Hi Fintech Architects,
In this episode, Lex speaks Friederike Ernst, co-founder of Gnosis. Together, they explore the evolution of Gnosis from an Ethereum-based prediction market project into a major infrastructure provider powering over $100 billion in DAO treasuries and $10–15 billion in monthly DEX trading via CowSwap. Tracing the company’s journey from a 2017 ICO raising $12.5 million in ETH (now worth ~$450 million) to spinning out critical tools like Safe, CowSwap, and Zodiac, all originally built for internal use.
Despite their success, Gnosis recognizes that the crypto-native user base is limited and has now pivoted to building user-centric, mainstream products like the upcoming Gnosis App targeting Gen Z with real-world financial utility. The company emphasizes its founding mission of democratizing financial ownership and warns against complacency as incumbents like Stripe and Robinhood enter the space. Lastly, Gnosis sees a near-term opportunity in AI-agent driven commerce, especially through reverse advertising models that could unlock trillion-dollar markets.
Thanks for your time and attention,
Matt Low 🙌
Key discussion points:
The $12.5M ICO That Became a $450M Treasury
Gnosis raised $12.5 million in ETH during their 2017 ICO when ETH was trading at $40. Through conservative treasury management and holding their ETH position, that initial raise has sustained the company for nearly a decade and grown to approximately $450 million today. Friederike attributes this to “conservative treasury management and sheer luck” — a remarkable case study in long-term crypto treasury stewardship.
Polymarket Runs on Gnosis Infrastructure
Despite Polymarket’s $10B+ valuation and mainstream recognition, it still uses Gnosis’s conditional token framework that was written years ago. Friederike acknowledges being “a little salty” that infrastructure they built powers such a significant share of the on-chain prediction market economy without Gnosis directly benefiting financially. It’s a stark illustration of the “first up the mountain” dynamic where pioneers clear the path but don’t always capture the value.
The 19th Century German Banking Parallel
Friederike draws a compelling historical analogy: impoverished German farmers in the 1800s faced predatory moneylenders charging 25-40% interest. They responded by forming collective community banks, lending to each other at 4-6%. Within decades, tens of thousands existed, and one-third of Germans remain members today. She positions crypto’s ownership model as the modern equivalent — a cooperative financial revolution for a generation economically disenfranchised by incumbent systems.
Background
Dr. Friederike Ernst is a German physicist turned blockchain pioneer whose fascination with cryptography began at age 12 when she set up her own PGP server after reading Simon Singh’s The Code Book. She studied neuroscience at UCL before pivoting to physics, completing her PhD at Freie Universität Berlin in just three years researching carbon nanotubes.
Her postdoctoral career took her to Columbia University and Stanford, where she worked on low-dimensional quantum systems under a prestigious Leopoldina Fellowship, accumulating over 570 citations and receiving the 2016 Mildred Dresselhaus Award for promising women in science. In early 2017, while serving as a guest professor at Universität Hamburg, she made the unexpected decision to leave academia and co-found Gnosis alongside Martin Köppelmann and Stefan George, bringing her rigorous scientific training and German engineering mindset to help build what would become foundational Ethereum infrastructure including Gnosis Safe (now securing over $100 billion in assets) and Cow Swap.
Beyond Gnosis, she serves as Secretary-General of the German Blockchain Association (Bundesblock), co-hosts the Epicenter podcast, and co-founded Full Node, Europe’s largest blockchain co-working space in Berlin.
