Wealth Distribution and Why It Matters
Every so often, a statement will be made which puts everything into perspective. An excellent example of this is this comment from the Gnosis AMA on Reddit a few months ago, made by Martin Köppelmann (the co-founder and CEO of Gnosis):
“Augur could not call itself a decentralized prediction market if they would control >50% of their tokens. However — Gnosis is decentralized regardless of the distribution of tokens. Even if we would keep 100% of the tokens and not sell any we could not interfere with markets on Gnosis.
Gnosis is decentralized because it runs on Ethereum.”
If this quote seems like a boldfaced dismissal of a serious concern, that’s because that’s exactly what it is. Just because something “runs on Ethereum” does not automatically make it meaningfully decentralized (in fact, if that were the only criteria that needed to be met, then Augur would qualify just as well as Gnosis). Yet here we have the creator himself saying that he would be perfectly fine calling Gnosis “decentralized” even if he personally controlled 100% of the tokens and no one else were able to use the system in any way whatsoever.
The worst part is, the above claim is false. The distribution of GNO tokens matters very much in the Gnosis protocol, and if the majority of the tokens are concentrated into too few hands, it introduces critical vulnerabilities into the system (and completely prevents the model from being sustainable in the long term).