improvement Proposal (GIP). Phase 2 continues for five days when the proposals must be included on a forum poll for voting. The proposal will travel to the next stage only if it successfully passes from phase2. There must be at least one outcome with a relative majority of votes on the forum poll.
This has a duration of 7 days. To become eligible for voting in the poll, every community member must hold at least 1 GNO by Phase 3. This phase includes two signaling methods for the GNO token holders.
Passing Requirements for the proposal
Phase 3 (Consensus) proposals must include a GIP post, Omen Prediction Markets and corresponding Gnosis Impact app, and a GnosisDAO Snapshot poll. For the proposal to be accepted, one of the outcomes must receive the majority of GNO used for signaling on the GnosisDAOSnapshot poll and a quorum of a minimum of 10% of the circulating supply of GNO. In case the signaling indicates the result makes no changes, the proposal will automatically get dumped.
Gnosis prediction market
The holder can create two prediction markets (Omen market) on the proposal in which one can be influenced by GNO and the other by a stablecoin (xDAI) to enable the Gnosis Impact app to be included in the Gnosis Improvement Proposal (GIP) post. As soon as Omen markets are created, anyone can trade on them simply by connecting a web3 wallet.
An Omen prediction market is a decentralized prediction market platform governed by the DXdao. Whereas the Impact App is simply an app used to tell the price that traders are willing to pay for an asset in a particular event. The app is useful to calculate the protected price impact on GNO of the proposal’s outcome. These markets are funded by GnosisDAO owned smart contract account- Gnosis Safe Multisig. A GnosisDAO Snapshot poll is created under the consensus phase. Snapshot is a platform for off-chain, gasless signaling on proposals. Both Gnosis Impact app and GnosisDAO Snapshot poll must be edited into the GIP post.
Gnosis was started in 2015, as a decentralized prediction market built on the Ethereum protocol enabling users to place virtual bets on events and metrics governed by DAO. It is a fully decentralized DEX project where anyone can add any token just like Uniswap. DAO is a way of structuring where operating rules are digitally coded into a blockchain like Ethereum.
Gnosis is a decentralized prediction market built on Ethereum. Predictions are welcome on nearly everything- election results, football matches, or weather forecasts. A prediction market requires unambiguous publicly known events that have outcomes and that cover all possibilities. An oracle is needed to describe what outcome happened. It also requires a collateral token. Defining an event with all possible outcomes is defining the oracle. Anyone can put any collateral token and create an ‘outcome token’ depending upon the number of outcomes. When the outcome is resolved and the winning outcome is revealed, you can redeem the winning outcome for the collateral token. At any time you can go back and recover the outcome token and convert it back to a collateral token.
Founder Martin Köppelmann initially started the prediction market with Bitcoin. The whole idea was to build a prediction market that is decentralized. According to Martin, it was hard to work on Bitcoin. Ethereum smart contracts has made it much easier and after working for three years with Bitcoin, Martin shifted to Ethereum.
Gnosis Safe Multisig Wallet
Gnosis Safe Multisig Wallet is a smart contract wallet built on top of Ethereum. One of the key features of using the wallet is that it requires a minimum number of people to approve a transaction before it happens. This is a necessary solution to the risks associated with private key Ethereum users. Gnosis Multisig Wallet is useful for businesses comprising more than one person. Any carelessness by any individual of the organization while handling the private key can lose the funds forever. Gnosis Multisig Wallet will allow the transaction only after taking approval from all the employees/ members of the organization in order to prevent risks and frauds.
GNO Token is an ERC-20 token and the native cryptocurrency of Gnosis with a market cap value 130,696 ETH. GNO Token is listed on Uniswap, Kraken, HitBTC, and other top exchanges.
Gnosis SAFE Token model is a new account standard and open gateway to the internet of value. It is an end-to-end open system that can be reused and extended by anyone. However, Gnosis will continue to enjoy the dominant role.
A SAFE governance token has been proposed by the Gnosis which will be used to trade and earn rewards in SAFE currency. SAFE Tokens must not be perceived as an investment on the platform. It will rather be used by stakeholders of the Gnosis ecosystem that will contribute to the development of Gnosis Safe.
Relationship between GNO and SAFE Tokens
What is the need for SAFE tokens when GNO tokens are already in place? This is an obvious question. Financial benefits for the GNO Tokens will accrue from SAFE Tokens. As per the proposed idea, 25% of the total SAFE Token supply shall be used to build up GNO Tokens. This is to be done by implementing a combination of methods. SAFE Tokens can be invested into the GnosisDAO Treasury in the form of a smart contract for some time. The other way is to lock the SAFE Tokens in a Uniswap liquidity pool. These would be matched by GnosisDAO with GNO Tokens. The final liquidity shares can be divided between GnosisDAO and SAFE Treasury.
Gnosis & xDAI
In September 2020, Gnosis tied up with xDai to cope up with high demands and transaction fees and become a significant holder of the Stake governance token for a period of one year. All operations on Gnosis are deployed on xDai for faster inexpensive transactions to take place. xDai would also be used to support OPenEthereum clients in the future.
The currency used as a collateral token must be independent of the event you are predicting. The value of the event should not influence the value of the collateral. But in Futarchy, it is important to know how events affect a collateral token. Currency token is not just a currency but can be something to measure the closeness to the metrics. The whole concept of Conditional Tokens is to ensure no currency is dominant. Conditional tokens are globally accessible and easy to trade via smart contracts.
OpenEthereum is the second largest client run by node operators for Ethereum blockchain earlier know as Parity. The Parity Technologies, in Dec 2019 decided to turn down the support to maintain the codebase. They want to ensure the Parity Ethereum codebase is maintained and lives on for as long as the community finds it useful. In the direction to change the control, they proposed a new DAO structure made up of developers and organizations. And thus, Ethereum Parity revived as a more decentralized project 'OpenEthereum'. Gnosis later announced to support the OpenEthereum client. Ethereum Foundation has funded $150,000 to manage the project. OpenEthereum works towards becoming an efficient and fast client for the Ethereum mainnet.
Gnosis is actively engaged in building new products apart from developing its core prediction market. These are Reality.eth that aims at providing a solution to the oracle problem and Kleros (an open online dispute resolution platform for cases that cannot be resolved by the traditional court system).
Governance has always been the most important topic of co-founder Vitalik Buterin’s conversations. In a discussion with Vitalik, economist Tyler Cowin endowed his trust upon Vitalik’s vision and said, “ I think governance and institutions are winning in what is winning and you (Vitalik) are part of it.”
- OpenEthereum - the revival of Parity Ethereum in 2020
- Future of Prediction Market with Augur
- Blockchain governance: a great virtue and a problem!
- Ethereum Blockchain - Berlin Upgrade
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