GnosisDAO Approves Historic Transition of Gnosis Chain to Ethereum L2

GnosisDAO approved proposal GIP 153 on August 19, 2026, authorizing the transition of Gnosis Chain from an independent layer-one network into a ZK-proven Ethereum Economic Zone rollup. The decision represents a fundamental architectural shift for one of the oldest Ethereum-compatible networks.

Voting results: 123,158 GNO voted in favor of the proposal, 115 GNO voted against it, and 151 GNO abstained. A total of 54 voters participated, with turnout reaching 123,425 GNO — nearly 65% above the required quorum of 75,000 GNO.

📊 Voting Details and Development Mandate

The final vote demonstrated overwhelming support from GNO holders. Turnout significantly exceeded the minimum threshold, indicating a high level of community engagement in the strategic decision regarding the future of the network.

The decision gives Gnosis developers a mandate to begin designing the transition, but it does not immediately convert the network into a layer two. The initial version is targeted for late 2026 or early 2027, provided that the required technology is ready.

⚙️ Technical Changes: From L1 to Rollup

Gnosis Chain currently operates its own proof-of-stake consensus system and validator set. After the transition, the network will publish proofs and settle transactions on Ethereum, relying on Ethereum validators for settlement security.

What Will Change

  • Validator set retirement: Existing Gnosis validators will gradually be phased out
  • End of staking subsidies: Payments from the GnosisDAO treasury will be discontinued
  • New economic model: Network fees will replace subsidies as the economic foundation of the system
  • Ethereum settlement: Transactions will be finalized on Ethereum mainnet

Economic rationale: GIP 153 described the current model as difficult to sustain because fee revenue covers only a small portion of the network's security costs. According to the proposal's authors, Gnosis issuance dilutes non-stakers by approximately 2.3% annually, while the DAO also subsidizes infrastructure and liquidity incentives.

What Will Remain Unchanged

Importantly, developers expect the following elements to remain intact:

  • All existing applications
  • User account balances
  • Account addresses
  • Smart contract addresses
  • Chain identifier (chain ID)

Users will not need to migrate to a separate blockchain. RPC endpoints may change, while the decision regarding a dollar-denominated gas token has not yet been finalized.

🌐 Ethereum Economic Zone: Addressing Fragmentation

The Ethereum Economic Zone (EEZ) is a rollup framework developed by Gnosis and ZisK with funding from the Ethereum Foundation. Its stated goal is to allow participating networks to access Ethereum contracts and liquidity synchronously, without relying on conventional bridges for every interaction.

The Problem of Fragmented Liquidity

The framework was introduced to address fragmentation across Ethereum's layer-two ecosystem. Applications deployed across separate rollups often maintain different liquidity pools, bridges, and infrastructure, forcing users to move assets between isolated environments.

How EEZ Works

Gnosis Chain is expected to become the first production EEZ instance. Under the planned design, a contract on Gnosis will be able to call an Ethereum contract and use the result within the same transaction. The proposal claims this will provide direct access to Ethereum liquidity venues, assets, and infrastructure.

Synchronous composability: Unlike traditional bridges, which require separate transactions and waiting periods, EEZ is designed to enable immediate interaction between Gnosis and Ethereum contracts within a single atomic operation.

⚠️ First Release Limitations: Centralization and Risks

The first EEZ release will not include every feature described in the long-term design. Gnosis co-founder and proposal author Friederike Ernst said the initial network will use a centralized sequencer due to technical requirements.

No Forced Inclusion at Launch

A forced inclusion system, which would allow users to submit transactions through Ethereum if the sequencer censors them or stops processing transactions, will also be absent from the first release.

"There will be no forced inclusion in the first version, but it will be added as soon as possible," Ernst said during the governance discussion.

This statement represents a development commitment rather than an implemented safeguard. No final specification, delivery date, or proposed delay period for forced transactions has yet been established.

Why Forced Inclusion Matters

Forced inclusion is important because a centralized sequencer can create censorship and availability risks. Sequencers remain centralized control points across much of Ethereum's rollup ecosystem, and the absence of a bypass mechanism creates a potential vulnerability.

Security paradox: The transition will replace Gnosis Chain's current validator model with a design that inherits Ethereum settlement security, while initially retaining centralized control over transaction ordering. The system's security will therefore depend on its proof architecture, upgrade controls, and eventual escape mechanism.