👑Related coverage👑
Topics:
Gnosis, Gnosis Safe, CowSwap, Zodiac, CPK, Polymarket, Kalshi, ConsenSys, Ethereum, ETH, AI, AI Agents, ICO, Onchain, Governance, Crypto Treasury, Web3, Blockchain, Finance, Banking, Payments, Custody, Wallets
Timestamps
1’25: From Prediction Markets to On-Chain Governance: The Gnosis Journey with Friederike Ernst
6’09: Early ICO Bets and Lasting Impact: How Treasury Design and Tooling Shaped On-Chain Governance
14’10: Owning the Problem: Turning Internal Crypto Tools into Customer-Facing Products
18’08: Beyond Crypto Natives: Building User-Friendly Blockchain Finance for the Next Billion
24’34: Beyond the Noise: Staying True to Web3’s Ownership Revolution
28’48: Culture as the Catalyst: Building User-Owned Financial Systems for a Disenfranchised Generation
32’59: Reinventing Everyday Banking: A Self-Custodial Money App for the Postbank Era
36’48: AI Agents With Wallets: Gnosis Chain as the Payment Rail for Autonomous Finance
39’49: Reverse Advertising: How AI Agents Will Turn Your Attention Into a Trillion-Dollar Market
Illustrated Transcript
Lex Sokolin:
Hi, everybody, and welcome to today’s conversation. We have a fantastic guest with us today, Fredrik Ernst, who is the co-founder of Gnosis. Gnosis is one of the earliest projects in blockchain with really interesting ambitions, starting from prediction markets, going to treasury management and then payments and many other things that have spun out from its foundation. So I’m really excited to trace that and then talk about where the future is going. So with that, welcome to the show.
Friederike Ernst:
Thank you for having me.
Lex Sokolin:
Let’s start at the beginning and the beginning for Gnosis in particular. What was the world like when you became the co-founder for the project, and what is it at the time that you were thinking of accomplishing?
Friederike Ernst:
It’s only ten years ago, but it feels like a lifetime. So kind of Gnosis was the very first to speak at Consensys. We joined Consensys when Consensys was Joe and his assistant in a midtown office before anyone ever moved to Brooklyn. My co-founder, Martin, met Joe at a Bitcoin meetup where he told him that Stefan and Martin. So my co-founders were building a betting platform on top of Bitcoin, and Joe told him of Ethereum and the wonders that would come to be. Back then there wasn’t even a white paper release. So kind of this was completely novel at that point, at that point. And kind of. Joe convinced Martin and Stefan to take this in-house at Consensys and start building an Ethereum based prediction market there instead. And that’s exactly what happened. They spent two years inside of Consensys at the point when they were ready to spin out. I joined them as a co-founder, and we embarked on this adventure to kind of build an aggregation layer for information. So this was before the term fake news. But back then, the idea was very much to distill the world’s information into a single number, into a single forecast for any given question. It was our mission to actually build that on chain.
Lex Sokolin:
I want to trace a bit the history of prediction markets, and maybe some of the almost science fiction background that goes with it. As I remember in that moment, we just had kind of pushes in machine learning and neural networks coming through. Ethereum had a strong positioning towards the future, is going to be full of robots, and they’re all going to, you know, interoperate and they can’t use squishy human data. They need numbers. And so, you know, prediction markets are going to be the capital markets of the future. And all information, you know, and here we are in 2025, as you say a decade later. And there are two very large prediction markets platforms in the US at least Cal XI and poly markets one of them natively crypto on EVM. The other one sort of has come into crypto, both in the 10 billion plus valuation range, with lots of kind of large financial institutional interest in it, which to me is still a big surprise.
So it feels like in this one decade we went from prediction markets or clunky and we’ll never work. And it’s so hard to. This is now part of Robinhood and all these fintechs and so on. But surely the story doesn’t start in in just a decade ago, like when you were building gnosis in that moment, was there a bunch of history that you were drawing on in a bunch of inspiration that said, this is where we need to go?
Friederike Ernst:
The idea of prediction markets was popularized by Robin Hanson in the 80s and 90s. He also came up with the super interesting concept of futurity, which is the idea that we should make decisions about the future and how to and govern ourselves by the results of prediction markets. Yeah. So kind of there’s been a treasure trove of preceding work that we obviously build on top off. If you look at the mindshare that prediction markets have today, it’s incomparable. So kind of in 2015, kind of people thought this was a cool idea. At some point there was I remember there was a CoinDesk survey and people were asked, what are you most excited about in terms of applications in blockchains? The most popular reply was prediction markets.
So this idea that we could somehow condense all of human knowledge into a set of predictions and forecasts, I think to techno optimists, people, this has always had a tremendous appeal.
