Gnosis Chain Votes to Transition Into an Ethereum-Settled Rollup

GnosisDAO has approved a strategic shift that will transform Gnosis Chain from a standalone Layer 1 network into an Ethereum-settled rollup, retiring its independent validator set in the process. The transition aims to address financial sustainability concerns while altering the network's security and economic structure.

Impact on Staking and Users

Under the approved direction, the retirement of the validator set will unlock approximately 350,000 GNO and bring an end to treasury-funded staking subsidies. For developers and users, xDAI will remain the designated gas token, and all addresses, balances, and contract states will continue to function without requiring a migration to a new chain.

Gnosis Chain originated as xDai, a stablecoin-denominated Ethereum sidechain absorbed by GnosisDAO in November 2021. It transitioned to a proof-of-stake model in December 2022. While the low barrier to entry created one of the industry's largest validator sets, network fees covered only a small fraction of security costs, forcing the DAO treasury to fund the deficit through GNO issuance that diluted non-stakers.

Technical Roadmap and Composability

The network plans to settle to Ethereum Layer 1, producing blocks every two seconds and proving its state every Ethereum block. Gnosis Ltd will initially operate a centralized composer to order transactions and build blocks. Ethereum validators will replace Gnosis Chain's validator set as the source of settlement security.

The proposal promises atomic access from Gnosis to Ethereum contracts and liquidity. However, this synchronous composability will be one-directional at launch, allowing contracts on Gnosis to call Ethereum contracts in the same transaction. Bidirectional calls and broader cross-instance composability are deferred to later development phases.

The initial launch will rely on an interim proving setup utilizing trusted execution environments before transitioning to real-time zero-knowledge proving. The target window for the first Ethereum Economic Zone block is set for December 2026 or January 2027.