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Is Gnosis Safe actually safe and worth using?

Custodian for over a year

GnosisProtocol is a fully permissionless decentralized exchange (DEX) that seeks to maximize liquidity. The protocol also facilitates the construction of "new market mechanisms" for decentralized finance (DeFi). Since 2017, several Defi projects, including Ethereum's sister chain xDai, have used Gnosis. The multi-signature storage "safe," based on the Gnosis protocol, is a custodial platform for managing cryptocurrencies on Ethereum. Several large Ethereum holders use it. Developers exploring new ways to store crypto are also interested in starting.

Gnosis entered the custody scene just a year ago with the promise of upgrading facilities used to store cryptocurrencies. Its vault targets large cryptocurrency holders, such as stock exchanges and investment funds.

Are cryptocurrencies still decentralized?

The cryptocurrency custody industry is growing in tandem with the increase in the number of more oversized holders in the space. The increased interest in cryptocurrency funds and trading activity on exchanges provide some explanation for this growing need. Due to these trends, some community members are concerned that cryptocurrencies like Ethereum will lose their decentralization. Already, only ten exchanges hold 16% of Ethereum's supply. However, these addresses are smart contracts or storage addresses used by businesses. WrappedEther(WITH) is the largest contract on the Ethereum network. WITH allows the transfer of an ERC-20 token to decentralized or other DeFi applications. However, Ethereum recently launched its proof-of-stake consensus mechanism. Some in the crypto community now fear that Ethereum holders with the most liquidity will have the most influence. For now, that's not the case. But the custodial space is growing. Gnosis, among many others, wants to be the first platform these whales look to.

Why do we need Gnosis Safe?

To create a multisig wallet in Ethereum, you must build a smart contract that allows you to manage funds and that requires several signatures to be able to spend these funds. All these parameters can be configured, sent, and executed if you know how to program in Solidity, of course. But, unfortunately, what happens is that most of us don't know how to do it. For this reason, Gnosis Safe provides a platform with a friendly user interface so you can create, launch and run your smart contract in Ethereum, destined to be a multisig wallet.

Gnosis Safe received 1,500,000 ETH in a single transaction worth over $1.7 billion (at writing). This brought its balance to $2.3 billion in April 2021. Gnosis Safe is a platform for managing funds on the Ethereum network. This platform has a decentralized application for creating multisig wallets on the Ethereum network. It is also implemented for parallel networks such as xDAI.

Allow third parties to submit transactions: this is referred to as "metatransactions" in the industry. It supports "out-of-gas" transactions, in which the wallet or dapp pays the transaction fees to eliminate friction during use. Users might also pay transaction fees in ERC20 tokens, removing the need to keep ETH in their wallet at all times.

Interaction with other contracts has been simplified: several dapps require users to sign multiple blockchain transactions in a sequence in order to complete a single trading action. Because of the power of delegated calls, smart contract wallets can bundle them together, requiring the user to sign only one transaction.

What is the origin story of Gnosis Safe?

Gnosis created a ticketing system in 2016 in preparation for their own token sale. Gnosis wanted to build something that allows users to store funds in Ethereum securely and requires multiple signatures to authenticate transactions for an additional layer of security. These requirements sparked the development of Gnosis MultiSig. This multi-signature bill became the standard for collectively managing cryptographic funds, with over 2500 instances implemented (the top 25 accounts had a combined value of over 1.4 million ETH). The prediction markets remain Gnosis' core focus. Prediction market outcome tokens can gain a lot of value. Thus users need a safe place to keep them. Smart contract wallets, mainly multi-signature wallets, are ideal for storing and managing these tokens.

The Gnosis MultiSig smart contract was redesigned from the ground up with the following needs in mind as the ecosystem matured and gas costs became an important issue to consider when developing a dapp:

  • By using off-chain signatures instead of on-chain confirmations, Gnosis was able to save gas.
  • Upgrades using proxy contracts are possible.
  • Delegate calls allow you to add extensions to your base contracts.
  • More importantly, intelligent contract portfolios allow Gnosis to take advantage of several unique features:

Enhanced access control: instead of requiring only one signature to allow a transaction, the wallet can be set up to demand several signatures. Furthermore, transfer limitations could be set so that particular owners can only authorize transactions up to a given amount. Above all, Gnosis uses recovery procedures that go beyond backing up first recovery words.

Allow third parties to submit transactions: this is referred to as "metatransactions" in the industry. It supports "out-of-gas" transactions, in which the wallet or dapp pays the transaction fees to eliminate friction during use. Users might also pay transaction fees in ERC20 tokens, removing the need to keep ETH in their wallet at all times.

Interaction with other contracts has been simplified: several dapps require users to sign multiple blockchain transactions in a sequence in order to complete a single trading action. Smart contract wallets can bundle them together because of the power of delegated calls, requiring the user to sign only one transaction.

What advantages does Gnosis Safe offer to its users?

Gnosis Safe adoption by new users has been on the rise, with over USD 44 billion in Safes held and over 26,000 established to far. Gnosis Safe made it a point to react to requests for critical Layer 2 characteristics like low transaction prices and efficient throughput because there were more users and significant transactions than ever before. It plans to continue supporting the increasing sector of DeFi treasuries, which presently store USD 55 billion TVL, DAOs managing $838 million assets, and a broad spectrum of investors, institutions, projects, teams, and individuals by enabling interoperability with L2s spanning major networks.

Gnosis Safe hopes to catalyze a feedback cycle of acceptance and scaling apps available on various networks by making the platform accessible across chains. For projects that convert their dapp to a Safe App, launching on each chain entails establishing a chain-specific Safe App browser. For example, polygon, BSC, and xDai (and Arbitrum when it opens on mainnet) all have a thriving ecosystem of native and cross-chain dapps.

Conclusion: Is Gnosis Safe safe?

Gnosis safe seems to be a platform that offers trust to its users and investors, as it provides a set of features that definitely grant a sensation of stability when performing transactions in it, such as:

Allow third parties to submit transactions: this is referred to as "metatransactions" in the industry. It supports "out-of-gas" transactions, in which the wallet or dapp pays the transaction fees to eliminate friction during use. Users might also pay transaction fees in ERC20 tokens, removing the need to keep ETH in their wallet at all times.

Interaction with other contracts has been simplified: several dapps require users to sign multiple blockchain transactions in a sequence in order to complete a single trading action. Because of the power of delegated calls, smart contract wallets can bundle them together, requiring the user to sign only one transaction.

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