Gnosis Chain community members evaluate gas token choices amid MakerDAO’s pivot to Sky

Quick Take

  • Gnosis Chain members are reassessing their choice of gas tokens following MakerDAO’s rebranding to Sky and the introduction of USDS.
  • Members are exploring alternative solutions, including adopting decentralized stablecoins like RAI, LUSD, or the Gnosis token.
  • The discussions regarding these changes are still preliminary, and no formal proposal has been put forward yet.

Gnosis Chain community members are reconsidering its choice of gas tokens following MakerDAO's rebranding to Sky and introducing its new stablecoin, Sky Dollar (USDS). Gnosis operates a sidechain that currently uses a bridged version of DAI, called xDAI, to cover gas fees on the network.

MakerDAO is the issuer of DAI, a stablecoin backed by crypto collateral. As part of MakerDAO’s “endgame” plan, it will allow DAI holders to optionally upgrade their tokens to USDS on a 1:1 ratio while also offering the opportunity for native token rewards. 

The new USDS stablecoin potentially introduces more centralized features, including the ability to “freeze” wallet addresses and restrict access for users in the UK and the US. These changes have raised concerns among Gnosis Chain users about USDS’ reliability in covering transaction costs. MakerDAO has previously clarified that the current version of DAI will continue to exist.

Community members highlighted that USDS’ freeze function contradicts Gnosis’ principles of decentralization. “The USDS has a ‘freeze’ function that blocks the use of the stablecoin in certain wallets and/or smart contracts. This change is against the very essence of Gnosis, which is decentralization and permissionless use,” community member 0xLajota wrote.

In response, Gnosis Chain members discussed exploring several alternative solutions. Suggested options include adopting decentralized stablecoins such as RAI and LUSD or a basket of currencies.

Alternatively, members suggested that Gnosis Chain might use its native staking token, Gnosis (GNO), as the gas token, aligning with other blockchain protocols. The discussion is preliminary, and no official proposal has been made thus far.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Vishal Chawla is The Block’s Crypto Ecosystems Editor and has spent over seven years covering tech protocols, cybersecurity, artificial intelligence and cloud computing. Vishal can be reached on Twitter at @vishal4c and via email at [email protected]

Editor

To contact the editor of this story:
Timmy Shen at
[email protected]