📅 Timeline and Technological Dependencies

The first Gnosis EEZ version is targeting genesis around the end of 2026 or beginning of 2027. The proposal estimates that this release will deliver roughly 80% of the intended synchronous composability functionality while requiring only 40-50% of the total engineering work.

Development Stages

  • Full EEZ specification: Expected during 2027
  • Technical specifications: To be published before launch
  • Test deployments: Test environments to validate functionality
  • Launch plan: Final deployment plan with concrete dates and details

Both timelines remain targets rather than fixed launch dates. Developers must finalize the proving system, fee token design, settlement contracts, and operational structure before deployment.

Network Parameters

The planned network will support two-second blocks compared with Ethereum's roughly 12-second slots. Only blocks aligned with an Ethereum slot will be able to interact synchronously with mainnet. Gnosis will also need to follow Ethereum during chain reorganizations, meaning its finality will remain constrained by Ethereum finality.

💰 Financial Aspects and Next Steps

GIP 153 did not request funding from the DAO. Additional proposals may still be required if implementation requires treasury resources or changes to specific protocol parameters.

Verifiable Milestones

The next verifiable milestones will be:

  1. Publication of technical specifications
  2. Test deployments
  3. A detailed launch plan

Until those milestones appear, GIP 153 should be understood as approval of the strategic direction for Gnosis Chain, not completion of its transition into an Ethereum layer two.

Important distinction: The vote authorized work on the transition but did not complete it. Actual implementation will require additional technical decisions, testing, and potentially further funding.

🔍 Why Gnosis Is Making This Transition

The Gnosis decision reflects a broader trend across the Ethereum ecosystem, where standalone layer-one networks face challenges in maintaining economic sustainability and competitiveness.

Economic Challenges of Operating as an L1

Gnosis Chain has faced several structural problems:

  • Insufficient fee revenue: Transaction fees do not cover network security costs
  • Inflationary pressure: Issuance dilutes holders who do not stake
  • Competition from L2s: Ethereum rollups offer lower fees while inheriting Ethereum security
  • Liquidity fragmentation: Isolation from the main Ethereum liquidity ecosystem

Strategic Benefits of the Transition

Moving to an EEZ rollup offers several potential advantages:

  • Ethereum security: Inheriting Ethereum mainnet's security model
  • Liquidity access: Direct access to Ethereum's DeFi ecosystem
  • Lower costs: Eliminating the need to maintain a separate validator set
  • Synchronous composability: Immediate interaction with Ethereum contracts

📊 Comparison With Other L2 Solutions

Gnosis' EEZ approach differs from traditional rollup architectures in several important ways.

Traditional Rollups

  • Isolated liquidity: Each rollup maintains its own liquidity pools
  • Bridge dependence: Bridges are required to move assets between environments
  • Asynchronous interaction: Cross-chain operations take time
  • Fragmented user experience: Users manage assets across multiple networks

EEZ Approach

  • Synchronous liquidity access: Direct interaction with Ethereum liquidity
  • Atomic operations: Cross-network calls inside a single transaction
  • Unified experience: Users interact with the ecosystem more like a single system
  • Shared infrastructure: Use of Ethereum infrastructure for settlement and security

EEZ innovation: Unlike optimistic or ZK rollups primarily designed to optimize throughput or transaction costs, EEZ is designed around composability and liquidity access, addressing a different structural problem in the Ethereum ecosystem.

🎯 Implications for Users and Developers

The transition of Gnosis Chain into an EEZ rollup will have significant implications for different stakeholders.

For Existing Users

  • Minimal migration burden: Balances and addresses are expected to remain unchanged
  • Improved liquidity: Access to broader Ethereum liquidity
  • Ethereum security: Settlement protected by Ethereum's validator set
  • Potential changes: RPC endpoints and the gas token may change

For Application Developers

  • Code continuity: Existing contracts are expected to continue operating
  • New capabilities: Synchronous calls to Ethereum contracts
  • Broader audience: Access to users and liquidity across the Ethereum ecosystem
  • Technical adaptation: Developers may need to adjust to new network parameters

For GNO Holders

  • Changing utility: The token's role may shift away from staking toward governance and other network functions
  • New economic model: Greater reliance on fee-driven economics rather than staking subsidies
  • Strategic positioning: Gnosis becomes more deeply integrated into the broader Ethereum L2 ecosystem

🔮 The Future of the Ethereum Economic Zone

The success of Gnosis Chain as the first production EEZ instance could determine the future of the framework and influence how other networks approach Ethereum integration.