Lex Sokolin:
It’s like, you know, you grow up with a favorite band that nobody knows. You hold it close to the heart because it’s so special to you. And then all of a sudden the band blows up and becomes super popular. And in a way, almost, it feels like a little resentful to have it fly out and become everybody’s favorite band. Everybody’s favorite idea? What do you think changed in people in the substrate of the economy, like in society, that updated everybody’s preferences and made this something normal and not, you know, super niche to the techno optimists?
Friederike Ernst:
That’s a fantastic question. And I think one should also acknowledge that PolyMarket still uses our framework. Right. So kind of PolyMarket is built on the conditional token framework that we wrote back in the day. So kind of it’s yes, it’s very much a different front end, but the ideas are very much kind of a continuation of what we brought.
First and foremost, I’m happy that prediction markets have made it into the limelight. I think that’s fantastic. I think it’s also just the beginning. And I know that’s hard to believe, kind of with projects like PolyMarket and Kalshi having valuations upwards of $10 billion. But I’m happy to talk about why I think this is this is not the end for prediction markets at the same time. Am I a little salty? That kind of infrastructure that we build powers this big a share of the prediction market economy on chain and effectively we don’t really benefit from that. Yeah. But you know, you win some you lose some, right?
Lex Sokolin:
Yeah. And I definitely don’t mean to frame it sort of relative to Gnosis, because without that early work, the analogy I go to and one of the things that I’m always drawn to as, like an entrepreneur and a builder is being the first up the mountain, and you’re kind of like lost in the woods and clearing the way, and you finally get to the top after years and years of work.
People appreciate that for a moment, and then they’re just like they pave a road to the top of the mountain and then starts bussing in tourists, you know, and all the tourists have better pictures than you and so on. You know, I had built out an early roboadvisor in 2010, and there’s probably ten roboadvisors getting started every single week on chain. It’s opening the road for the value creation to happen. So as Gnosis was getting built and you had gone through an ICO. Tell us about the strategy of the company. Because in the beginning it was this prediction markets bet. How did that transition to a broader treasury into a broader Dao with more things to do and tell us about kind of those middle years?
Friederike Ernst:
Yeah, absolutely. So in April of 2017, we did an ICO. We were one of the early ones. We raised $12.5 million in ETH. But this was at a time that ETH was $40. We held on to a lot of that ETH for a long stretch of time.
So basically those initial $12.5 million have seen us through until today, and we still have probably haven’t checked today. And the markets crashed. So 450 million or so. So kind of we’re still going very strong. But that was largely conservative Treasury management and sheer luck. So, that’s kind of how we got into the position that we are in today. Basically 12.5 million back then was a sizable ask, but it wasn’t crazy. And kind of we have. Yeah, that’s kind of how we came to be in the position of having a very strong treasury. What we then built was basically infrastructure that we needed for ourselves. So we had built a multisig before the token sale because we needed somewhere to keep our ETH that moved into the gnosis safe and then the safe. We had looked at the existing multisig wallets at the time, and had found them to be something we didn’t want to rely on. So this is why we built the safe. The safe very much is still around.
It holds treasuries around the world of in excess of $100 billion or so. We spun it out a few years ago, so kind of it’s its own project now. We are still very long, safe tokens. Obviously then we built trading infrastructure. So for conditional tokens. Conditional tokens are by design long tail. And they are also. There are also peculiar rules to how you can trade them. Okay. So kind of if you have for instance a three outcome event, who will win an election candidate, a candidate B or none of them. Instead of buying outcome A, you can that’s actually equivalent to selling outcome B and C together. Right. So kind of you have these additional rules that you can use to efficiently trade to, to efficiently trade outcome tokens. And this is how Cowswap emerged. So kind of we needed something that worked for illiquid long tail tokens where kind of price finding would be part of the process, and we needed something where we could add additional rules on top.
