Gnosis (GNO)

Gnosis

Total supply	Total Supply: 10.000.000 GNO Circulating Supply (2-7-2017): 1,104,590 GNO

Basics

• Based in: Gibraltar and Berlin
• Started in: 1-2015
• Blockchain group which develops different sets of products. Started out with a prediction market, but is now (7-2020) most famous for Gnosis Safe, which is used by many of the biggest ETH projects.

 History

• From The Defiant (7-12-2020) with Stefan George:

"I got into blockchain already in 2013 when Martin, my cofounder, we started a company based on Bitcoin. That time, we created basically a prediction market for Bitcoin. Then in 2015, we realized that Ethereum has better capabilities to actually offer this fully decentralized, and we met Joe Lubin from ConsenSys, and Joe convinced us to do this as part of ConsenSys.

The next two years, we developed the core Gnosis protocol for prediction markets, and then 2017, we had the opportunity to spin off from ConsenSys, and we did an ICO. We raised $12.5 million in Ether, which was very fortunate timing. At the time, Ether was just $50 and we did treasury management well. As Ether increased, suddenly, we had much more money available for us to build the company. That's why we started building a bigger team that allowed us to do a lot more. 

We started, even as part of the ICO itself, to create a multisig wallet, which then turned out to become the standard wallet for securing funds on Ethereum. Because of all the other ICO projects that followed 2017, they basically all use this multisig wallet, and so basically, we then started in parallel to continuously develop this multisig wallet, which turned into the Gnosis Safe, which is now kind of the standard for fund management on Ethereum. 

But we also obviously continued with prediction markets. We, developed together with DXdao, the prediction market called Omen, which went live this year. We also looked a lot into the market mechanisms that are needed to actually trade the assets in prediction markets. So basically, we thought about automated market makers very early on, and one of our developers actually came up with the automated market maker design, which later on was utilized in Uniswap, and Balancer. So for us, it was just a research topic that we just did, and we even implemented it. It's even on our GitHub. But we never saw the potential success of it, so we just basically put it aside as we saw the flaws of those automated market makers designs in terms of capital efficiency, and potential front running issues, so what is now called miner extractable value. We saw those issues already at that time. We did not think that this is actually a concept that would actually be very successful, and instead, we were focusing on more advanced mechanisms, like batch auction designs, and that's basically what Gnosis protocol is today. A way to exchange tokens that is also resistant to mine extractable value, and also has significant advantages in terms of capital efficiency."  

• The project started in January 2015 as one of the ventures at Consensys. Last year its second proof of concept was released. Is part of Consensys Labs portfolio (7-2019)
• “GroupGnōsis (Gnōsis) is a fully-featured service platform that enables complex predictions to be made easily. It allows users to buy and sell shares in the outcomes of future, arbitrary events. Gnōsis serves as the backbone for a variety of forthcoming projects involving the development of information aggregating wisdom markets, risk hedging, information trading, decision making, and financial markets. The core of Gnōsis is a set of interacting blockchain-based smart contracts. A generic front end is available with which to create prediction markets, and specific, topical front ends are in development. Data is sourced from an independent entity, Fact Server, to decide the outcome of propositions.”

Audits & Exploits

• Bug bounty program can be found here. Max payout is $100,000 (29-6-2020).
• Blockchain Security DB (29-6-2020) shows 4audits. The latest was in 11-2019.
• Gnosis Safe scored a 95% on DeFi Safety (23-2-2021); "Near perfect testing and audits. It should be as safe a "safe" as we can make."

Governance

dxDAO

• From this Twitter thread (1-1-2020):

"We launched dxDAOs with over 400 unique addresses participating and gave it control over DutchX.

The dxDAO has a small but active community now and I expect some exciting proposals for dxDAO early 2020. The DutchX protocol itself failed expectations and is not much used yet."

GnosisDAO

• Gnosis (Protocol) DAO. From the announcement of V2 (23-11-2020):

"A DAO plays multiple roles:

1. Appoint and dismiss solvers
2. Enforce the correct behavior of solvers by imposing appropriate measurements
3. Manage solver fee allocation and distribution"

• From their blog (23-11-2020):

"The first proposals to GnosisDAO include distributing GNO to active participants, introducing a SAFE Token for governance, and developing Gnosis Protocol.

