Woofun AI reports that Gnosis Chain has formally acknowledged the strategic failure of its independent Layer 1 model, initiating a pivot toward an Ethereum Economic Zone (EEZ) ZK Rollup architecture through governance proposal GIP-153. Submitted on July 27 by ChandlerZ for Foresight News, the proposal was jointly drafted by Gnosis co-founder Friederike Ernst alongside Philippe Schommers and Ben Carvill. Currently in its initial phase, the document seeks community consensus on this directional shift without requesting immediate funding, explicitly stating that the independent L1 role is no longer viable.

The core argument rests on the unsustainable economics of maintaining a standalone security infrastructure. Gnosis Chain’s transaction fee revenue is insufficient to cover cybersecurity expenses, necessitating subsidies from the GnosisDAO treasury that dilute non-stakers by approximately 2.3% annually. In stark contrast, Ethereum’s annual secondary offering rate remains below 1%, with fees offsetting much of this dilution. With a total value locked (TVL) of roughly $91 million and a GNO token market cap of $280 million, Gnosis Chain occupies a marginal position in L1 competition. Beyond security, the DAO must fund block explorers, RPC endpoints, and third-party protocol incentives, while failing to generate network effects comparable to the mainnet.

The proposal further critiques the broader Layer 2 landscape, noting that among the 100 existing L2s, most lack genuine utility. Those with usage succeed not through technical differentiation but by leveraging pre-existing distribution channels. Consequently, the challenge of differentiation merely shifts from the L1 level to the L2 level. Gnosis concludes that a transformation is only justified if it introduces a capability absent in current L2s. This leads to the central thesis: the necessity of synchronous composability, a feature currently missing across the entire L2 ecosystem.

The proposed solution is built upon the Ethereum Economic Zone (EEZ) framework, launched in March 2026 at the EthCC Cardiff conference by Friederike Ernst and Jordi Baylina, founder of Zisk, with support from the Ethereum Foundation. EEZ’s defining characteristic is synchronous composability. Post-transformation, Gnosis Chain will produce blocks every 2 seconds, with each block undergoing state proofing and settlement on Ethereum L1. Smart contracts on Gnosis EEZ will be able to call Ethereum mainnet contracts within a single transaction, retrieving return values for atomic execution. This eliminates the need for bridges, allowing direct access to mainnet liquidity, oracles, and exchange channels as if they were locally deployed.

Initially, this composability will be one-way, supporting only L2 to L1 calls. Full two-way cross-instance composability is expected to be developed throughout 2027. During the transition, an intent-based bridge will provide temporary two-way atomic bridging. The proposal estimates that this first version will deliver 80% of the value of synchronous composability while requiring only 40% to 50% of the engineering effort of a complete solution. This approach contrasts sharply with existing cross-Rollup solutions, which are asynchronous and suffer from message delivery delays ranging from minutes to hours. Competitors like Optimism’s Superchain, Polygon’s AggLayer, and =nil;’s zkSharding are addressing L2 fragmentation but have yet to achieve true synchronous atomic execution. The EEZ framework is already operational on a devnet, demonstrating end-to-end cross-chain execution.

Woofun AI data shows that the technical foundation relies heavily on contributions from Jordi Baylina, creator of the ZK proof programming language Circom and co-creator of Polygon zkEVM. Baylina founded Zisk in June 2025 to develop ZKVM for real-time proofs.

However, the first version of Gnosis EEZ will not utilize ZK proofs; instead, it will employ temporary verification methods such as TEEs, with specific mechanisms to be defined during the technical specification phase. Real-time ZK proofs will be introduced only after full EEZ specifications are completed. The proposal asserts that trust assumptions will decrease, not increase. Friederike Ernst previously noted that Ethereum’s primary issue is fragmentation, not scalability, as each new L2 creates a walled garden. Founding members of the EEZ alliance include Aave, Titan, Beaver Build, Centrifuge, and xStocks. The framework operates as a Swiss nonprofit organization, led by Gnosis and Zisk, with all software open source and no native token.

The transition will significantly impact GNO stakers and validators. Approximately 350,000 GNO tokens, representing 27% of the total supply, are currently staked. These stakes will be fully unlocked upon implementation, leading to the withdrawal of independent validators. The proposal identifies this as a major regret but plans to repurpose the validator community, potentially involving them in Gnosis VPN operations. Existing bridge validators will transition into Prover nodes, serving as initial operators in an M-of-N multi-prover architecture. Sequencing rights will be transferred to centralized operations by Gnosis Ltd. The proposal explicitly defends this move, arguing that centralized sequencers pose bounded risks since each block is proven and settled on Ethereum. The maximum harm is limited to delays or transaction rejections, not state forgery or fund theft.

Furthermore, the proposal argues that maximizing censorship resistance is an exclusive domain of Ethereum and is incompatible with financial applications requiring fraud response mechanisms, compliance measures, and recourse options. A chain controlled by an operator can intercept suspicious transactions, a feature viewed as a strength. Value capture will shift from staking rewards to transaction fees, with dynamic pricing based on usage. Specific mechanisms for fee sharing or buybacks will be determined in subsequent GIPs once the Prover economic model is observable. The immediate selling pressure from unlocked stakes remains a critical market concern.

This pivot must be viewed within the context of radical governance restructuring by GnosisDAO. On June 27, 2026, GnosisDAO approved GIP-150, allowing GNO holders to redeem DAO treasury assets proportionally. The liquid assets in the treasury were valued at around $223 million. This proposal transformed GNO from a pure governance token into a direct claim on the DAO’s balance sheet. The total treasury value is approximately $300 million, comprising 51% GNO, $91 million in ETH, and $23 million in stablecoins. Together, GIP-150 and GIP-153 enable token holders to exit at net asset value while completely rewriting the underlying technical architecture.

Gnosis Ltd aims to retain the community by offering an exit option alongside EEZ’s synchronous composability. Strategically, Gnosis Ltd will act as both co-architect of the EEZ framework and operator of the first production instance, commercializing its expertise by providing EEZ instance as a service to banks and fintech companies. While the framework is a public good, the deployment expertise is proprietary. Gnosis’s own Pay, Circles, and VPN products will serve as consumer-level anchor applications, leveraging direct access to L1 stablecoin liquidity.

The roadmap outlines community voting in August or September 2026, with the genesis block targeted for late 2026 or early 2027. By then, validators will withdraw, and the first EEZ block will be generated. Complete EEZ specifications, including two-way composability, nested calls, and real-time ZK proofs, are expected to be implemented throughout 2027. Governance will be layered: EEZ protocol changes will follow Ethereum’s process, with Ethereum L1 EIPs automatically reflected in Gnosis Chain. GnosisDAO will continue to govern the Gas token policy, fee distribution, and ecosystem treasury. Long-term governance for Prover operations will be specified in future GIPs. Key variables include whether GIP-153 achieves consensus, the market impact of unlocking 350,000 GNO tokens, the viability of the new fee-based tokenomics, community acceptance of TEE-based temporary verification, and the practical censorship risks of centralized sequencers.

Synchronous composability presents a compelling vision, yet the path from current single-directional L2 to L1 calls with TEE proofs to the ultimate experience of two-way ZK proofs remains long. This marks a decisive admission that independent L1 status is economically unviable for Gnosis, forcing a reliance on Ethereum’s security and liquidity while attempting to differentiate through architectural innovation rather than standalone scale.