Close this search box.

What is Gnosis Safe and how is it centralizing Ethereum?

What is Gnosis Safe and how is it centralizing Ethereum?

What is Gnosis Safe and how is it centralizing Ethereum?

Gnosis Safe has a monopoly on multi-signature smart contract wallets on Ethereum. According to Dune Safe’s team tally, in January 2021, users created an average of 120 of their multi-signature smart contract wallets (or “safes” as Gnosis Safe calls them) per week. Today, users create more than 1,000 vaults per week. Weekly transactions involving safes have also increased tenfold over the same period. Currently, vaults are valued at approximately $40 billion.

What is Gnosis Safe?

Gnosis Safe (now simply renamed “Safe”) provides an easy way to manage multi-signature wallets. As with most things on Ethereum, while it is technically possible to write the code yourself, almost everyone uses a service provider. Safe specializes in multi-signature smart contract wallets that not only store funds but also enable functions to be run on those funds. Multiple signature requirements can be attractive to organizations seeking protection against misappropriation of funds from  in a single signature wallet. Ethereum Virtual Machine (EVM) can work with most major EVM-compatible wallets, including ERC-20 and ERC-721 NFT tokens.

It may also charge on the Arbitum, Aurora, Binance (BNB) Smart Chain, Gnosis Chain, and Polygon blockchains. Big names using Gnosis Safe include ConsenSys, Aave, SushiSwap, and Ethereum Name Service (ENS). His Twitter account says the organization is migrating to a new domain due to its rebrand, but other moves include migrations from transaction services to Gnosis Chain on October 20 and Ethereum mainnet on October 24.

Gnosis Safe is one of several centralizing forces in Ethereum

Since Ethereum transitioned to a Proof-of-Stake (PoS) algorithm with its merger, concerns about centralization have increased. Even before the merger, most users interacted with Ethereum through a managed API, Infura, using a key manager, Metamask. refers to a block explorer, Etherscan. Going beyond centralizing the technology stack, PoS staking services are now centralizing the management of ETH itself. Liquid staking pools have outperformed the majority of Ethereum shares. and Lido: controls the private keys of the majority of ETH with liquid participation.

Gnosis Safe became one of the organizations contributing to the increasing centralization of Ethereum with its huge market share in managing multi-signature wallets.  Lido offers an APR denominated in 5.4% ETH for investors who don’t have the 32 ETH required to become their own validator. Lido currently controls $5.7 billion in ETH with liquid holdings, dwarfing its peers. Its closest competitor, RocketPool, has just $550 million. plus, StakeWise contains less than $100 million. Should the rogue admins of Coinbase, Kraken, and Binance ever work with Lido, these four key holders could sign for more than half of the total Ethereum stake.

Ethereum users can expect that no one can stop them from downloading a wallet using the seemingly decentralized Ethereum Blockchain. If a wallet is censored, they may try to download one wallet from another. However, MetaMask showed that this is not the case. Secure. Many crypto-enabled websites only connect to Metamask and do not support third-party software wallets. Metamask blocked users from Venezuela and Iran from using their wallet, indicating that a centralized party controls decisions for their software.

OpenSea also blocked Iranian users, shaking decentralization beliefs in the NFT industry. Gnosis Safe’s monopoly on multi-signature smart contracts became one of several centralizing factors in Ethereum. Safe provides valuable security for organizations concerned about potential theft of digital data. active. However, Safe also promotes the centralization of Ethereum.

Share to Social Media

Leave a Comment

Your email address will not be published. Required fields are marked *

Recent Articles

Join Our Newsletter