One of the earliest builders on the Ethereum network, Gnosis, announced the launch of the cryptocurrency industry’s first decentralized prediction market-driven collective — GnosisDAO.
Prediction Market for DeFi Governance
Traditionally, a prediction market is a form of exchange-traded markets where a group of people predict the outcomes of a variety of events and bet on those predictions.
The decentralized prediction market by Gnonsis aims at decentralized governance and technical layers of the web3 ecosystem. Within the GnosisDAO, the prediction markets will be created using the Gnosis Safe Multisig platform, which will initially be funded with 1,000 ETH and 20,000 GNO. Later, the company aims to fund the DAO with 150,000 ETH and eight million GNO.
The concept of GnosisDAO strictly aligns with the principles of prediction markets outlined by one of its strongest advocates and economic researcher Robin Hanson. At the core, the GnosisDAO aims to decentralize the decision-making process by taking away the power from centralized entities and distributing it across a network of people.
Testing the Limits
As the company outlines it, GnosisDAO will potentially test the limits of what the world’s first decentralized and permissionless prediction market-driven collective for resource allocation can achieve.
Martin Köppelmann, the CEO of Gnosis, told that GnosisDAO would initially use Gnosis prediction market technology to transparently guide decisions on development, support, and governance of their token, further adding:
“It could grow to guide the organizational development of decentralized finance. Since all of the technology underlying GnosisDAO is open source and easy for other organizations to use, it could create a pattern for organizational and corporate governance for the decades to come.”
The DAO may set new precedents for “futarchy” (governance by prediction markets) in a decentralized context, he stated.
Previously, the Gnosis team has been involved in the creation of Omen Prediction Markets that saw a whopping $1.24 million of DAI placed in the market predicting the outcome of the U.S. presidential election.