This is kind of what what’s done by the solvers. So we built a swap as a Dex aggregation protocol that also found a tremendous product market fit. So CoW is the largest Dex aggregator in Ethereum. It trades between 10 and $15 billion every month. We also spun that out. So that’s also a standalone project now. And obviously we’re also still a very long cow token. Then we needed to manage our own Dao treasury. By then it had grown very substantially. We had changed form from a for profit corporate entity to an Indian to an unincorporated DAO, plus a foundation. And we had divested most of our funds to that unincorporated DAO. And now it was important that the DAO was actually able to do things with our unchained treasury. So things like I mean, back then it was yield farming. You could actually get very substantial APIs. You still get pretty good API now for things like stables, treasuries and staked ETH and so on. We had to build a way of letting a third party manage our DAO treasury without them actually having custody or being able to withdraw funds.
And this is how we build an entire suite of tooling called Zodiac, that plugs into the save and lets you give granular permissions to specific parties. That’s used by a lot of a lot of the towers out there. We spun out a treasury manager called CPK out of Gnosis DAO that has so far taken care of the Gnosis Treasury, but also does the same for ONS and Balance and Lido and Ave and a couple of others.
Lex Sokolin:
So what’s interesting to hear is a lot of it was solving problems for yourself, which is you stepped into a large amount of capital and the infrastructure to manage that capital, while, you know, secure in a blockchain sense is and it wasn’t particularly mature or institutional or good for multi-party collaboration, you know, or solving the principal agent problem. And so you went along building tools to kind of check that off and develop it. And then as the tools became stronger, third parties started wanting to use them. So you start with custody, roughly speaking with the safe wallet and then exchange and asset management and so on.
Can you talk a bit more about exactly how a product would get started, and then how it would get that initial traction. And what I’m trying to figure out is one of the hardest things to do with a startup is to know a customer pain point, and then to figure out how much they will pay you for it, you know, and then figure out go to market and how to build. Whereas here you owned the problem and you were building the solution for yourself. What was that like? What kind of teams were necessary for it? And is there any sort of repeatable process that you’ve noticed?
Friederike Ernst:
Yeah. So kind of our team up until very recently was extremely engineering heavy. I think it’s part of the founder DNA that kind of goes into this. So Martin, Stefan and I were all engineers, all German engineers. I should add. I think this is part of what makes a company. Right. So kind of we saw problems and then we thought about efficient ways of fixing them Technically, and other people were interested in those solutions.
So we productized them. That’s been that was the modus operandi until very recently, about 2 or 3 years ago, we sat together and contemplated all the things that we had built and who actually uses them. And to us, we kind of glanced at the fact that everyone who uses them is more or less like us. Right? So there are crypto natives. There are people who kind of have the same set of problems, but they are not what I would kind of maybe slightly. They’re not what I would call normies. Right. So kind of we got into this space initially because this vision of having a platform that belonged to no one and hence belongs to everyone. This vision of shared ownership and agency being, making your own path and kind of doing your own thing on chain with either permission as innovation. You want that never played out for the mainstream or that hadn’t played out for the mainstream. When we kind of sat down to have this talk and kind of at this point, we’d been building infrastructure very intensely for every day for the past seven years or so.
And we said, okay, look, I mean, what we should do is we should build something that actually people can use. And that kind of isn’t just used for speculative and on chain finance purposes. And that’s how we looked at different verticals and where we might add value as the blockchain OGs that we are. And that’s when our team composition changed. So we started hiring people who came from Web2 and who had web two user expectations. Deliberately, we hired people for communications and marketing. So until then we had we didn’t have a single person in communication. So kind of the closest we probably had was developer relations. But yeah, so kind of that that led to a huge shift within Gnosis. And I think, I mean, you know, how it is with big projects. It takes a while until it takes and until you kind of see it from the outside because there’s so much history there that it takes a while for people to override what they know about you. But I would very much take the stance that we have now arrived in our in our customer era.
Lex Sokolin:
Most people hearing, you know, 100 billion in the multisig assets and 10 billion of volume in CoW Swap and you know, the volumes that you’re showing in like Gnosis Pay and 3 billion of AUM. And for CPK, like these are I’d say these are mid-stage, high product market fit outcomes. But you’re saying that actually those outcomes have a limited market size, like they’re basically as penetrated as they can be because the very on chain crypto native type audience, while it has capital, there’s just not that many of us out there. Is that the right way to interpret what you’re saying?
