Gnosis (GNO): Bridging Web3 Tech With Mainstream Usability
For years, the Ethereum (ETH) blockchain has suffered from poor scalability and high costs caused primarily by network congestion. Many solutions — mainly in the form of Layer 2 rollups and sidechains — have emerged in recent years to address Ethereum's performance and cost inefficiencies. Many of these have managed to offer viable alternatives in the form of much better transaction processing times and considerably lower gas fees. However, plenty of these platforms suffer from limited decentralization due to the low number of validator nodes. In the case of rollups using a single sequencer node, a critical part of rollup architecture, there are serious concerns about extreme forms of operational centralization.
Thankfully, there is a project within the Ethereum ecosystem that has truly dedicated itself to the blockchain ethos of maximum decentralization. Gnosis is one of the oldest and most established Ethereum sidechains, and boasts a highly decentralized and reliable network of over 200,000 validators. It started as a decentralized app (DApp) on Ethereum, focused on prediction markets, but merged in 2022 with the xDAI sidechain to form a new entity, Gnosis Chain. The merger ushered in a new era for the unified project, which has become probably the most decentralized among all blockchain platforms within the wider Ethereum ecosystem, excluding Ethereum itself, of course.
Additionally, the Gnosis sidechain features a benefit that even Ethereum Layer 1 can't match — gas fees on the network are charged in xDAI, a stablecoin indirectly pegged to the U.S. dollar, delivering greater cost stability for users and developers.
In this article, we conduct an in-depth examination of Gnosis, the leader of blockchain decentralization in the Ethereum universe.
Key Takeaways:
Gnosis (GNO) is an Ethereum sidechain that features an impressive 200,000-strong validator community and a dual-token model, with the xDAI stablecoin used for gas fees and the GNO token serving as a staking and governance asset.
Gnosis began as an Ethereum-based app that focused on prediction markets, but merged in 2022 with the xDAI sidechain to form the new Gnosis Chain project.
The chain's latest iteration, Gnosis 3.0, aims to power mainstream applications by leveraging the platform's scalability, cost and decentralization benefits.
What Is Gnosis Crypto?
Gnosis (GNO) is an Ethereum sidechain that offers low transaction costs, high scalability and gas fees denominated in a USD-pegged stablecoin. It boasts the highest degree of decentralization — as measured by the number of validators — among all Ethereum-linked sidechains and Layer 2 solutions. Among the most established and oldest blockchain solutions, Gnosis is designed to tackle Ethereum's heroically unyielding cost and performance challenges.
The original Gnosis project, now referred to as Gnosis 1.0, was conceptualized in 2015 as a prediction market platform. It was launched as an Ethereum DApp, and was owned by the Consensys blockchain development company. In 2017, Gnosis transitioned into an independent entity and expanded its focus to building decentralized infrastructure solutions for Ethereum. This marked the beginning of the project's second major stage, Gnosis 2.0.
In parallel with the original Gnosis, another early Ethereum-focused blockchain project, the xDAI Chain, was developing a scalable Ethereum sidechain that used a stablecoin for gas fee payments. xDAI and Gnosis announced a merger in 2021, with the new project branded the Gnosis Chain. The two projects merged on a technical level in December 2022. Over the next several years, Gnosis Chain has firmly established itself as a leading Ethereum sidechain, offering low costs and great scalability while running an extensive, community-driven network of more than 200,000 validators.
In early 2024, the now-unified project announced its next major stage, Gnosis 3.0, which aims to leverage the sidechain's superior technical properties and massive decentralized network in order to power mainstream web3 applications across different sectors, particularly in areas like payments, financial infrastructure and wallet solutions.
Although Gnosis has moved away from its niche focus on prediction markets, it maintains DApps dedicated to this specialized sphere. In fact, Gnosis continues to be viewed as the leading platform specializing in this area, with its GNO token holding the top position by market cap in the crypto industry’s prediction markets category.
Source: CoinGecko
What Is Gnosis Chain?
Gnosis Chain forms the infrastructural backbone of the entire Gnosis ecosystem. Its sidechain is anchored to Ethereum and features five-second block-confirmation times and low gas fees. For instance, in December 2024, the network registered average gas fees of around $0.04.
Gnosis Chain has inherited most of the properties of the original xDAI chain. It uses a stablecoin cryptocurrency, xDAI, that’s pegged to MakerDAO's (MKR) algorithmic stablecoin, Dai (DAI), which in turn is soft-pegged to the U.S. dollar. As such, xDAI is indirectly pegged to the greenback. The use of a fiat-pegged stablecoin provides greater stability and certainty for users and developers utilizing the Gnosis Chain.
The chain's more than 200,000 validators (as of the start of 2025) make Gnosis the absolute leader in decentralization among all Ethereum-linked sidechains, Layer 2 rollups and similar platforms. The highly decentralized nature of the chain helps ensure great levels of security, transparency and trust in the platform.
Gnosis Chain currently features support for around 200 DApps across areas as diverse as blockchain analytics, decentralized finance (DeFi), oracles, non-fungible tokens (NFTs), prediction markets, wallet solutions and more. DeFi-related apps — such as payment protocols, liquidity managers and permissionless decentralized exchange (DEX) platforms — as well as blockchain infrastructure projects, such as oracles, data exchange protocols and decentralized development tool kits — are the niches most prominently featured on the chain.
How Does Gnosis Chain Work?
Gnosis Chain is an Ethereum virtual machine (EVM)–compatible blockchain that uses a proof of stake (PoS) block validation model to secure network consensus, and a dual-token model to power its operations. Validators on the chain secure the right to process transaction blocks by staking GNO tokens. Gnosis doesn't support stake delegation, however, so if you’d like to stake GNO without running a validator node, you can use external staking or liquid staking platforms that support the token. Examples include StakeWise (SWISE) and Chorus One.
