What is Gnosis? Inside the Ethereum Layer-2 Blockchain Infrastructure Developer

With over 200 projects in its ecosystem, Gnosis has helped shape Ethereum's development since 2015. Here's how it works.

Gnosis is a decentralized platform built on Ethereum, primarily focused on prediction markets, Decentralized Finance, and secure digital asset management through a multi-signature wallet, Gnosis Safe.

Launched by Martin Köppelmann, Friederike Ernst, and Stefan George in 2015 as a prediction market platform on the Ethereum blockchain, Gnosis has since expanded into a broader blockchain infrastructure ecosystem.

Gnosis has become a major player in the blockchain industry, with 300,000+ validators, making it one of the largest projects to come out of the Ethereum network. The ecosystem's native token, Gnosis GNO, peaked at $644 in November 2021. By April 2024, Gnosis had surpassed 200 million transactions.

"Passing 200 million transactions underscores the growing adoption and real-world applications of Gnosis Chain, affirming our path towards realizing Gnosis 3.0, which aims to bridge the gap between blockchain technology and real, everyday applications for the masses," Gnosis co-founder Martin Koppelman said in a statement at the time.

The Gnosis ecosystem includes:

Gnosis Chain - a sidechain used for verification.

Cow Swap - a decentralized exchange.

Coincidence of Wants (CoWs) protocol - matches users whose transactions on Cow Swap complement each other.

Gnosis Pay – a crypto credit card.

Secure – a crypto wallet.

Gnosis is also one of the first projects supported by the Ethereum-focused incubator ConsenSys (which incubated Decrypt before splitting off in 2022). This article examines Gnosis’s development, core technology, and role in the Ethereum ecosystem.

What is Gnosis?
Gnosis is a layer-2 solution for the Ethereum blockchain designed to address scalability challenges in the Ethereum ecosystem.

As an Ethereum sidechain, Gnosis is designed to provide faster and more affordable transactions. In addition, Gnosis has evolved to incorporate a variety of features, including a prediction market and a multi-signature wallet that requires multiple private keys to authorize transactions.

Prediction markets allow users to trade stocks based on the outcome of future events, such as elections, sports results, or market trends. In blockchain versions of prediction markets, oracles help by pulling real-world data onto the blockchain, ensuring accurate results, and resolving disputes.

Prediction markets are considered a major use case for blockchain, and as a pioneer, Gnosis faced stiff competition in its early days.

“At the time, prediction markets were a major topic in blockchain. Our main competitor, Augur, had done the first ICO, raised about 5% of the Ether supply, and became a major Ethereum application,” Stefan George, co-founder of Gnosis, told Decrypt. “We saw an opportunity to compete and build something better.”

Gnosis’ flagship dapp, Gnosis Olympia, launched in December 2017 as a beta version of Gnosis’ prediction market. It allowed users to explore decentralized betting without taking on any financial risk. Participants received free Olympia tokens (OLY) for betting, and successful predictions earned Gnosis tokens (GNO). While Olympia offered a fun way to experience prediction markets, Gnosis took it offline.

Gnosis is Greek for “knowledge,” or spiritual insight gained through direct mystical experience.

Looking back, one of the biggest challenges Gnosis faced, George said, was timing.

“It was early, and prediction markets struggled with adoption, not just for Gnosis but also for Augur and others who tried to adopt them at the time,” he said. “Meanwhile, the infrastructure we built to support prediction markets, such as exchanges and wallets, took off and became the primary focus.”

Over time, Gnosis has evolved beyond prediction markets into a comprehensive decentralized ecosystem designed to facilitate secure, transparent, and efficient decentralized applications as well as essential financial infrastructure on Ethereum.

History of Gnosis

January 2015: Gnosis is founded as a decentralized prediction market on Ethereum.

April 2017: Gnosis raises $12.5 million in a 10-minute ICO.

December 2017: Gnosis launches Olympia, a beta version of its prediction market application.

April 2020: Gnosis Protocol launches, introducing a new decentralized exchange mechanism.
November 2021: Gnosis Chain launches after merging xDai and GnosisDAO.
April 2021: Gnosis Protocol v2 launches, introducing CoWSwap.
December 2021: Gnosis Beacon Chain launches as a decentralized exchange