The economic case for Gnosis Chain today is weak.
The chain collected around $105,000 in transaction fees over the past 12 months. Even if we raised fees to where we realistically could, we are looking at $1-2 million a year at most. Operating the chain costs the DAO $7-10 million a year, depending on whether or not you count staking rewards, which exclusively go to GNO holders for securing and validating the network. That covers client development, infrastructure provisioning (block explorers, RPC endpoints, and so on), bridge operations, liquidity provisioning for strategic token pairs, and the costs of deploying, integrating, maintaining, and incentivizing third-party protocols such as money markets and CEX integrations. For context, Base generates around $68 million a year in fees, Arbitrum around $20 million. As it stands, Gnosis Chain is not sustainable.
Ethereum has changed. Blockspace has expanded sharply, and base fees have collapsed. The gas limit doubled from 30 million to 60 million through 2026 with 100 million targeted by year-end. Base fees are down from over 20 gwei in 2022 to under 1 gwei in normal conditions today, with daily averages around 0.5 gwei through spring 2026. The trajectory is for fees to stay low.
We have a plan to fix it.
For this to be infrastructure people rely on long-term, the people using it need to pay enough to cover the cost of running it. The EEZ is how we get there.
Enter the EEZ.
The Ethereum Economic Zone is an initiative we lead together with Zisk, co-funded by the Ethereum Foundation, to enable synchronous composability between Ethereum L1 and rollups: a smart contract on one chain calls a contract on another, receives a result, and completes the sequence atomically. No bridges, no async delays, no trust assumptions beyond Ethereum itself. Recent advances in real-time ZK proving have made this feasible for the first time. Jordi and I demoed it at EthCC.
The EEZ is a general framework, open to any chain or L2. The one core requirement is that participating networks follow Ethereum’s lead as the settlement layer. State transition function, gas, block time, validator set, sequencer design: anything goes.
This opens a perspective for chains that was long discussed but never realistic: specialization. Previously, what did it help to have a strong privacy model or a novel identity solution on your chain, if all the assets and dapps were elsewhere and communication between chains was so burdensome that applications could not natively live across chains? Synchronous composability changes that. The framework lets specialization go further still. Chains in the EEZ can be purpose-built for a single application: a payments-focused L2 written in Go or Rust with no general-purpose VM, a privacy-focused L2 with encrypted state and ZK transactions by default, or a non-custodial central order book exchange with matching in the consensus path. The benefits are the same in each case: smaller attack surface, lower compute overhead, a state transition function fit to purpose.
Gnosis L2 itself would be a general-purpose chain. It would inherit existing state and deployed contracts, so the state transition function could not be rewritten without breaking what already runs. Block time, on the other hand, would drop to around one second. Within those constraints, we still have a specialization to make. Our argument is for security.
DeFi’s security problem persists in part because of credible neutrality: Ethereum is trustworthy as a base layer precisely because it includes every transaction that pays for gas, regardless of intent, but that same neutrality means exploits travel as freely as everything else. We think there is a niche for a chain that trades some of that neutrality for security. The questions about how are worth working out in the open.
We propose turning Gnosis Chain into the first EEZ-compatible network. Fast block times. Cheap gas, similar to today. But with full Ethereum compatibility: from Gnosis L2, you can send funds to any Ethereum address and they arrive as fast as a native Ethereum transaction, with perhaps a 10-20% chance of a single 12-second block delay. In practice this means:
- Deposits to any exchange that supports Ethereum, directly from Gnosis L2
- DEXs like CoW Swap can give Gnosis L2 users the full liquidity of Ethereum mainnet
- Money markets like Aave can run hybrid deployments drawing on native L1 liquidity when needed
- Anything you can do on Ethereum is now available on Gnosis L2 as well
Transactions that require L1 interaction will have similar speed and cost properties to regular L1 transactions. But this creates superior experiences. Cheap, fast transactions like settling Gnosis Pay or refilling a card after a spend can still happen on-chain. Larger trades can route via Ethereum and accept the additional gas; smaller transactions stay cheap.
Does this close the gap? Operating costs run $7-10 million a year, and the L2 transition cuts most of that. Protocol deployment incentives, CEX integrations, and strategic liquidity provisioning are no longer needed once Gnosis L2 plugs into Ethereum directly. A centralized sequencer, recommended for now on security grounds, removes the staking-rewards line. Even before that reduction, reaching half of Arbitrum’s current fee revenue or about a tenth of Base’s would close the gap. Neither is a heroic target for the first network offering synchronous composability with Ethereum mainnet.
Gnosis Chain already has an active ecosystem of smaller protocols. In addition, two anchor customers are built into the Gnosis stack: Gnosis Pay transactions settle on-chain. The Circles user base on Gnosis App is direct demand for blockspace. We are also under MOU with a UAE-based super-app with users across emerging markets, to explore using Gnosis Chain for payments.
For each of these, the EEZ also unlocks growth opportunities. Gnosis Pay can settle and source funds across any Ethereum asset, opening the card’s addressable market. Circles/ Gnosis App users can gain access to mainnet DeFi without bridging. The super-app users get a single app route to the broader Ethereum economy.
These three are the start. We have a growing base to build from and the EEZ becomes an engine that accelerates that growth.
We get to be first. Other networks could eventually join the EEZ; the architecture is open. But protocols using the EEZ still have to deploy somewhere, and the chain they deploy on captures all the fees they generate locally and a share of the fees on their interconnect calls. For any protocol that wants EEZ composability without L1 gas costs, the question is which non-Ethereum EEZ chain to deploy on. For now, Gnosis is the only answer. It will remain a strong one even when others arrive. The team and the brand have years of trust in the Ethereum ecosystem, and Gnosis has long served as neutral ground for protocols that want to build without taking sides.
That choice compounds. Cross-network calls within the EEZ always cost more than calls within a single network, so a protocol that interacts heavily with others on Gnosis Chain gets cheaper economics by collocating there. The more that lands on Gnosis early, the harder it is for a second EEZ chain to peel protocols away later. Latecomers face a network that has already compounded.
Ethereum L1 activity will grow with the block gas limit, but not everything should run on L1. An execution environment that is cheaper than L1 and composable with it occupies a distinct and durable position. No current L2 holds that position.
A single atomic call from L1 into Gnosis Chain and back is achievable by end of year. That is 40-50% of the eventual technical work but captures most of the near-term economic reward. The bigger rewards come once applications start treating synchronous composability as a primitive.
My TL;DR: Against the status quo, the pivot has an asymmetric payoff: the L2 transition cuts most of the cost whether or not the EEZ thesis fully plays out, while the upside is a structural position no current L2 has, composable with Ethereum, cheaper than L1 elsewhere, and credibly neutral.
Three things have to go right, and all three sit on foundations we have already built. We initiated the EEZ alongside Zisk, with Ethereum Foundation backing. The team and brand have the trust to attract protocols. Zisk and the EF research community are actively working on real-time ZK proving. Beyond that, the longer-term question of how Gnosis L2 specializes, including whether security is the right angle, is not a Day 1 decision and is best worked out in the open.
We need a path forward, and this is the best play we could come up with.
The economic case for Gnosis Chain based on the status quo is weak. The case for Gnosis Chain in the EEZ is not. A GIP on whether to formally join will follow.