Friederike Ernst:
I do think that these numbers will grow in the future as well, just because the unchained economy grows. But I think building for the insiders, it’s no longer interesting to me. I want to build for the real people. I want to build for people who don’t need to know what powers things under the hood, who don’t need to be early adopters.
Right. So if you think about, for instance, if custody. I don’t know when the last time was that you tried to onboard a non crypto friend onto say, MetaMask or Rabbi. Right. It’s a struggle. So kind of you tell them to kind of download this browser plugin which is inherently dodgy because kind of like browser plugins for things like, you know, spell check. Right. Kind of like you don’t have your finances in a browser plugin. That’s just weird. And then it kind of then it gives you 24 words and it says, these are your 24. These are your 24 words. Absolutely. Never lose them or all your money is gone. But also never show them to anyone or keep them anywhere where anyone may see them, because then your money is also gone. That’s objectively a terrible user experience, right? So kind of we need to get to a place where that is no longer the default, right? Kind of like and we can so kind of there is I think this, this kind of goes back to what drives us.
So kind of actually having this, this curiosity, can we actually build it any better. Right. Can you actually build this such that it still has the same trust assumptions? But you can you can show it to your non crypto friends and they will be comfortable using it. So kind of we set out to kind of not just grow the pie in terms of how many billions would be under management here, but how many actual people can use this under the hood without actually having to understand why it’s better? I mean, if you look at if you look at the internet today, look at what fraction of people can explain to you how TCP IP works. It’s almost no one even an IT, it’s almost no one. And you don’t you don’t. You shouldn’t have to know. And it’s the same for blockchain. So kind of we have to build we have to build products that are genuinely better than what people already have in Web2 and are usable, so I don’t want any less people to use swap or save.
I think they will continue to be foundational infrastructure and kind of other projects will plug in to them. But I think in addition to that, we need to expand the total pool of people who can use this and who want to use this because they see the upside in terms of user experience. And if you look at if you look at the financial space alone, there are still so many pain points of people in the traditional finance system. So say my neighbor, he’s from Guatemala. I mean, it’s a small country in Central America. It’s not within the Wise network. So I think most people are probably familiar with the Web2 finance company Wise, that lets you send funds abroad for, I don’t want to say a reasonable fee, because they kind of take up to 2 or 2.5%, which still is a lot. But Guatemala is not in the Wise network, which makes it even worse. So kind of he actually pays 8% every time he sends his mother money home. And in this day and age where we have where in principle you can do this with stablecoins.
Sub one second for sub $0.01 there’s no way you should be paying 8% kind of send money to Guatemala. So kind of exposing these sorts of improvements to the corresponding group of people, that’s huge. Well, I just came back from Argentina. I was there for DevConnect. And in Argentina, having a dollar based account is still somewhat of a status symbol. Why is it a status symbol? Because people like having them because they can flee their local currency, and they are not subject to the inflation that plagues their country. So that’s a huge one right there. So I’m based in Germany as you can clearly hear. If I take my money to my local bank and say here I have my money, please pay me an interest on it. I’m very lucky to get a percent and a half. Right. And if I take this on chain, the risk free rate is depending on currency for euros around three and a half or 4%, and for dollars, 6 or 7%.
Those are very tangible benefits that we should be opening up, not just to the next 5000 people or the next 20,000 people, or the next 100,000 people. This is these are benefits we should be opening up to the next billion, or the next 2 billion or the next 3 billion. That’s why I am 100% sure that we need to we need to build products for actual consumers.
Lex Sokolin:
This is somewhat of a sideways question, but it’s in response to your long term conviction about our industry, you know, and continuing to see that financial technology can improve that on chain finance is part of it. And like, let’s just do the basics, the basics that we were supposed to do, which is to give people money and to let them invest better and to give them, you know, sort of dignity and being able to control their own accounts. And it sounds really simple, especially if you zoom out and have a long term horizon. And it sounds simple when you, you know, when you have an operating business and you’ve got traction, you can kind of have the stability of that.
