GnosisDAO votes to retire Gnosis Chain, frees 27% of GNO

GnosisDAO approved a governance direction, GIP-153, to retire Gnosis Chain as a standalone Layer 1 and convert it into a zero-knowledge-proven rollup that settles directly to Ethereum. The decision would release about 350,000 staked GNO, roughly 27% of the token’s circulating supply. The vote approves the transition direction only; it does not authorize a final launch plan or funding package.

Under the approved direction, Gnosis Chain would stop operating its own independent validator set and instead rely on Ethereum validators for security while using ZK proofs to settle blocks on Ethereum each block. Ending on-chain staking would make the currently staked GNO liquid again; those tokens already count toward circulating supply but would cease to secure Gnosis Chain.

GIP-153 is a governance-level mandate rather than a finished technical design. The proposal targets an initial Ethereum Economic Zone rollup release around December 2026 or January 2027, subject to the readiness of required infrastructure. GnosisDAO must approve specific funding and the final technical architecture in later governance steps before the rollup is deployed.

The change will require a redesign of GNO’s economic role. Today, validator rewards come from the Gnosis treasury because transaction fees cover only part of security costs; that subsidy has been estimated to dilute non-stakers by about 2.3% annually. Once staking ends, the subsidy would stop. Gnosis is considering mechanisms such as fee-sharing or token buybacks tied to rollup revenue and plans a follow-up governance proposal after the rollup’s operating economics are clearer.

The technical model aims to let Gnosis applications access Ethereum liquidity without cross-chain bridges. Planned synchronous composability would allow a Gnosis contract to call an Ethereum contract and use the result within the same atomic transaction, enabling same-block interactions between the rollup and mainnet. Several decentralized finance projects, including Aave, Spark, Fluid, CoW Swap, Safe and Centrifuge, have committed to build within the planned environment.

The transition includes a decentralization trade-off. Gnosis Ltd. is expected to run the sequencer that orders transactions and produces blocks initially, while proofs and final settlement are moved onto Ethereum. GIP-153 frames a reduction in execution-layer decentralization as deliberate, shifting trust from a local validator set toward Ethereum’s validator security and the sequencer operator.

Market reaction was mixed. GNO rose roughly 10% to about $136 at one point, its highest level since May; broader Ethereum market movements also influenced trading during that period.

Martin Koeppelmann, co-founder and CEO of Gnosis, described the approach as a choice to keep Gnosis closely connected to Ethereum’s economy: “After the transition, anyone with a mainnet wallet will be able to use a Gnosis dapp in a single transaction, and a Gnosis account will be able to use anything on Ethereum. Same block, no bridges.”

Next steps include developing the technical design, securing any necessary funding, and passing follow-up governance proposals to establish the rollup’s economic model and operational details. The timeline for full transition depends on those approvals and on the readiness of infrastructure to support ZK settlement on Ethereum.