GnosisDAO has approved a plan to retire Gnosis Chain's independent validator set and settle the network to Ethereum instead. The move unlocks roughly 350,000 GNO and ends the treasury-funded subsidy that has paid for staking, while shifting settlement security to Ethereum validators.
GnosisDAO approved a shift from standalone Layer 1 to an Ethereum-settled rollup, retiring Gnosis Chain's own validator set. The change unlocks roughly 350,000 GNO — about 27% of circulating supply — once the validator set is sunset, and it ends the treasury-funded staking subsidy that has propped up the chain's economics.
GNO Unlocks as Gnosis Retires Its Validators
Gnosis Chain switched to proof-of-stake in December 2022, requiring just one GNO per validator against Ethereum's 32 ETH. That low bar produced one of the largest validator sets in crypto, above 100,000 at the time of the merge, but not the fee revenue to sustain it.
The proposal says network fees cover "only a small fraction of even the minimal cost of security," leaving GnosisDAO's treasury to fund the rest through GNO issuance that dilutes non-stakers by about 2.3% a year, against sub-1% on Ethereum. The chain holds about $96.4 million in total value locked.
The validator set was already shrinking before the vote. GnosisDAO's July community summary put active validators at roughly 52,000, down from about 76,000 a month earlier, with approximately 295,000 GNO staked.
Ethereum Validators Take Over Settlement Security
Under the approved plan, Ethereum validators replace Gnosis Chain's own set as the source of settlement security, and existing bridge validators are intended to move into a role operating the network's proof systems instead. For users and developers, xDAI remains the gas token, and addresses, balances and contract state carry over without migrating to a new chain.
The proposal frames the reduced decentralization as deliberate: a misbehaving composer could delay or exclude transactions but could not forge state or reverse finalized history. GNO's replacement economic role stays unfinished — the plan intends to tie the token to fee revenue from network activity but has not picked a mechanism, leaving fee sharing and buybacks as options for a later proposal.
Rollup Composability Starts One-Directional
The design targets two-second blocks that settle to Ethereum Layer 1 and prove state every Ethereum block, with an interim proving setup likely built on trusted execution environments before moving to real-time zero-knowledge proving. At launch, synchronous calls run only from Gnosis into Ethereum contracts and liquidity, with an intents-based bridge covering the gap until bidirectional composability arrives.
Gnosis Ltd will initially run a centralized composer that orders transactions and submits them for proving and settlement. GnosisDAO requested no funding for the transition and targets the first block for December 2026 or January 2027, with bidirectional composability and real-time proving expected during 2027.
Sources: The Defiant, Crypto Briefing
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