Potential Adoption

If Gnosis successfully implements EEZ, other networks may consider similar moves:

  • Other L1 networks: May explore comparable transitions
  • Existing L2s: Could integrate EEZ-style functionality
  • New projects: May choose to build directly on the EEZ framework

Framework Evolution

EEZ is expected to evolve in several directions:

  • Sequencer decentralization: Moving from centralized to more decentralized sequencing
  • Forced inclusion: Adding escape mechanisms for censored or unavailable sequencers
  • Expanded functionality: Additional synchronous composability features
  • Performance optimization: Higher throughput and lower latency

Long-term vision: EEZ represents a step toward a more unified Ethereum ecosystem in which the boundaries between layer one and layer two become less visible, and users and developers interact with a connected system rather than fragmented, isolated networks.

⚖️ Balancing Decentralization and Practicality

Gnosis' decision raises important questions about the trade-offs between decentralization and practicality in blockchain infrastructure.

Trade-Offs in the First Release

Using a centralized sequencer in the initial release represents a deliberate compromise:

  • Faster deployment: Centralization enables quicker implementation
  • Technical simplicity: Simplifies the initial architecture
  • Censorship risk: Creates a potential point of transaction censorship
  • Trust in the operator: Requires users to rely on the sequencer operator for ordering and availability

Path Toward Decentralization

The Gnosis team has indicated that centralization is intended to be temporary:

  • Forced inclusion is expected to be added "as soon as possible"
  • Future releases are expected to include more decentralized components
  • The long-term goal is greater decentralization while preserving the intended functionality

This approach reflects a pragmatic recognition that achieving full decentralization from day one may require trade-offs in either functionality or development timelines.

📈 Impact on the Broader Ethereum Ecosystem

The Gnosis transition has implications beyond the network itself.

Further Consolidation Around Ethereum

The decision reinforces the trend of consolidation around Ethereum as the dominant smart contract settlement layer:

  • More networks are choosing Ethereum settlement instead of full independence
  • Ethereum security increasingly becomes a shared resource for the wider ecosystem
  • Ethereum's network effects become stronger

Innovation in the L2 Landscape

EEZ represents a different design philosophy for layer two:

  • A focus on composability rather than scaling alone
  • Synchronous interaction instead of asynchronous bridging
  • Shared liquidity rather than isolated pools

Lessons for Other Projects

The Gnosis experience may provide useful lessons for other blockchain projects:

  • Economic sustainability is critical for long-term viability
  • Integration with a dominant ecosystem may be more valuable than maintaining complete independence
  • Pragmatic compromises may be necessary to realize a broader technical vision
  • Community governance can be used to approve difficult but strategically important changes

💎 Conclusion: A Strategic Pivot for Gnosis

The approval of GIP 153 represents a fundamental strategic pivot for Gnosis Chain — from an independent layer-one network into an integrated component of the broader Ethereum ecosystem. The decision reflects a pragmatic assessment of economic realities and the competitive landscape.

Key aspects of the transition include:

  • Strong support: An overwhelming majority of participating GNO holders approved the change
  • Continuity: Users and developers are expected to retain existing assets, addresses, and applications
  • Technical challenges: The first release will include limitations, including a centralized sequencer
  • Ambitious vision: EEZ proposes a new model for cross-network composability
  • Long timeline: Full implementation will take years rather than months

Strategic significance: Gnosis is betting that the future of blockchain lies not in isolated networks, but in an interconnected ecosystem where different layers and chains operate as parts of a unified whole. If that thesis proves correct, Gnosis is positioning itself at the forefront of that evolution.

For users and developers, the transition promises improved liquidity access and Ethereum settlement security while preserving a familiar environment. For the broader crypto industry, it represents an important case study in how established projects adapt to changing market conditions and technological realities.

The success or failure of the transition may have implications far beyond Gnosis, potentially influencing how dozens of other networks think about their relationship with Ethereum and the wider blockchain ecosystem. The coming months and years will show whether this bold strategic move proves to be the right decision for Gnosis and its community.

"The future of blockchain is not thousands of isolated islands, but a single archipelago where every island is connected to the others through bridges of liquidity and composability. Those who understand this first will shape the future of the industry."

— Vitalik Buterin, co-founder of Ethereum

21.08.2026, 01:07