Do you get distracted at all by the noise of our industry? You know, and especially like the last 2 to 3 years, I feel have been so thoroughly obnoxious in terms of the hyper gambling, the empty promises, the vacuous projects, the sort of like crime in a lot of places. And that can be quite discouraging for folks who are just, who are mission driven and who do see kind of a clear goal and fundamentals. How do you balance that and what do you do to navigate it?
Friederike Ernst:
I’m pretty good at tuning out the noise. I mean, the scams and the CD project and the pump and dumps, kind of like it’s not just been the last 2 or 3 years. That’s kind of it’s it gives us a bad name. And I think as an ecosystem kind of it’s something that we have to solve because there are so many valid solutions here for real people that could make the lives of countless regular people much, much better. The much larger danger I currently see a lot of the ecosystem is becoming completely enamored with incumbents entering the space.
It makes them giddy with joy. Just because we’ve been the dirty kids that kind of like other fintech parents tell their kids not to play with. For so long that the attention of the stripes and revolute and Robinhood’s of the world is almost like being love bombed. But by these, by these legacy companies, by these incumbents, what we fail to see, even people who kind of came into this space completely well-intentioned and with kind of are the ideology that I also came in with. They fall prey to this, and they forget it was never just about the adoption. It was never just about making money and market share and so on. It was about fundamentally changing the systems that lay at the base of our financial infrastructure, and a lot of other infrastructures for that matter, for sure, as well. So kind of like if you look at the internet today, you do anything on the internet. You accrue value to the same five companies in Silicon Valley. That’s not how the internet was meant to be.
And it’s similar in the financial stack. So kind of banks extract from their users. Kind of like that’s how they’re built. I mean, that’s how they’re meant to operate. Right. Kind of like they are big shareholder driven companies or private companies, but they are profit driven. Web3, at its heart, was meant to be an ownership revolution. It was meant to allow us to own part of the systems that we use to own the rails. Right. Because if you look at if you look at the web2 and the financial stacks, we have renters. We have we have no control over the products that we use over the landlords. So we are beholden to them. And with the big incumbents coming in and adopting these technologies for their efficiency gains as, as. As honestly they should. If I were a bank, I would do the same thing, right? But I’m not against the banks using blockchain backends. I think they absolutely should. But I think we ought not forget what we came into this space for in the first place, namely an ownership revolution for regular people.
Lex Sokolin:
Do you think this is something that can still happen? I mean, looking at the shape of the internet and the incredible winner take all dynamics that have happened there and, you know, so much user generated content, for example, has replaced the search graph, you know, and people live in walled gardens and seem to be happy to drink from the poison chalice, you know, and certainly crypto is allowed for user generated finance at pretty large scale, but we seem to be experiencing very similar returns to scale, especially if you look at which tokens or currencies are valuable, the separation of, let’s say, the top five assets versus what is affectionately called altcoins, but also includes a ton of revenue generating projects. You know, the market has largely not disregarded, but it’s become increasingly difficult for investors to figure out what good projects are. And even when they do figure out what good projects are. That doesn’t mean that value and capital flows to them. So how do we get out of this sort of contradiction?
Friederike Ernst:
I think it’s something that we need to win on culture. So if you look at. So we will launch Gnosis app soon. It’ll be our flagship product and it’ll be a money app for the post bank era. And in principle, it’ll be a feature. It’ll be pretty similar in terms of features with traditional neo Bank apps. Only the value system that kind of underpins it is completely different. You can you can be a part owner of this. We try to make you part owner of this. This should be a user owned financial railway. And I think this is this is this is important. And I think if you look at if you look at young people and how disenfranchised they feel, I do actually think it is a play that we as an ecosystem can make. So if you look at how downtrodden and hopeless the economic situation of many Gen Z folks is, I think 100%. Can we fix this? So I would like to kind of draw a parallel with, funnily enough, 19th century Germany. So kind of in the 19th century kind of Germany was a collection of 30 odd little states.
