The Gnosis safe received 1,500,000 ETH in a single transaction worth over $1.7 billion at the time. This takes the safe’s balance up to $2.3 billion.
Binance, Ethereum, then Gnosis
The deposit makes the safe the third-largest custodian of Ethereum. It now holds 2.2% of the cryptocurrency’s supply.
Though it is unclear who made the transaction, the deposit followed a 600,000 ETH deposit a day earlier.
The wallet associated with the safe ranked 32nd on Ethereum’s rich-list prior to these transactions. Now, it has over 2.5 million of the second largest cryptocurrency.
The safe’s ranking puts it behind only Binance – the world’s largest exchange by volume – and Ethereum itself.
The month-old custodian
Gnosis protocol is a fully permissionless decentralized exchange (DEX) that seeks to maximize liquidity. The protocol also facilitates the building of “new market mechanisms” for decentralized finance (DeFi).
Since 2017, several DeFi projects, including the Ethereum sister chain, xDai have used Gnosis.
Its multi-signature storage safe, built on the Gnosis protocol, is a custodian platform to manage digital assets on Ethereum. A number of large Ethereum holders use it. Developers exploring new ways of storing crypto assets also take interest init.
Gnosis entered the custody scene only a month ago, with promises to upgrade the facilities used to store crypto-assets. Its safe targets large cryptocurrency holders such as exchanges and investment funds.
Is cryptocurrency still decentralized?
The cryptocurrency custody industry is growing in tandem with the increase in the number of larger holders in the space.
Increased interest in cryptocurrency funds, as well as trading activity on exchanges, provide some explanation for this growing need.
As a direct result of these trends, some in the community are worried that cryptocurrencies like Ethereum will lose their decentralization. Already, just 10 exchanges hold 16% of Ethereum’s supply.
However, these addresses are either smart contracts or storage addresses used by exchanges.
Wrapped Ether (WETH) is the largest contract on the Ethereum network. WETH enables the transfer of and ERC-20 token to decentralized apps or other DeFi applications.
Nevertheless, Ethereum recently launched its proof-of-stake consensus mechanism. Some in the cryptocurrency community now fear that the Ethereum holders with the deepest pockets will have the biggest sway.
For now, that’s not the case. But the custody space is growing. Gnosis, among many others, wants to be the first platform these whales look to.