Gnosis to Execute Its Own Merge in Shift to PoS

Layer 1 Will Be the First Blockchain After Ethereum to Adopt New Consensus Mechanism

Gnosis Chain, a Layer 1 network, is poised to become the second blockchain to transition to Proof of Stake consensus via a chain merge.

The upgrade, which is expected to go live on Thursday around 1:40 PM Eastern Time, will unify Gnosis Chain’s Proof of Stake Beacon Chain with its Proof of Authority (PoA) mainnet, abandoning PoA consensus in the process. 

20 Validators

Gnosis Chain now boasts the No. 3 validator network with more than 100,000 nodes, ranking behind Ethereum and Bitcoin. Gnosis Chain was secured by just 20 validators under PoA, making it highly centralized.

Only one GNO is required to run a validator on the Gnosis Chain, meaning there are few barriers to validating the network.

What is The Merge?

A Step-by-Step Guide to Ethereum’s Historic Upgrade

Gnosis Chain paused its native bridge on Wednesday in preparation for the merge, and will be restored once the upgrade is stable. Its native token, GNO, has rallied almost 7% in the last 14 days compared to a 4% jump in Ethereum, according to CoinGecko.

Ethereum’s highly anticipated chain-merge was executed in September. The transition away from Proof of Work in favor of PoS reduced the network’s energy expenditure by more than 99% alongside an 88% drop in ETH inflation.

Gnosis Chain’s merge was executed at block height 58,750,000,000,000,000,000,000, the same as Ethereum, as a tribute to the network. 

Key Benefits

Gnosis also completed a chain merge for its testnet, Chiado, in August.

The Gnosis Chain merge offers two key benefits to the network. Firstly, moving from 20 to more than 100,000 validators transitions the chain from being highly centralized to among the most decentralized blockchain networks.

The Merge also ensures that Gnosis Chain will remain compatible with future Ethereum upgrades. 

On Wednesday, Peter Szilagyi, an Ethereum developer, tweeted that Ethereum’s coming EIP-4844 upgrade will be the first feature that most rival Ethereum Virtual Machine (EVM)-compatible blockchains can’t support. 

“Without a beacon chain, a network cannot support [EIP-4844],” Szilagyi said. “This means Ethereum will diverge from all other EVM chains… Competing chains could end up being feature-incompatible.”

“All other EVM chains except Gnosis Chain,” Martin Koppelmann, the co-founder of Gnosis Chain, replied.

Sidechain

Gnosis Chain was created in November 2021 when Gnosis, then a blockchain infrastructure provider, merged with xDAI, an Ethereum sidechain designed to help the network scale. Gnosis allocated 400,000 GNO tokens worth $200M at the time to programs incentivizing development on the new chain.

GNO represents a $231M market cap and last changed hands for $89, but is down 85% from its all-time high in November 2021, according to CoinGecko.