Sorry, but this sentence alone in trying to justify the existence of a possible freeze function is problematic in that it introduces a certain bias on what the top jurisdictions are and which one of their arbitrary decisions are to be complied with. Normally, I would not really care about you guys deciding to have a freeze function, but if it has the potential to affect Gnosis Chain’s “native” gas token, I have to point out the elephant in the room.
This “trust me bro, we won’t freeze your bridge contract” approach is outright funny. If you guys at Sky decide to comply with a decision of an arbitrary “top jurisdiction” asking you guys to freeze the bridge contract as you do not have the control over freezing a certain wallet on Gnosis Chain, it will open up a huge can of worms and could probably become the top story at rekt.news as it will technically render all xUSDS on GC worthless.
Other than that, to add to the discussion, I do not have a specific preference around what token we end up using as the native gas token of the chain as long as it is something that we control or as long as it is something that is as immutable as it goes. And even the small possibility of the tokens in the bridge contract getting frozen is good enough reason for us to consider moving away from USDS. It would be just ridiculous in terms of narrative to adopt something that offers higher yield with higher risk when all we are doing with Hashi is to make the bridge security as our top priority.
When gas exploded on Ethereum in late 2020, one of RealT’s arguments for migrating to the Gnosis Chain was that operational costs were far more predictable with a stablecoin. Today, RealToken’s TVL represents the protocol with the largest TVL on Gnosis.
As I understand it, L2 EVMs such as Base, optimism and arbitrum now settle their transactions cheaper thanks to EIP-4844 and blobs.
The Gnosis blockchain’s settlement mechanism seems to be closing in on Ethereum L1. Will we achieve the same result as Ethereum in 2020 if Gnosis becomes congested and the price of GNO rises by a factor of 10?
Moreover, another advantage of dai was that sdai had a higher yield on Gnosis than on any other chain. Gnosis DAO never marketed this competitive advantage, which could have brought it many users…
In its growth plan, Gnosis seems to be relying a lot on the gnosis card. With the option of depositing sdai to borrow eure at a lower rate, this strategy could attract many users.
From my point of view, if we want to try to bring more utility to GNO, the best decentralization of the chain possible and increase the GNO price, I think replacing xdai with GNO in the gas token is a wise choice.
On the other hand, from a business point of view, keeping a stablecoin as a gas token seems interesting.
We wanted to weigh in here as this is a critical decision in the Gnosis chain and ecosystem timeline. While we are not directly involved with Gnosis, we have been long-time observers and admirers of the ecosystem.
Many of the points discussed so far are valid and propose viable paths forward for the Gnosis chain gas token. Gnosis using xDAI as gas has enabled it to simplify cheap UX transaction fees on the chain for a couple of years now. Switching to a new stablecoin solution like USDS or continuing with xDAI has been discussed above, and each path forward comes with some significant trade-offs.
Although the Maker ecosystem has been a major contributor and collaborator with Gnosis and that relationship should continue, it doesn’t necessarily have to be through using their assets as gas tokens specifically. We agree with the points raised by @Pray.eth that having a major external dependency on such a critical component of the Gnosis ecosystem seems to contradict Gnosis’ focus on a robust, decentralized network and credible neutrality.
The benefits of using a stablecoin asset are well known to Gnosis, and the risks and trade-offs have been discussed above. However, it is our belief that the UX benefits of cheap, reliable transaction costs can potentially be emulated with a native gas token by changing the traditional PoS gas fee calculation logic and potentially adjusting some of GNO’s supply dynamics.
Using a native token for gas also comes with additional benefits:
Retaining demand value within the Gnosis ecosystem.
Creating a circular economy where supply and demand are controlled by the network/DAO.
Reducing external economic dependencies.
The concerns around required circulating supply and validator GNO concentration can also be addressed and managed in our opinion.
We believe Gnosis’ current situation presents the DAO with an opportunity to seriously consider what a transition to a native gas token would look like and the benefits it could provide to the network. Before replacing xDAI with another decentralized stablecoin, we think a native GNO gas model should be thoroughly re-explored.
There are two issues here imo: (1) absolute operational (gas) costs, and (2) predictability
I can see RealT wanting to switch off Ethereum in 2020 to avoid the ridiculously high gas costs, i.e. absolute costs of doing business on Ethereum. But the lower gas costs on Gnosis Chain would be the same whether you use GNO, or xDAI, no? Do I care if I spend .0025 xDAI or 0.00001562 GNO for gas when the absolute value is the same?
I’m also not sure why xDAI denominated gas is more predictable than GNO denominated gas. Costs are determined by network capacity, no? I accept if your accounting is in USD, you have the extra step of converting gas costs to GNO. But that seems like a small price to pay for a more secure, more independent network.
Of course, as RealT makes up a large percentage of our TVL, it would make a lot of sense to discuss this move with them beforehand, to make sure they understand the reasons for a switch to GNO, and what impact it will have on them.
But I can’t see how it would increase the operational costs of doing business on Gnosis Chain, either in absolute terms or in the case of predictability.
I really like the ETH option. In fact, it seems like the best possible option to me.
As I mentioned above, I’m a supporter of using the asset with the largest network effect as the gas token (meaning USDT or USDC). However, I also believe that if we are to be dependent on something, it shouldn’t have a freeze function, as that introduces significant risks.
ETH is an asset already owned by the most users.
From the perspective of Gnosis Chain, we should focus on making onboarding as easy as possible for users while avoiding unnecessary third-party dependencies.
Currently, my favorite options are:
ETH
GNO
A decentralized stablecoin
It’s probably not feasible to use any existing decentralized stablecoin because they are too small.
So, effectively, for me, it comes down to ETH vs. GNO.
ETH is already held by almost everyone, it signals alignment with Ethereum, it would further cement Gnosis as a critical part of the ecosystem. Also earning ETH by staking GNO would imo make staking even more attractive than it is right now, especially if we do see adoption for the chain and increased block rewards from execution.
GNO would be a potential nice second choice, and would align best with the EVM with the gas token being also the reward token.
I think it’s still too early to chose a decentralized stablecoin as gas token. xDAI had a good run, but it’s still a bit cumbersome to get, vs. straight up ETH.
I think the idea of using GNO as a gas token is great. It’s too risky to rely on third parties when it comes to this.
Even with XDAI the user experience wasn’t great, it’s not that easy to get XDAI without going the ETH route. On centralized exchanges, XDAI was either not available at all or the liquidity was very low. This might change in the future if we use GNO as a gas token. It is also much less confusing for everyone if there is only one token for everything.
Since Maker/Sky has decided to make changes, we should take the opportunity to switch completely to GNO and take the positive side effects with us. And whether the gas costs are now paid with a stable coin or not is not relevant from my point of view, much more important is how easily I can get the token to pay the gas costs at all.