Every proposal begins as a post on the Gnosis Forum, and every successful proposal must pass through three phases. For each proposal in the final phase, prediction markets will surface the projected price impact on GNO if the proposal is accepted. In practice, this means two prediction markets corresponding to the proposal will be funded by GnosisDAO:

1. Prediction market on the proposal collateralized in GNO
2. Prediction market on the proposal collateralized in a stablecoin"

Treasury

• From their blog (23-11-2020):

"After initialization, GnosisDAO is to have effective control over:

150k ETH (~83% of the current ETH treasury)

8M GNO with an 8-year linear vesting period to maintain a predictable supply (~93% of the current GNO treasury)"

Token

Utility

• From their forum (23-11-2020):

"Eventually, becoming a solver will be open to the public as a permissionless GNO staking mechanism, and the DAO will operate a fee management system that converts some fraction of the collected fees into GNO and burns this GNO."

Token Details 

• From their website (13-1-2020):

"GNO is the native token of the Gnosis ecosystem. Its primary use is to generate OWL tokens. GNO has a fixed total supply of 10 million tokens and is tradable on several major exchanges.

OWL tokens can be obtained by locking GNO in a smart contract. Once generated, each OWL can be used to pay 1 USD in fees on our platforms."

• From their blog on use cases (2-4-2019):

"OWL is an ERC20 token that can only be created by locking GNO.

1. Paying half of a liquidity contribution when trading on the DutchX protocol
2. Paying Ethereum transaction fees using the Gnosis Safe wallet"

GPT

• From Paradigm (28-9-2021):

"The team are proposing to launch the GPT governance token. They consider the GPT as an essential tool to ensure the Protocol is not captured by rent seeking players, that it stays neutral and true to the values and needs of its traders."

Coin Distribution

• From their forum (23-11-2020):

"Gnosis Ltd. is already a big GNO holder (~100k GNO) + 500k vested over the next 5 years."

Tech

• Whitepaper can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on: Ethereum

Their Projects

• Has multiple projects running.

Balancer Gnosis Protocol (BGP)

• From Crypto Briefing (28-4-2021):

"Balancer and Gnosis are launching an Ethereum-based DEX called the Balancer-Gnosis-Protocol (BGP). Through combining (28-4-2021) Balancer V2’s Vault system with Gnosis’ price-finding mechanism, the new DEX aims to protect traders from MEV."

CowSwap

• CowSwap is a DEX which uses Gnosis Protocol V2 Solvers.

Custom Market Maker

• From Yield Farmer (12-12-2020):

"The Gnosis team explores its new market maker tool that functions through a combination of the Gnosis Protocol DEX and the Gnosis Safe Multisig."

dFusion exchange

• Had (1-1-2020) a 'silent' launch. It is running on mainnet.

Oracle method being used

• From this Tezos forum (30-4-2020):

"Dfusion is a decentralized exchange that uses batch auctions and a multi-dimensional order book to set prices for asset pairs. Unlike Constant-Function Market Makers or traditional exchanges that maintain separate liquidity pools/order books for individual asset pairs, Dfusion aggregates all orders into a single multi-dimensional order book that consists of multiple different token pairs. It then uses a time-based batch auction to set cleaning prices for each token exchanged in a batch. Batch auction settlement prices can be used as an oracle service by projects seeking access to an on-chain oracle service.

Dfusion’s settlement times occur approximately every 5 minutes. All orders submitted before a batch is settled can be included in the final settlement. The auction accepts settlement proposals from anyone. Solutions are simply checked for validity and if they are ‘better’ than existing solutions. If a solutions is judged to be ‘better’ than another, it replaces the previous solution. All trades are finalized after 5 minutes."

DutchX

• DutchX is a protocol used for trading tokens.