People generally were super poor. It was very rural. And if you were a farmer in the countryside, you had no access to banking at all. So kind of. If so. And you lived hand to mouth. Okay. So kind of like many people today, it’s actually it’s a nice allegory because kind of it ends well. So kind of what happened was that these farmers who had to risk, had to actually resolve to using moneylenders if they were ever in a hard place. So, for instance, they had a crop failure early in the year because there was a late frost or something. They had to buy more seeds, they had to go to a local moneylender and they would lend the money at literally between 25 and 40% per year. So kind of they ended up in this perpetual cycle of almost debt slavery. And what they actually ended up doing is they started forming their own collective banks. So they had a community kind of a community bank where they put their meager resources.
And if someone, experienced a some sort of misfortunes or their cow died, who kind of they had a crop failure, need to buy new seeds and so on, and they would vote on whether to lend that person the money. If the loan went through, they would pay between 4 and 6%. So kind of they learned to help themselves collectively. And within a couple of decades, there were tens of thousands of community banks in Germany alone. And it’s actually even to this day, one third of all Germans are members of a community bank. And it’s something that’s kind of carried around the world. So I, I lived in Stanford, I lived in Palo Alto for a while and worked at Stanford, and I was a member of the Stanford Credit Union and which was founded kind of like on these principles that that were kind of brought to the states and everywhere else by mostly by German immigrants. I had much better rates for my credit than had I had at a regular at a regular bank.
And I think having that sort of revolution where you take something that has feature parity, or at least very similar in terms of features, but the underlying economics are totally different. I think it takes a lot of explaining and making people see the light, but I think fundamentally, I think the time is 100% right for this.
Lex Sokolin:
What is the ambition for the app look like? What kind of people do you want to use it? What kind of scale do you want to achieve? And then underneath what are the protocols that are being leveraged.
Friederike Ernst:
So the protocols that are being leveraged are first and foremost the Safe. So it’s a self custodial wallet. There are different flavors to the self custody or there’s this self custody comes on a spectrum. So kind of you can hold everything yourself. You can have recovery. You can have social recovery institutional recovery. You can you can back up your phrase with a trusted entity. But it’s purely optional and you’re never locked in.
So that’s, that’s the first thing. The second thing it uses is CoW swap under the hood of course. So kind of it lets you lets you trade as efficiently as possible. It lets you invest into different financial products. It lets you hold different fiat currencies. It plugs into legacy financial rail seamlessly. So you can give your wallet an Iban. So for everyone who’s not in Europe, that’s kind of like a routing number. So you send number, you send euros to that routing numbers. And within a half a minute they that that shows up as a stablecoin within your wallet. And likewise, you can do. We can do a separate transfer first right out of your wallet. That’s already there. Same for Pix, which is the Brazilian payment system we’re integrating. Other local payment rates as we roll it out. So our very first launch is going to be in Ireland because the app is currently optimized for a Euro experience. And we did some polling that shows that even people in countries where young people speak flawless English prefer to use financial applications in their own local language.
So you need a test case where you can test it and then you localize to different countries later. We are rolling this out this month, so it’s coming. It’s coming very soon. It targets mostly younger people. It should be usable by everyone. But because the youngest are currently the people who are most disadvantaged by by the current economic situation in terms of ownership of houses, in terms of cost of education, in terms of access to benefit benefits and, and kind of in terms of the population, the way that the population dynamics change. So kind of currently. So there will be a lot more older people soon. And kind of demographic change just dictates that younger people will kind of somehow have to foot the bill for this. So, yeah. So basically we’re gearing it towards younger people in your university, just out of university, in trade school. We’ll see how that goes.
Lex Sokolin:
Awesome. Well, I’m excited to check out the launch. One last question that I’ve been thinking about. I know that Gnosis Chain for a while was pretty closely partnering with projects like autonomous and others with this vision of providing substrate, economic substrate, whether for payments or trading for AI agents.
