A prediction market is similar to traditional exchanges. However, instead of trading on assets users bet on future outcomes. A prediction market connects buyers and sellers of contracts that pay based on the outcome of a future event. Prediction markets are essentially futures market but the point of interest is not the price of an asset but rather events. The demand for prediction markets has been on the rise and some advocates of cryptocurrencies believe the blockchain technology has the potential to decentralize prediction markets and make them more accessible and transparent. Gnosis is one such prediction market based on the blockchain technology. 

What is Gnosis? 

Gnosis was founded by Martin Koeppelmann and Stefan George in 2015. It is one of the first projects to be backed by the incubator, ConsenSys. It serves as the infrastructure for prediction markets. It is an open-source project based on the blockchain of Ethereum. Gnosis’s platform enables users to trade cryptocurrencies that represent future events in the open market. The tokens appreciate or depreciate according to the outcome of the event once it unfolds. 

Apart from being a prediction platform, Gnosis is also working towards developing key infrastructure for prediction markets. The network is building a platform for decentralized applications that can be utilized for forecasting, information and other essentials related to prediction markets. The aim of the network is to create a decentralized forecasting tool that can be used by the public as well as decision-makers. 

How does it work? 

There are three key instruments that help Gnosis achieve its goal:

• ïApollo – the prediction market – is the basis of the platform. Users utilize Apollo to create tokens that represent events. 
• ïDutchX is Gnosis’s own decentralized exchange where the tokens created are traded and auctioned off. 
• ïGnosis Safe is the network’s wallet as well as a browser that enables access to applications on Ethereum

Gnosis has two tokens, GNO and OWL, which ensures the reliability of transactions on the platform. OWL tokens are responsible for fee payment on the prediction market. It is a stablecoin with its value pegged to the US Dollar. GNO tokens are staked to generate OWL and are subsequently burnt. 

Gnosis also has three distinct layers which enables its working. The primary layer, Core Layer, comprises of the smart contracts for future events. It is followed by the Service Layer which is responsible for the fee model. It also offers services like chatbots, stablecoins etc. The final layer is the is the Application Layer which contains the decentralized applications built on the network.