Gnosis Revival: How an Ancient Family in the Crypto World is Reborn?

Written by: 0xEliven

The early inhabitants of the crypto world are likely familiar with the name Gnosis. This spark that emerged during the chaotic era of cryptocurrency has long been known as a decentralized prediction market. However, when you visit the Gnosis website today, you will no longer find descriptions about "testing the market"; instead, you will see the following statement:

"Gnosis aims to establish new market mechanisms for decentralized finance. Our three interoperable product lines allow you to securely create, trade, and hold digital assets on Ethereum."

Indeed, Gnosis has undergone a transformation, expanding its business into broader areas such as wallets, decentralized exchanges, and public chains. In fact, what it takes pride in today is no longer Gnosis itself, but Gnosis Safe and CowSwap.

With the announcements of Gnosis Safe and CowSwap's plans to spin off from Gnosis and issue governance tokens, this low-profile builder in the crypto world has begun to attract more attention. What kind of projects are Gnosis Safe and CowSwap? Why did they choose to spin off? What other potential players has Gnosis nurtured? Starting from Gnosis's early story, we will explore this ancient family's map to find out.

Pioneers of the Ethereum Ecosystem

In July 2015, Ethereum launched its mainnet, marking the birth of the first smart contract public chain in the crypto world. In the following August, Gnosis released its beta DApp on Ethereum. Founded by Martin Koppelmann and Stefan George, Gnosis was one of the first projects supported by the Ethereum-focused incubator ConsenSys.

In April 2017, Gnosis raised 250,000 ETH through a Dutch auction in its initial coin offering, selling less than 5% of the total 10 million tokens, with the remaining 95% held by the team. This token issuance faced criticism from the community for its high user costs and the large amount of tokens retained by the team.

In the same year, Gnosis launched the beta version of its prediction market, Olympia, and in 2018, it released the official version, Apollo, along with the decentralized exchange Dutchx. By the end of 2018, Gnosis also launched the heavyweight product, the multi-signature wallet Gnosis Safe, while CowSwap became its youngest core product launched in May 2021. During this period, the crowdfunding platform Gnosis Auction and the governance tool SafeSnap were also introduced.

Looking back at Gnosis's history, it is evident that it has a strong affinity for decentralized exchanges. Despite the initial setbacks with Dutchx, it managed to make a comeback three years later with CowSwap.

Gnosis Safe and CowSwap are now the most prominent members of the Gnosis family, and we will focus on introducing the mechanisms and token models of these two projects.

Gnosis Safe: The Most Important Multi-Signature Wallet in the Ethereum World

Gnosis Safe is a smart contract wallet that supports multi-signature functionality, currently managing over $100 billion in assets. It is one of the most important asset management platforms in the Ethereum ecosystem.

Multi-signature, as the name suggests, involves multiple accounts jointly managing the funds of a single account. A multi-signature wallet is a type of contract account that requires multiple confirmations before a transaction is executed, defined in the smart contract as the owners of the multi-signature wallet. A transaction will only be executed when a predefined number of owners confirm it. Multi-signature wallets effectively mitigate the risks of malicious actions by a single manager and the loss of funds due to lost private keys.

The multi-signature feature of Gnosis Safe allows users to define a list of owner accounts and the threshold number of accounts required to confirm a transaction. Once the threshold of owner accounts confirms a transaction, it can be executed securely.

The way Gnosis Safe enables multiple parties to jointly manage account funds aligns with the principles of decentralized autonomous organizations (DAOs), with many DAO organizations, including AssangeDAO and ConstitutionDAO, using Gnosis Safe as their treasury management tool.

The growing prominence of Gnosis Safe has made it increasingly necessary for it to develop independently from Gnosis. As early as December 2020, the Gnosis community proposed creating a governance token for Gnosis Safe in a proposal. On February 9 of this year, Gnosis initiated another proposal to spin off Gnosis Safe and issue the SAFE token, GIP-29, which received a 91% approval rate in the vote. The proposal also disclosed more details about the token issuance.

Token Economics

SAFE will be used to manage the foundational components of the Gnosis ecosystem, including the Safe protocol, interfaces, and on-chain assets.

The total supply of SAFE tokens is 1 billion, which will be minted in a single batch by the Safe Foundation. The token distribution and release process is as follows:

* 15% allocated to core contributors
* 15% allocated to the Safe Foundation

* 10% for airdrops to ecosystem and community users

* 60% allocated to community treasuries, including the SafeDAO treasury, GnosisDAO treasury, and a treasury that combines both

Of the tokens allocated to the community treasury, the GnosisDAO treasury and the combined treasury account for 20% of the total, and these tokens will be used to reward GNO holders, with their usage decided by the Gnosis community.

The spin-off of Gnosis Safe and the token issuance are currently in planning, but they seem to be inevitable.

CowSwap: A Low-Fee MEV-Resistant DEX

CowSwap is a decentralized trading platform built on the Cow Protocol, characterized by offering MEV-free (Miner Extractable Value) and low-fee trading. As the extraction of MEV rapidly increases and Ethereum gas fees remain high, CowSwap will play an increasingly important role.

