Gnosis has been researching and developing decentralized trading protocols since 2017, bringing better ways to trade to Ethereum.
Gnosis Protocol V2 leverages batch auctions to offer MEV protection, plus integration with liquidity sources across DEXs to provide traders with the best prices.
MEV (Maximal Extractable Value) is a phenomenon currently capturing value of up to 1% of all DEX orders on Ethereum, with profits going from users to miners or other arbitrageurs. Through its batch auction mechanism, plus integration with liquidity sources across DEXs, GPv2 protects traders from MEV and guarantees they will receive the same price or better than other existing DEXs.
GPv2 will be released in three stages. Learn more in our post Introducing Gnosis Protocol V2 and Balancer-Gnosis-Protocol.
Coincidence of Wants
The protocol has orders settled in consecutive, recurring batches, limited in size only by the gas block limit. Each batch enforces uniform clearing prices, meaning all orders executed within a given batch receive assets priced equally against other orders.
The protocol facilitates coincidence of wants among traders, meaning that when two traders each hold an asset the other wants, a trade can be settled directly between them without an external market maker or liquidity provider.
The protocol addresses the MEV problem by leveraging its batch auction mechanism that enforces tight slippage and does not rely on relative ordering of transactions.
Launching in mid-2021, BGP combines the best of both protocols, with Balancer V2’s flexible liquidity pools enabled by a single-vault architecture and asset managers, in combination with Gnosis Protocol V2’s price-finding mechanism and MEV protection.
Launched in 2020, Gnosis Protocol V1 was the first-iteration DEX that enables ring trades to maximize liquidity.
Ring trades are order settlements which share liquidity across all orders, rather than a single token pair, and uniquely suited for trading prediction market tokens and the “long tail” of all tokenized assets. To learn more, read our blog post Annoucing Gnosis Protocol.