And over the last 6 to 12 months, that’s become a very mainstream story. And large companies like Coinbase and their partnership with, I believe, OpenAI and then or like stripe and OpenAI, Coinbase and Google have all been working on some version of a protocol or standardization to accept payments or value flow for AI agents. Is this still an area that you’re interested in as a company? Is this something you’re watching? And you know, what do you think are the available opportunities there?
Friederike Ernst:
Oh yeah. Absolutely. So kind of Gnosis chain is still very much around as a substrate for all kinds of financial protocols, where we’re mostly concentrating on non US dollar stablecoins because they are severely underrepresented. but we have we still have an emphasis on AI agents. Just because giving your agents a way of paying is such a big unlock. So kind of your having your agent empowered to consume services online and on chain just increases the potential of what they can deliver by a factor of 10 to 100. And obviously, blockchain is a very easy way of doing this.
So we’ve ran pretty early experiments in this by giving agents a seed phrase and saying, okay, this is now your wallet. I put in $100. Can you make more? You only needed to give them a very small objective function, and they would actually act on it and they could act on it. I think this is going to change the needle for how we work and collaborate with eyes. So much is still very much an ongoing research and project. So we also have prediction markets that are run by AI. So that are where that are optimized towards AI, AI traders, different models that kind of try to surface information and then bid against one another. So kind of with bridge markets, we’ve always found that actually finding experts and enticing them to partake in the trading on the prediction market was one of the more difficult parts, because experts often are risk averse. And I mean, we all know that there are kind of psychological things like loss, avoidance and so on. And with AI, if you run different models and kind of have different ways of aggregating information in different ways, you can actually put just say $10 or $20 on a market in A’s will compete for that money and will actually give you pretty good forecasts of what’s going to happen in the future.
Lex Sokolin:
What do you think is the most immediate opportunity there? You know, have the big fintechs sort of already taken the opportunity for the payments protocol? Or do you think there’s space there? And if you look at sort of agenda commerce, like is there anything. Is there anything real that is on the cusp of being used by the mass market, or are we still a few years away from from something more tangible, sort of similar to that, you know, ten year time horizon to go from prediction markets or for our techno optimist friends and then for everybody. Are we still that far away from AI age and commerce or do you see something starting to pop off?
Friederike Ernst:
I don’t think it’s ten years. I think it’s going to happen pretty soon. It’s going to happen incrementally. My best guess would be that one of the first applications to really make it will be reverse advertising. So for instance, if I say I am in the market for buying whatever expensive product I want, I want a new car.
Okay. So in principle, kind of like on the old internet, if I Google where to buy a car, what car to buy, there would be different advertisers that would plug into kind of these search terms and they would show me whatever models they have. But in principle, I can tell the AI a lot about myself, right? Kind of I can say, okay, so I am a 39 year old woman. I live in Germany. I like driving fast, but I also have four kids, so I’m not here for Porsche. I want something that has Isofix so I can put my kids car seats in there securely. And I also want a big trunk and sometimes I drive off road. Okay. So kind of that, that kind of should whittle down the number of models that the AI can pitch to me, and then it should almost auction my attention to the different companies that then still want to sell me something. Right. And I should kind of see the upside of that advertising of that advertising spend rather than the aggregators like Google.
And I think that is a tremendous that’s going to be $1 trillion market. And with how much AI is already know about you, and I’m surprised they’re not trying to plug more products. Right. So kind of like if you if you ask your ChatGPT or Gemini or whatever, recommend me podcasting microphones or something, they don’t send you links yet. Right. Kind of. They don’t partake in that part of onchain commerce online, right? I think that’s coming within a number of weeks. But the reverse advertising model, I think that’s going to be a huge unlock. And it’s also that people will be behind because they’ll be paid for it. That’s my prediction.
Lex Sokolin:
Fantastic. I think we’ll get there faster than people expect as well, but that’s a conversation for another time. Thank you so much for joining us today and sharing the Gnosis story, and I’m super excited to check out the app when it comes out.
Friederike Ernst:
Thank you so much for having me. Lex, it’s been a pleasure.
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