New GnosisDao Bets on 'Futarchy,' a Prediction-Market Governance Model

The newly launched GnosisDAO will allow Gnosis users to vote on platform governance and development.

AccessTimeIconNov 23, 2020 at 5:32 p.m. UTC
Updated Sep 14, 2021 at 10:34 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Gnosis, one of Ethereum’s earliest ICOs, is spinning up a DAO that uses a novel mode of governance you’ve probably never heard of.

The newly launched GnosisDAO will allow Gnosis users to vote on platform governance and development.

Gnosis CEO Martin Köppelmann told CoinDesk the DAO’s voting proposals "can be really wide-reaching: product roadmap decisions, treasury management, starting new ventures, funding public goods. DAOs open up a large space for collaboration and experimentation."

One of GnosisDAO’s key marketing points is its integration with the Gnosis prediction markets. Because any protocol change will have an associated prediction market where traders are betting on its impact, Gnosis users can judge a proposal based on the market’s attitude (whether traders overall think it’s good or bad for Gnosis).

Futarchy: Testing governance with prediction markets

This governance model, called futarchy, was formulated by George Mason University economist Robin Hanson. Futarchy proposes the efficacy of democratically elected officials or policies should be tested by prediction markets; in other words, prediction markets create a barometer for success or failure of policies, which voters can then consult to augment their decision-making.

“People can influence [a vote] with their trading decision. As a new proposal is on the table, people can already signal whether they would buy or sell the token (GNO) if the proposal was implemented. It is basically the most direct way to ask ‘the market’ for feedback on a proposal,” Köppelmann told CoinDesk.

Gnosis will bootstrap these markets using funding from Gnosis’ treasury of 150K ETH and 8 million Gnosis tokens (GNO). At launch, the Gnosis treasury will allocate 1,000 ETH and 20,000 GNO into the GnosisDAO’s prediction markets.

The DAO will launch with three proposals: one that creates a template for Gnosis Improvement Proposals (GIPs), one that establishes a governance token for the DAO called SAFE and one that distributes a one-time reward to early DAO participants.

Köppelmann told CoinDesk the votes are indeed weighted by "how many [GNO] tokens you have.” But voters can also ignore the prediction markets and vote however they want on a proposal.

Given that voters can go against the direction of the markets, GnosisDAO will be launching with a softer futarchy bent that may harden as the DAO grows.

“We are not going all in on futarchy on day 1,” Köppelmann said.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about