In order to run a validator node and support Gnosis Chain block processing, you’ll need to download the requisite software and stake at least 1 GNO (around $264 as of Jan 7, 2025). The software needed to operate a validator node on Gnosis is pretty much the same as that used for Ethereum validation, with some minor modifications. This modest minimum staking requirement, and software setup nearly identical to Ethereum's, are significant reasons why Gnosis has an enormous network of over 200,000 validators.
Validators can choose to run a node either via the cloud or using their own hardware. However, the Gnosis project explicitly recommends the latter option to ensure maximum security, censorship resistance and credible neutrality.
While validator nodes stake funds and earn rewards in GNO tokens, gas fees for transactions on the network are paid in another cryptocurrency, xDAI, which is commonly acquired with MakerDAO's Dai stablecoin via a dedicated bridging solution — the Gnosis Bridge.
The Gnosis Ecosystem
In addition to its 200,000-strong validator community and around 200 DApps operating on its platform, the Gnosis ecosystem also includes several entities fundamental to the project's evolution and success — GnosisDAO, Gnosis Studios, GnosisVC and Gnosis Labs.
GnosisDAO
GnosisDAO is the platform's decentralized governance entity, powered by the holders of the GNO governance token. The DAO was originally created in 2020 to fully decentralize control of the platform and turn it into a project governed entirely by its user community. GnosisDAO uses a multi-stage governance process, whereby discussions are initiated and considered via the platform's online forum. Discussions can revolve around technical topics, protocol rules, DAO grant allocations and more.
If an issue being discussed gains enough traction, a forum poll can be created, whose users can then cast their votes. If this forum poll generates enough support votes, the process moves to the final stage, in which GNO holders vote to either approve or reject the proposed action.
Gnosis Ventures (Studios and Capital)
Gnosis Studios is a product innovation lab created by the platform to develop and incubate promising web3 applications and infrastructure solutions. Among the solutions launched via Gnosis Studios is a decentralized payment protocol, Gnosis Pay, and a personal currency exchange platform, Circles.
Successful spin-offs of Gnosis Studios include the multisig wallet solution Safe and the DEX aggregator CoW DAO.
GnosisVC is a venture capital (VC) fund set up by the Gnosis project to invest in early-stage web3 projects, particularly in areas like financial services, real-world assets (RWAs) and blockchain infrastructure. GnosisVC boasts an extensive portfolio dating back to 2019. In 2020, one of the numerous projects the fund invested in was MakerDAO, a stalwart of the DeFi sector.
The fund's latest investments include projects such as the self-custodial wallet app Zeal, the decentralized identity solution idOS and the zero-knowledge (ZK) proof aggregator Electron. This is only a small subset of the web3 initiatives GnosisVC added to its portfolio throughout 2024. Per information on Gnosis's website, the VC fund has invested in more than a dozen projects in 2024 alone, and dozens of projects within the past five years.
Gnosis Labs
Gnosis Labs is a development hub in which experimental web3 projects are first tested, iterated and improved before decisions are made on their future potential. The hub focuses heavily on artificial intelligence (AI) initiatives, and is primarily designed to foster innovation and breakthrough discoveries at the junction of AI and blockchain technologies.
To underscore its commitment to AI, Gnosis Labs has established a specialized division, Gnosis AI, for researching and developing projects in areas like agent-to-agent payments and smart prediction markets. Gnosis AI is a key initiative within the overall Gnosis 3.0 framework, a major evolutionary stage of the project designed to bring the platform to the mainstream web3 world.
What Is the Gnosis Token (GNO)?
GNO is Gnosis’s staking and governance token. Validators stake GNO to secure the right to process transaction blocks on Gnosis Chain, while the wider GNO holder community can take part in on-platform governance votes. As noted earlier, these votes represent the final step in a multi-stage governance process whereby proposed changes or improvements to the platform are first considered in the Gnosis forum, and may proceed to a final vote involving GNO token holders.
Originally, the GNO token was issued on Ethereum, with a total and maximum supply of 10 million. As such, GNO was designed as a deflationary token.
In April 2022, the Gnosis governance community voted to reduce the token's total supply to 3 million GNO. This supply-capping feature remained in place after the supply reduction, and the maximum supply was also set at 3 million GNO.
Where to Buy Gnosis Crypto (GNO)
GNO is available for trading on Bybit as a USDT Perpetual contract (GNOUSDT).
Gnosis Crypto Price Prediction
As of Jan 9, 2025, the GNO token was trading at $253.10, or 60.7% lower than its ATH of $644.20 on Nov 8, 2021, and 3,580.5% higher than its ATL of $6.88 on Mar 13, 2020.
Long-term price forecasts for GNO are generally bullish.DigitalCoinPrice predicts average prices of $835.83 in 2027 and $1,275.52 in 2030, while CoinCodex expects the token to average $319.29 in 2027 and $1,199.07 in 2030.
Closing Thoughts
Gnosis' vibrant community, founded in the early years of the DApp revolution, continues to grow, with its 200,000-strong validator army offering unmatched decentralization benefits to users and developers. Much of the Gnosis protocol's success over the years can be attributed to its eloquently designed dual-token model, with xDAI as a gas token and GNO as a staking token and the primary asset for community governance.
With a vast network of validators, stability delivered by its stablecoin-for-gas model and time-tested success on the market, the Gnosis project is unlikely to fade into obscurity any time soon — to say the least!
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