DXdao

• DXdao is a DeFi oriented DAO

Erigon

• From Paradigm (8-6-2021):

"Gnosis client development team joins Erigon (formerly Turbo-Geth) to Release Next-Gen Ethereum Client: While putting greater resources toward this effort, Gnosis will deprecate the OpenEthereum legacy codebase and work on a migration path for all existing users."

Gelato

• Allows (5-2-2020) users to create a personal bot that automatically interacts with different applications on Ethereum.
• Grew into the Gelato Network.

Gnosis Auction

• From The Defiant (7-4-2021):

"Gnosis Auction, a tool intended to solve initial price volatility for new ERC-20 tokens. Gnosis Auction combines batch auctions with limit orders. Projects launching new tokens will be able to use Gnosis Auction to set up batch auctions, where founders set the lowest price they’re willing to sell their tokens for, and bidders set a maximum price. When the auction ends and the price settles, any bidders within range will have their sales cleared for the same price. Using this method, Gnosis aims to eliminate frontrunning and “gas wars” from new ICO launches."

Gnosis Protocol (DEX)

Basics

• From DeFi Rate (15-4-2020):

"A fully permissionless DEX that enables ring trades to maximize liquidity.

Gnosis Protocol leveraging five minute batched auctions, with unsettled orders from a current batch being passed to the next batch. While this means that traders will suffer longer wait times and that they are not guaranteed to settle, the theory is that there is no need to worry about slippage as the trade will only be filled if the right buyer comes to the table.

“Gnosis does not plan on winning the market by providing faster settlement experience: rather, it aims to appeal to larger traders and compete with other DEXs on price.”

Gnosis suggests this strategy is beneficial for protocols which rely on liquidation auctions – particularly in the instance of illiquid trading pairs in which solvent markets do not currently exist. With roughly $2M in cumulative volume during its private beta, it’ll be interesting to see if this designer garners attention from the very players it’s targeting.

When looking deeper into the volume, we can see that the largest liquidity pools are currently in stablecoins Dai, USDC and sUSD – signalling that most traders are likely to use Gnosis Protocol when looking to convert a niche asset directly to a stable value with minimal slippage."

Mesa

• Mesa platform is the front end for Gnosis Dex, and has been used by (16-7-2020) mStable to launch their gov token.
• Gnosis is thinking of building an IDO specific DApp together with DXdao (12-2020).

Kleros

• According to their blog (23-11-2020) they have supported Kleros' their infrastructure.

Omen

• From its announcement (1-7-2020):

"Is a decentralization maximalist prediction market platform launched, maintained, and governed by the DXdao. The DXdao built Omen on an open framework developed by Gnosis for prediction markets."

OpenEthereum

• Look above at Erigon.
• From Daily Gwei (8-7-2020):

"The Ethereum network is now being dominated by just 1 client - Geth (77%). This is the client that the Ethereum Foundation maintains and is arguably the most battle-hardened one that we have today. It wasn’t always this way though - traditionally, Geth and Parity Ethereum shared a mostly even split of the network but a few months ago Parity announced that they were transitioning their clients ownership and maintenance to a DAO called OpenEthereum. This caused many people to shut down their Parity Ethereum nodes over the last few months which led to Geth growing to account for 77% of the network. Since then, Gnosis has taken the lead on developing OpenEthereum and has hired people to continue working on it internally."

Reality.eth

• According to their blog (23-11-2020) they have supported Reality.eth' their infrastructure.

Safe

Basics

• Fund storage and create a multisig wallet.
• Gnosis Safe Multisig supports ETH, ERC20 (Tokens) and ERC721 (Collectibles).
• "Supporting Arbitrum, Polygon, and BSC within the next 2 months" (12-5-2021). Got deployed on Avalanche, Optimism and Fuse (12-2021).
• From this Twitter thread (1-1-2020):

"We made significant changes to the Safe strategy. We will turn Safe into a platform, which will allow implementing different recovery mechanisms and other functionality as modules. The mobile version and the web version will be merged into ONE product."

Token

• On the Gnosis forum someone proposed spinning off Safe and creating the safeDAO with a SAFE token, 91% of people voted in favor on the poll (9-2-2022).

