DEFINITION of Gnosis
BREAKING DOWN Gnosis
A prediction market offers a platform for participants to make bets on the outcome of an event, like a soccer match or elections, and benefit in case of favorable outcomes. The traditional prediction markets, like betting avenues, are created and controlled by intermediaries, operate opaquely, offer limited market information, and have a scope of mistakes and unfair practices.
Gnosis aims to bring transparency by building a highly precise prediction market using the “Wisdom of Crowds” concept. It leverages the cryptocurrency-based Ethereum blockchain which makes it free from the control of a central authority, and uses smart contract technology to ensure market predictions from large group of participants are recorded on the blockchain in a transparent manner, allowing for better predictions.
Along with forecasting and speculating on the derivatives-like markets that are linked to the outcome of specific events, Gnosis allows participants to create and fund the markets.
By cutting out the middleman, it offers significantly lower cost, and also rewards participants for correct reporting. Successful predictions and results reporting gets rewarded by GNO tokens, the cryptocurrency in the Gnosis network. Gnosis directly competes with Augur, a similar market prediction blockchain network.