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GnosisDAO voted on Aug 19 to turn Gnosis Chain from an independent L1 into a rollup that settles on Ethereum. The result was 123,158 GNO for, 115 against ([vote and proposal](https://snapshot.org/#/s:gnosis.eth/proposal/0x5522f4cbd034c966a08d6901b05c7ad7300041b3e0d75a0ad3da868af1a98b98)). The proposal's authors wrote that "Gnosis Chain has failed to deliver on its original value proposition". That value proposition was credible neutrality: a decentralized, low-cost chain run by a large set of independent validators. They also explained the reason it didn't work: "Credible neutrality is Ethereum's home turf". Fee revenue covered only a small fraction of the cost of securing the chain, so the DAO treasury was paying for security. This isn't a new project deciding where to launch. It's an established chain, with its own validators and years of history, concluding that being a separate L1 isn't worth what it costs. What changes: * Gnosis Chain stops running its own validator set. Ethereum takes over settlement, meaning the final record of who owns what. * Gnosis still produces its own blocks, every 2 seconds, and proves its state to Ethereum every Ethereum block. * Users keep their addresses, balances and contracts, and xDAI stays the fee token. Gnosis calls this the first instance of an "Ethereum Economic Zone" (EEZ). The EEZ is a framework for rollups that are closely tied to Ethereum, co-led by Gnosis and ZisK and co-funded by the Ethereum Foundation. According to Gnosis, the EEZ gives it something no L2 currently offers. A contract on Gnosis can call a contract on Ethereum mainnet and use the result in the same transaction, with no bridge and no waiting. Apps on Gnosis could then use Ethereum's liquidity directly, as if it lived on Gnosis. Gnosis does give something up. It no longer controls its own settlement, and at launch Gnosis Ltd runs the sequencer, the single operator that puts transactions in order. Gnosis says it will come back to the DAO with evidence before deciding whether to decentralize it. That's a real trade-off, but the risk is limited. Per Gnosis, every block is proven and settled on Ethereum, so the sequencer can't forge state, steal funds or roll back finalized history. It can only delay or leave out transactions. On a standalone L1, the chain's own validators are the last word. Here, Ethereum is. Proving starts with an interim setup and moves to ZK proofs as the full EEZ spec is completed, which Gnosis expects over the course of 2027. The proposal targeted the switch to a rollup for around the turn of the year. After that, the key milestones will be users having the capability to force a transaction through Ethereum if the sequencer ignores them, the upgrade keys being spread across a large number of independent parties or eliminated altogether, and users being able to withdraw without the operator's cooperation. Fees, uptime and withdrawals should be similar to the old chain. This sets a precedent. Plenty of L1s run their own validators, bridges, tooling and liquidity programs, and pay for all of it themselves. Gnosis evaluated the costs and decided settling on Ethereum is the better deal. The L1 premium is gone, and I expect more established chains to come to the same conclusion.

GnosisDAO voted on Aug 19 to turn Gnosis Chain from an independent L1 into a rollup that settles on Ethereum. The result was 123,158 GNO for, 115 against ([vote and proposal](https://snapshot.org/#/s:gnosis.eth/proposal/0x5522f4cbd034c966a08d6901b05c7ad7300041b3e0d75a0ad3da868af1a98b98)). The proposal's authors wrote that "Gnosis Chain has failed to deliver on its original value proposition". That value proposition was credible neutrality: a decentralized, low-cost chain run by a large set of independent validators. They also explained the reason it didn't work: "Credible neutrality is Ethereum's home turf". Fee revenue covered only a small fraction of the cost of securing the chain, so the DAO treasury was paying for security. This isn't a new project deciding where to launch. It's an established chain, with its own validators and years of history, concluding that being a separate L1 isn't worth what it costs. What changes: * Gnosis Chain stops running its own validator set. Ethereum takes over settlement, meaning the final record of who owns what. * Gnosis still produces its own blocks, every 2 seconds, and proves its state to Ethereum every Ethereum block. * Users keep their addresses, balances and contracts, and xDAI stays the fee token. Gnosis calls this the first instance of an "Ethereum Economic Zone" (EEZ). The EEZ is a framework for rollups that are closely tied to Ethereum, co-led by Gnosis and ZisK and co-funded by the Ethereum Foundation. According to Gnosis, the EEZ gives it something no L2 currently offers. A contract on Gnosis can call a contract on Ethereum mainnet and use the result in the same transaction, with no bridge and no waiting. Apps on Gnosis could then use Ethereum's liquidity directly, as if it lived on Gnosis. Gnosis does give something up. It no longer controls its own settlement, and at launch Gnosis Ltd runs the sequencer, the single operator that puts transactions in order. Gnosis says it will come back to the DAO with evidence before deciding whether to decentralize it. That's a real trade-off, but the risk is limited. Per Gnosis, every block is proven and settled on Ethereum, so the sequencer can't forge state, steal funds or roll back finalized history. It can only delay or leave out transactions. On a standalone L1, the chain's own validators are the last word. Here, Ethereum is. Proving starts with an interim setup and moves to ZK proofs as the full EEZ spec is completed, which Gnosis expects over the course of 2027. The proposal targeted the switch to a rollup for around the turn of the year. After that, the key milestones will be users having the capability to force a transaction through Ethereum if the sequencer ignores them, the upgrade keys being spread across a large number of independent parties or eliminated altogether, and users being able to withdraw without the operator's cooperation. Fees, uptime and withdrawals should be similar to the old chain. This sets a precedent. Plenty of L1s run their own validators, bridges, tooling and liquidity programs, and pay for all of it themselves. Gnosis evaluated the costs and decided settling on Ethereum is the better deal. The L1 premium is gone, and I expect more established chains to come to the same conclusion.