Snapshot Merger

• From The Defiant (19-3-2021):

"Gnosis has merged its multisig wallet, Gnosis Safe, with the off-chain (and therefore gasless) DAO governance dashboard, Snapshot, to create SafeSnap as an addable module for Gnosis Safe. Gnosis’ newly launched DAO governance tool, SafeSnap, aims to allow users to execute decentralized governance decisions without incurring expensive gas fees on-chain."

Usage

• From this Twitter thread (3-1-2020):

"Starting 2020, here's the @gnosisSafe in numbers:

~ 1600 Safe contracts deployed

~ 45k $ETH stored (~ 6M USD)

~ 8k transactions made "

• From Decrypt (24-8-2020):

"Now stores more than $1 billion in ETH and ERC20s."

Safe Apps

• From EthHub #112 (5-5-2020):

"Safe Apps allow users to interact with Ethereum applications straight from the Safe Multisig interface. Users are able to customize their own interface by selecting from a list of apps. If an app is not listed in the UI by default, it’s possible to add a custom app by simply putting in the link to that app. Once apps are added, interacting with them will feel like executing any other multisig transaction. If your Safe has multiple signatures required to execute a transaction, those same requirements apply to Safe Apps."

Possible Exploits

• Gnosis Safe Multisig wallet can be back-doored during deployment according to OpenZeppelin.

Partners

• Used by and partners with Authereum (12-2-2020).

Sight

• From EthHub #86 (4-11-2019):

"Sight is a prediction market launched by the Gnosis condition token framework."

"We offer markets with DAI using our implementation of the LMSR automated market maker."

• Sight launched (10-3-2020) regulated political prediction markets. Offering tiered KYC.
• Is using (8-6-2020) Codefi Compliance of Consensys to enforce its KYC.

WIZ

• Participants of the Services and Applications layers will be charged fees collected in BTC, ETH or Wisdom Tokens (WIZ)
• ICO participants will buy GNO tokens, which serve no purpose except to generate another set of tokens, WIZ tokens. In order to do this, the GNO tokens must be locked in smart contract; the longer they’re locked the more WIZ you get. WIZ tokens can be used to pay trading fees on the Gnosis platform.
• WIZ will be pegged to $1 worth of fees and can only be created using GNO tokens. A special utility will be developed to generate WIZ from GNO
• A fee reduction mechanism is designed to encourage users to pay not in BTC/ETH, but in WIZ, to ensure the liquidity

xDai

• According to their blog (23-11-2020) they have supported xDai' their infrastructure.

Roadmap

• Can be found [Insert link here].Goals (2-1-2019) for 2019:

1. "Let the dxDAO control the DutchX trading protocol. #DAOnow
2. Launch a first version of our dFusion exchange.
3. Bring recovery to @gnosisSafe to make seed backups redundant.
4. Launch first prediction market (w. stable coin) integrated into our DEX."

Goals (1-1-2020) for 2020:

1. "Launch of dFusion exchange. Integration into other DeFi protocols.
2. Making Safe the standard for fund storage and enable extended functionality through modules.
3. Establish Conditional Tokens as a standard and get Sight ready for prime time."

• Gnosis Protocol V2 has been proposed (23-11-2020):

"Gnosis Protocol v2 is a DEX platform facilitating ERC20 token trading. The unique selling points of Gnosis Protocol are gasless order placement and the ability to match retail traders with each other, hence offering better prices than pure dex-aggregators.

With a very simple (Uniswap-like) UX, users will submit off-chain orders to an order service. An algorithm based on the number of orders and their timestamps will be used to split the users’ orders into distinct batches. Each batch of orders will be processed by several (competing) solvers. Each solver internally uses an optimization process to find the best uniform clearing price for orders from that batch. Solvers will then submit their clearing price along with the corresponding batch of orders to the Ethereum blockchain for settlement. The settlement can involve many on-chain liquidity resources such as Uniswap, Curve, Kyber, etc. If solvers are not serving in the interest of customers and calculate unbeneficial prices, they will be out-performed by other solvers. If they do not conform to pre-defined fairness criteria, they can even be slashed by a DAO, a decentralized entity governing the Gnosis Protocol."

