Ethereum DApp Creators // Issue #07 Gnosis
Patrick Long from WeTrust talked about financial inclusion and personal finance on Issue #06 of the Ethereum DApp Creators series. You can read that and all the previous issues of the series along with our Ethereum Contributors Series at https://blog.status.im
This issue will be dedicated to prediction markets with Martin Köppelmann from Gnosis. We’ll talk about what Gnosis is, how it works, and what apps are being built on top of it.
This interview series is about the people who work hard to develop decentralized applications on top of Ethereum.
Gnosis beta running on Status alpha version pre-0.9.6. Click here for HD version.
Hello Martin, could you in your own words summarize what Gnosis is for those who aren’t familiar with the project?
Prediction markets at its core are very simple small financial instruments. You create tokens and they will have a specific value IF some real world event happens. However — the range of applications is endless and you discover more every day you spend time thinking about it.
They can create a better informed society, better decision making and therefore higher efficiency in almost everything. They could become a elemental building block for coordination in society. Therefore they should not be controlled by any central party and a blockchain is the right place to execute them. Gnosis tries to build a platform and many tools to make this huge range of applications a reality.
What about you, how did you get involved with Ethereum?
I got excited about Bitcoin a long time ago and mainly in excitement about Bitcoin we started to build something for Bitcoin — a prediction market (which is now still live as the biggest Bitcoin prediction market/betting exchange).
However — here we used Bitcoin only as the currency. The logic of the prediction market was fully centralized and we had to keep funds in custody. We always wanted to build something fully decentralized and when we learned about Ethereum we started from scratch with the experience of building it for Bitcoin. We started as early as December 2014 to build Gnosis.
What kind of benefits does Ethereum bring to Gnosis?
Gnosis is meant to be a platform so we want third party developers to build on Gnosis. If we would offer a centralized service they would have to trust us and also get dependent on us. In that sense Ethereum protects a third party developer from a future version of us. Instead Gnosis will be a open platform and allow permissionless innovation.
And what is your role at Gnosis?
I am the founder and CEO of Gnosis. In the beginning I was heavily involved in coding and architecture of the platform — almost all of the Solidity code which is the foundation of Gnosis was written by me and Stefan over a year ago. Over time my role has shifted towards management tasks.
I am responsible for the direction of the platform. What partnerships do we make. Who and how many people do we hire. What is the roadmap for a “go to market” strategy. What is our legal strategy. But I am still likely to be involved in technical design decision and everything related to game theory and token economics.
What is the long term vision for Gnosis that you’re working towards?
Markets are more efficient with more liquidity. Gnosis wants to set a standard for predictive assets to allow a global liquidity pool on a blockchain. In addition we want to make tools to make it as easy as possible to build a wide range of applications that tap into this pool. We will build a few applications our self as well.
We introduce 6 example applications on Gnosis.pm. They range from a price discovery market for art pieces, over a financial application which will allow to make more fine grain trades on stocks (you could directly trade the future revenue of a company instead of just the stock), over gambling, celebrity gossip, parametric insurance to decision markets.
The first application we will build is called GnosisAMA — it will be a tool for everyone to ask the market to give you are forecast about anything — e.g. when does Ethereum implement POS. You will need to fund an automated market maker which will offer a price (a forecast) and therefore incentivize everyone in the world who believes to have better knowledge about this forecast to trade against the automated market maker and thereby make their private knowledge public. We expect to release this application in Q4 2017.
At this point we are still flexible what we will do ourselves and what 3rd parties do. For all of those example applications we have 3rd party team that signaled some interest. We think the range of applications is endless so we welcome every 3rd party team to build on Gnosis and we will try hard to make this as attractive as possible.
How does futarchy come into play with Gnosis?
Futarchy or decision markets are one of the many very interesting applications of prediction markets. They basically ask the question — how would the market react if a specific decision would be made. They could fundamentally change the way decisions are made by gathering and aggregating the information of everyone instead of a small number of deciders.
You guys will be running a hackathon later this year, what are your expectations for that?
I am sure applications will come up we have never thought of. Already today it ranges from predicting the price of an artwork, celebrity gossip, over an insurance against flight delays to a mechanism to decide when to fire a CEO (futarchy based). A few days after we released a early first version of our platform someone was interested to use Gnosis to engage his readers of his new comic. Those kind of unexpected usecases I am looking forward to most at a hackathon.
What can you do with your technology right now and what are the challenges on scaling in the future?
In principle you can do everything already today. But at a very basic level. We are maybe where Ethereum was when Frontier started. In theory the foundation was there in practice, but quite a bunch of tools were missing to build real DAPPs.
Right now we have a handful of markets live predicting for example things like a potential Bitcoin hardfork, whether or not Litecoin will activate Segwit or the outcome of our token auction. One neat detail is that we also have markets on whether or not we will reach specific milestones of our roadmap in time.
What about mobile and smartphones, do you see that Gnosis has use for these?
Of course — we want to have a really easy user interface where you can just swipe through markets and tap “higher” or “lower” to make a prediction. We are really excited that Status brings this idea a lot closer to reality!
You ran a bug bounty program earlier, did anything big come up there?
Fortunately only minor findings that suggested a more clear code.
You have a on-going public beta, what can people use Gnosis for right now?
We have a few markets already today live at: admin.gnosis.pm — we just recently added a market that predicts whether or not Litecoin will activate Segwit. In addition we have a few markets live on our own upcoming token auction.
Is there a level of technical knowledge required by the end-user in order to use Gnosis?
At the moment of course. Very soon it will literally as easy as tweeting “higher” or “lower” in response to a forecast. We have already a working prototype for this.
Thank you for the interview Martin, best of luck to you and everyone at Gnosis.