GnosisDAO votes to settle Gnosis Chain on Ethereum

GnosisDAO has voted to shift Gnosis Chain from a standalone layer 1 to a rollup that settles on Ethereum, retiring its independent validator set. The approval makes roughly 350,000 GNO available to stakers once the validator set is dismantled, ending the treasury-funded staking subsidy, The Defiant reports. The vote backed a strategic direction, not a final design, and carried no funding request.

Gnosis Ltd will start as the central operator, sequencing transactions, building blocks, and delivering them for proof and settlement. The network is set to generate a block every two seconds, attest to its state against every Ethereum block, and post finality to Ethereum L1. xDAI remains the gas token; addresses, balances, and contract state carry over without migration. Atomic access into Ethereum contracts and liquidity goes live one-way at launch, with the reverse direction and cross-instance composability deferred.

The chain began as xDai, a stablecoin sidechain, merged into GnosisDAO in November 2021, and switched to proof-of-stake in December 2022 with one GNO per validator against Ethereum's 32 ETH. That low bar produced one of crypto's largest validator sets, above 100,000 at the Merge, but fees never covered the security bill. GIP-153 says fees pay a small fraction of even minimal security costs; the DAO treasury funds the rest through GNO issuance that dilutes non-stakers about 2.3% annually versus under 1% on Ethereum. DefiLlama puts total value locked near $96.4 million.

The validator fleet was already shrinking. GnosisDAO's July summary counted roughly 52,000 active validators, down from about 76,000 a month earlier, with about 295,000 GNO staked. The DAO had cut Gnosis Ltd's annual funding to $15 million from a $30 million request, and in May approved a one-time, pro-rata treasury redemption after tokenholders argued GNO traded below the DAO's net asset value.

For institutional stakers and custodians, the unlocked GNO is a return of capital, but the end of the subsidy is the larger event. Gnosis Chain's security now rests on Ethereum's ledger, not freshly minted GNO. The open question is sequencing: how the validator wind-down times against the unlock, and what role remaining validators play.