Pros and Cons

Cons

• Has had stiff criticism of firm Arca, claiming Gnosis has not delivered its business plan (9-9-2020).

Competition

• Augur and Helena (which it is partners with)

• In contrast to Augur, Gnosis positions itself not so much as a generator or prediction market data, but rather as a platform for third party applications. Gnosis aims to provide external developers tools and libraries to encourage them to build their applications on Gnosis using the common liquidity pool. Another big difference is that Gnosis uses centralized oracle by default with decentralized failsafe versus a fully decentralized oracle in Augur. This should help to get prediction outcomes quicker.

Team, investors, partners

• George, Stefan; Gnosis Ltd CEO & co-founder, according to his Twitter bio also CTO “has a long standing positive reputation within the Ethereum community”. He designed the multi-sig wallet of Gnosis
• Koppelmann, Martin; Gnosis Ltd Director and co-founder “has a long standing positive reputation within the Ethereum community” he also co-founded the bitcoin prediction market fairlay.
• Liston, Matthew, chief strategist, also known as the augur founder
• The rest of the team joined it in 2015 or later and have no experience in blockchain projects outside their work for Gnosis. Their backgrounds are mostly in software development and consultancy, cryptography, or information security.
• Eric Connor; "Helping build products"
• Felix Leupold
• “Gnosis has a top-level team of advisors: Vitalik Buterin, Joe Lubin and Jeremy Millar from Ethereum and/or ConsenSys, and Robin Hansen, a prediction markets expert and the author of the Futarchy model.” Which is not suprising since Gnosis is a venture/”spokes” of Consensys
• In 1-1-2020 Stefan said Gnosis has a team of over 50 people.

• From their forum (23-11-2020):

"In the past, the main companies that build things around Gnosis have been: Gnosis Ltd (Gibraltar), Gnosis Service GmbH (Berlin) but also ConsenSys and https://protofire.io/"

Funding

• In 2016 they received a grant from the Ethereum Foundation to advance its research on Futarchy.
• Helped raise $2.5M for a relaunch of IDEX (4-8-2020).
• From CoinDesk (9-9-2020):

"The balance sheet has increased fivefold, as a result of ether (ETH) appreciating, leaving Gnosis with ample resources ($55 million worth of the second-largest cryptocurrency and $10 million of cash) to repay investors, Arca said."

• SushiSwap is giving developer grants together with Gnosis Safe, for the amount of $6k (4-1-2021).
• Matter Labs; according to Matter Labs, the founders and leadership of a bunch of DeFi projects, among which this project, joined in on the $50m raise for zkSync (8-11-2021).

Partners

• Has a Gnosis multisignature wallet, which was used by Golem in their launch
• Is a 'friend' of Polkadot
• Is part of the DAOstack ecosystem (still as of 20-1-2020) as is Polkadot
• Is partner with and client at Solidified
• Part of the WBTC community
• Is a partner of Helena
• Is a backer of MetaCartel DAO (as of 1-2020 on the website)
• Used by and partners with Authereum (12-2-2020).
• One of (23-3-2020) the customers of Dune Analytics.
• Has a partnership with xDai (17-9-2020):

"As part of the partnership, we’ve invested in the xDai Ecosystem Fund to become significant holders of the STAKE Governance token, with a lock-in period of one year. This investment, committed in part with the Gnosis GNO token, further aligns the objectives of xDai and Gnosis communities. In addition, we’ll bring our product suite to xDai, including deployments of:

1. Gnosis Protocol, a top-ten Ethereum DEX by volume
2. Gnosis Safe Multisig, a wallet holding more than $1 Billion in assets
3. Conditional tokens framework, built on by prediction markets Omen and Polymarket

We’ll also assist in deploying Omen prediction markets on xDai, support xDai in future releases of the OpenEthereum client, and back further development of the Burner Wallet, as well as other critical tooling that makes decentralized applications like prediction markets more accessible to users."

• Gnosis has proposed to make the partnership go further, by merging the two, creating Gnosis Chain (11-2021).