Gnosis Chain to Abandon Its Validator Set and Settle to Ethereum

Gnosis Chain is transitioning from a standalone Layer 1 to an Ethereum-settled rollup and retiring its impartial validator set, in response to an announcement from Gnosis Chain and a proposal printed on GnosisDAO’s governance discussion board.

For $GNO stakers, the accredited route would unlock roughly 350,000 $GNO when the validator set is sundown and finish the treasury-funded staking subsidy. For customers and builders, xDAI would stay the fuel token, whereas addresses, balances and contract state would proceed with out migration to a brand new chain.

The proposal’s foremost technical promise is atomic entry from Gnosis to Ethereum contracts and liquidity. However that synchronous composability can be one-directional at launch, with calls from Ethereum into Gnosis and broader cross-instance composability deferred to later improvement.

The change would make Gnosis Chain a Gnosis-operated occasion of the Ethereum Financial Zone framework. The proposal says the community would produce blocks each two seconds, show its state each Ethereum block and settle to Ethereum Layer 1.

The vote accredited a strategic route slightly than a last technical design and requested no funding. Gnosis Ltd will initially function a centralized composer that orders transactions, builds blocks and submits them for proving and settlement.

Proof-of-Stake Chain With Massive Validator Set

Gnosis Chain started as xDai, a stablecoin-denominated Ethereum sidechain that GnosisDAO absorbed in a November 2021 merger, and switched to proof-of-stake in December 2022 in an improve modeled on Ethereum’s Merge, with a deposit of 1 $GNO per validator in opposition to Ethereum’s 32 ETH.

The low threshold produced one of many largest validator units in crypto, above 100,000 on the time of the merge, however not the payment income to pay for it. GIP-153 says charges cowl “solely a small fraction of even the minimal value of safety,” leaving the DAO treasury to fund the remaining via $GNO issuance that dilutes non-stakers by about 2.3% a yr, in opposition to sub-1% on Ethereum. The chain holds about $96.4 million in whole worth locked, in response to DefiLlama.

The validator set was already contracting earlier than the vote. GnosisDAO’s July neighborhood abstract put energetic validators at roughly 52,000, down from about 76,000 a month earlier, with roughly 295,000 $GNO staked. GnosisDAO additionally minimize Gnosis Ltd’s annual funding to $15 million from a $30 million request in GIP-154, and in Might accredited a one-time, pro-rata treasury redemption in GIP-151 after tokenholders spent months arguing $GNO traded under the DAO’s web asset worth.

Validator Safety Offers Method to Ethereum Settlement

GIP-153 says Ethereum validators will substitute Gnosis Chain’s validator set because the supply of settlement safety. Present bridge validators are supposed to maneuver into a brand new position working the occasion’s proof programs.

The proposal explicitly describes turning into much less decentralized as a deliberate selection. It says a misbehaving composer would be capable to delay or exclude transactions, though it couldn’t forge state or reverse finalized historical past. A forced-inclusion route via Ethereum is listed as an choice to guage later, not a launch function.

The tip of staking additionally leaves $GNO‘s substitute financial position unfinished. The proposal intends to attach $GNO to payment income from community exercise, however doesn’t choose a mechanism. Payment sharing and buybacks are listed as prospects for a later GIP after prover economics might be noticed in manufacturing.

Full Composability Is a Later Step

Gnosis Chain mentioned the transition would ship “synchronous composability with mainnet,” one thing it mentioned no current Layer 2 gives. GIP-153 defines the preliminary functionality extra narrowly: a contract on Gnosis may name an Ethereum contract and use the end in the identical atomic transaction, with all the operation succeeding or reverting collectively.

At launch, composability would solely run from Gnosis to Ethereum. An intents-based bridge is meant to cowl the interval earlier than bidirectional and cross-instance calls grow to be accessible.

The preliminary model would additionally use an interim proving setup, seemingly primarily based on trusted execution environments, earlier than shifting to real-time zero-knowledge proving. The proposal targets the primary Ethereum Financial Zone block for December 2026 or January 2027, with bidirectional composability and real-time proving anticipated throughout 2027.