Gnosis Chain Abandons Standalone Status, Transitions to Ethereum-Settled Rollup

Gnosis Chain is abandoning its standalone Layer 1 status and transitioning to an Ethereum-settled rollup, according to an announcement from Gnosis Chain and a proposal published on GnosisDAO's governance forum.

The change will make Gnosis Chain a Gnosis-operated instance of the Ethereum Economic Zone framework, with blocks produced every two seconds and state proved every Ethereum block. The network will settle to Ethereum Layer 1, delivering synchronous composability with mainnet.

Gnosis Chain began as xDai, a stablecoin-denominated Ethereum sidechain that GnosisDAO absorbed in November 2021, before switching to proof-of-stake in December 2022. Despite having one of the largest validator sets in crypto, above 100,000 at the time of the merge, fees only cover 'a small fraction' of even the minimal cost of security.

The proposal explicitly describes becoming less decentralized as a deliberate choice, with Ethereum validators replacing Gnosis Chain's validator set as the source of settlement security. The end of staking also leaves $GNO's replacement economic role unfinished, with fee sharing and buybacks listed as possibilities for a later GIP.