Gnosis Launches New Protocol for Decentralized Ethereum Negotiations

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Important facts:
  • The protocol can be tested using the decentralized mesa application integrated in Gnosis.

  • The system enables ring operations to increase liquidity.

Gnosis, a Predictive Markets platform, announced on April 15 that it would introduce a new protocol to improve trading opportunities.

As described in the company’s statement, the Gnosis protocol is designed to offer decentralized negotiations to users of the Ethereum network. With this in mind, they are ensuring that this new protocol generates a mechanism called “ring operations,” a system that, according to their explanations can improve the liquidity of tokens issued on the Ethereum platformand that can already be tested with Mesa, a decentralized application (dApp) that is integrated into the Gnosis protocol.

Mesa is a commercial interface that facilitates the creation of market strategies Stable coins in the Gnosis protocol, depending on what the scripture adds. Thanks to the liquidity provided by the dApp, “Users can be market makers for cryptocurrencies that are anchored in the Gnosis protocol, while maintaining liquidity and competitiveness.”

One of the most outstanding features of Gnosis is that the new protocol is so decentralized that users can create data on it. In this context, they point out that it is a serverless design guarantees that the protocol is always available. Since it has no owner, its order processing process does not depend on any operator. This means that anyone can list tokens or make smart contract integrations.

On the other hand, the system should act as a decentralized exchange platform (DEX). This was done with the aim of creating an improved core infrastructure for trading in the Ethereum network. Already at the end of 2018, CryptoNews reported one of the first Gnosis protocols, a DAO for its DutchX protocol, which wanted to create a decentralized trading platform for Ethereum users, which was started in its pilot phase in October 2018.

Gnosis proposes ring trade operations

Example of an order book in the Gnosis protocol that enables the exchange in rings. Source: Gnosis

The operation of ring operations is simple. What Gnosis is looking for is handle all orderswithout having to rely on a single exchange pair. For example, in order to purchase DAI, a user may have to trade two different pairs of exchanges to obtain the cryptocurrency. With the Gnosis protocol, the user can directly record the desired cryptocurrencies without having to carry out more than one transaction.

This is possible because the protocol takes into account all exchange parities available on the platform. When one or more users place market orders with different currency pairs, the protocol selects the solution for the processing of ring trading orders in order to maximize the well-being of the trader and to provide uniform compensation prices.

The Gnosis protocol calculates a rate of 0.1% of the volume traded. All fees are converted to OWL, a token generated by blocking the Gnosis token (GNO). 50% of the fee is paid as an incentive to the provider of the settlement solution of the created order, and the other 50% of the fee is burned after the process is complete.

The prices serve as an incentive for open competition on the platform. Each user can submit an order processing solution for each auction lot and be rewarded. In addition, it is expected that this will bring added value to all GNO token holders.

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