CowSwap avoids the most common AMM and order book matching models in the market, adopting a "demand matching" approach for trade execution. Specifically, "when two parties hold something that the other needs, they can trade directly without using currency as a medium."

On CowSwap, two parties holding assets that each wants can directly match trades without the need for a market maker. CowSwap allows users to trade directly using demand matching, and orders that cannot be matched through demand matching are then matched through an automated market maker (AMM).

CowSwap settles batch orders at a uniform price (if trades cannot be fully matched, they are settled at the AMM price), eliminating the issue of transaction ordering and fundamentally avoiding MEV while also reducing trading friction. The trading volume achieved through CowSwap has rapidly increased in the nearly year since its launch, currently reaching a total of $5 billion.

Token Economics

In September of last year, in GIP-13 Phase 1, Gnosis planned to spin off Gnosis Protocol and issue the GPT token. However, in January of this year, during GIP-13 Phase 2, Gnosis updated the proposal to rename Gnosis Protocol to CoW Protocol and issue the COW token.

The COW token will grant its holders voting rights in CowDAO, which aims to manage the infrastructure components of the Cow Protocol ecosystem, including system parameters, treasury assets, protocol revenue, and staking. COW holders can enjoy trading fee discounts by locking their tokens.

The total supply of COW tokens is 1 billion, minted in a single batch by CowDAO upon issuance.

* 10% allocated to Gnosis DAO, half of which will be unlocked linearly over 4 years;
* 15% allocated to the team;
* 0.6% allocated to consultants;
* 10% allocated to external investors;
* 10% for community airdrops (5% to early users and community members who contributed to the CoW protocol, and 5% to GNO token holders, requiring GNO tokens to be locked in the contract);
* 10% for community investment round allocation;
* 44.4% to the CoW DAO treasury

Currently, the Cow Protocol has established the decentralized autonomous organization CowDAO and initiated the airdrop claim for vCOW, which will be released linearly over 4 years. vCOW can be used for governance in CowDAO, and CowDAO's first proposal is to redeem COW using vCOW, which is still in draft stage.

Emerging Gnosis Auction and SafeSnap

In Gnosis's pioneering landscape, there are two less prominent seed players: the on-chain auction platform Gnosis Auction and the voting tool SafeSnap.

Gnosis Auction is a platform for fair, transparent, and decentralized price discovery, launched in April 2021 on the Ethereum mainnet and the Ethereum sidechain xDai. Gnosis Auction provides batch auction functionality, allowing anyone to auction ERC-20 tokens on Ethereum. Batch auctions are a fair pricing method that has been tested in traditional finance, including daily public auctions on the New York Stock Exchange, direct listings, and initial public offerings.

SafeSnap was launched in March 2021, combining Gnosis Safe with the decentralized governance platform Snapshot, allowing for on-chain execution of off-chain votes. The Ethereum ecosystem is gradually showing a strong trend toward decentralized governance, with off-chain voting and on-chain execution becoming the choice for many DAOs. Gnosis Safe is becoming the operating system for DAOs, and SafeSnap will drive this process.

Entering the Public Chain: From xDai to Gnosis Chain

In addition to actively building a series of Ethereum ecosystem applications, Gnosis has also expanded into the public chain space through a merger.

Gnosis founder Martin Köppelmann announced the plan to merge Gnosis with the Ethereum sidechain xDai in the GIP-16 proposal, outlining an ambitious technical roadmap. During the merger, the governance token STAKE of the xDai network will be exchanged for GNO tokens at a certain ratio, and the new chain will be developed under the name "Gnosis Chain."

Currently, the xDai brand has switched to Gnosis Chain, and the token swap for STAKE is ongoing. Low costs and Ethereum compatibility are the two main selling points, with Gnosis Chain using Rollup technology to reduce costs, aiming for decentralization, and planning to connect to the beacon chain after Ethereum 2.0 goes live.

Representative projects in the Gnosis Chain ecosystem include the universal basic income token Circles UBI and the Ethereum game dark forest. Circles UBI, launched by Gnosis founder Martin Köppelmann, is a "currency experiment" without investment value, while dark forest is an on-chain strategy game that incorporates the dark forest principle. Both projects received support and testing from Ethereum founder Vitalik Buterin at their launch.

Conclusion

Having outlined the landscape of this ancient family in the crypto world, Gnosis Safe and CowSwap are stepping onto their own paths, but the DAOs nurtured by Gnosis extend beyond just them. Earlier examples include DXdao, which aims to develop DeFi products through a decentralized organizational model. These DAOs maintain deep connections even after becoming independent, forming an important force in driving the evolution of the crypto world.

At the same time, protocol spin-offs are becoming increasingly common, as DAOs aim to be small and beautiful, while large organizations can only operate under corporate management structures. The future may be an era where numerous DAOs lead the continuous construction of protocols. Prometheus stole fire for humanity, and the spark has already become a raging fire.