The ethereum-based, decentralised prediction market Gnosis’ ICO has concluded in less than 15 minutes – despite having an innovative mechanism designed to discourage the kind of rampant speculation that has defined recent ICOs.
The quarter of an hour sale ended with the creators owning 95% of the funds, worth more than $280 currently.
Just 5% of the project’s tokens sold for a combined $12 million.
Gnosis’ network is now in beta stage. The company’s platform will allow users to create decentralised, P2P prediction markets that aggregate various information sources to predict market movements in any market, from insurance to financial instruments.
There is no fund custodian on the Gnosis platform. Once shares are purchased they are held in smart contract market makers, which then pay-out direct to users via the shares if they win.
Designed to be different
What makes this so interesting is that the Gnosis token sale was specifically designed to be different from recent ICOs.
Other ICOs usually run for a set period of time (generally 30 days) and the rate of conversion decreases over that period. The amount of tokens created is often dependent on the amount of cryptocurrency sent in.
In a recent blog post, Gnosis chief strategist Matt Liston wrote:
“This model causes friction for purchasers in that they are compelled to purchase app tokens earlier than they feel is justified for fear of price increases. The uncertainty in token creation may also potentially lessen the utility of the app tokens themselves.”
The Gnosis launch saw 10 million tokens being created and a percentage being distributed through the token launch. The launch ends when either $12.5 million worth of tokens or 9 million individual tokens are sold.
The price of the tokens was determined by a falling price specification. The price decreases for every block that elapses during the launch, meaning the price per token of the final block is the price that everyone pays.
Token launch participants essentially committed to paying a top price, but in fact payida lower amount then that. The mechanism was also designed to decrease the share of founder funds, which does not appear to have happened.