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Gnosis Joins Forces to Build the Ethereum Economic Zone and End L2 Fragmentation

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Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR:

    • Gnosis is a founding contributor to the Ethereum Economic Zone alongside Jordi Baylina and the Ethereum Foundation.
    • EEZ rollups allow smart contracts to call Ethereum mainnet contracts atomically within a single transaction.
    • Protocols on EEZ rollups access Ethereum’s native liquidity directly without wrapping, bridging, or extra delays.
    • Gnosis plans to define the role of GNO token and its validator set in any future EEZ implementation with its DAO.

Ethereum Economic Zone is the framework Gnosis is co-building to address Layer 2 fragmentation on Ethereum. Gnosis, active as a Layer 1 blockchain for seven years, is a founding contributor to this initiative.

Jordi Baylina, founder of ZisK and creator of Circom, also joins as a founding contributor. The Ethereum Foundation is also co-funding the entire development effort.

The framework centers on synchronous composability, enabling rollups to interact with Ethereum mainnet without bridges.

A Framework Built Around Composability

Ethereum scaling delivered on its core promise in recent years. Transactions became cheaper and network throughput increased steadily. However, the process fractured the ecosystem into disconnected chains rather than one unified economy.

Each rollup operates with its own liquidity, bridges, and tooling. Builders must redeploy the same products across multiple chains to reach all users. Users also face expensive bridging costs and assets scattered across chains they barely track.

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Gnosis noted on X that Ethereum had scaled into fragmented islands rather than a unified economy. The Ethereum Economic Zone is designed to resolve that at the infrastructure layer. The framework allows rollup smart contracts to call Ethereum mainnet contracts within one transaction.

Calls between different rollups within the same execution are also supported. This is what developers call synchronous composability. It removes the need for bridges, wrapping, or waiting on finality.

Protocols on EEZ rollups access Ethereum’s existing liquidity directly without bridging or wrapping. A protocol can use a Uniswap mainnet pool atomically, with the same L1 guarantees. These rollups also inherit Ethereum’s full validator security with no new trust assumptions added.

What the Ethereum Economic Zone Means for Gnosis Chain

Gnosis acknowledged that its neutral blockspace thesis did not develop as expected. Blockspace became largely commoditized across the industry over time. Running a standalone Layer 1 requires constant rebuilding of DeFi infrastructure and liquidity bootstrapping.

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Synchronous interoperability changes the competitive dynamic for chains like Gnosis. Projects inside a composable Ethereum domain no longer need to replicate an entire ecosystem. They can rely on shared liquidity and canonical infrastructure instead.

That shift frees up capital and engineering bandwidth for differentiation. Gnosis plans to invest more in user experiences and products like Gnosis Pay and the Gnosis App. Real-world financial integrations also become more practical under a unified model.

The Ethereum Economic Zone also connects to Gnosis’s mission of giving every person financial access. A stablecoin can now compose with a lending protocol on another chain without a bridge. A consumer app can also access the best rates across the ecosystem without workarounds.

Gnosis noted that the GNO token and validator set may have a role in a future EEZ implementation. Those details will be worked out with the Gnosis DAO community over the coming months. Technical architecture, developer tooling, and integration guides are also planned for release soon.

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Crypto World

Here’s Why Bitcoin Analysts Say BTC Price Will Bottom at $40K

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Here’s Why Bitcoin Analysts Say BTC Price Will Bottom at $40K

Bitcoin (BTC) buyers made a tepid comeback on Monday, pushing BTC price to its intraday high of $67,860. Analysts said that Bitcoin remains in a bear market, with several metrics pointing to a potential bottom below $50,000.

Key takeaways:

  • Bitcoin price turns $70,000 into resistance, clearing the path for a deeper correction.

  • Bitcoin’s short-term holder realized price bands moved lower, with a potential bottom around $46,000.

  • Historical retracement levels and a bear flag breakdown point to $39,000–$41,000 as the final low for BTC price this cycle.

Bitcoin’s “path of least resistance” is downward

Data from TradingView captured ongoing BTC price gains, up 1.5% on the day to trade at $67,750, as $69,000-$70,000 became new resistance.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Analyzing Bitcoin’s price action on lower time frames, Telegram trading resource Technical Crypto Analyst said losing the $68,000-$69,000 support “confirms short-term bearish momentum,” adding:

“Unless price quickly reclaims $69K–$70K, the path of least resistance remains downward toward the $65K demand zone.”

Related: Worst six months since 2018? Five things to know in Bitcoin this week

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“Great bounce upwards, but nothing confirmed as of yet on Bitcoin,” MN Capital founder Michael van de Poppe said in a Monday post on X.

It “all depends on macroeconomic events; however, I’d rather see a breakout above $71K for confirmation,” he added.

“On the other hand, a classic little sweep to $65K just before the push upwards would signal that we’re going to get that momentum.”

BTC/USD four-hour chart. Source: X/Michael van de Poppe

Analyst Kyle Chassé said that with the Fear and Greed index still in the “extreme fear zone” and the order books showing more shorts than longs, the market leans “towards more downside.”

Crypto fear and greed indeed. Source: X/Kyle Chassé

Where will the Bitcoin price bottom?

Bitcoin’s 46% drawdown from its $126,000 all-time high has seen the cost basis of short-term holders (STH) — the average price of entities who have held BTC for less than 155 days — drop from $113,500 to $83,200.

“​​This is a sign that the pricing for a potential bottom has also moved lower,” said CEO and founder at Alphractal Joao Wedson in an X post on Monday.

Similarly, the lower line of the STH realized pricing bands (blue line) has also moved “even lower, which could confirm that Bitcoin may form a bottom around $50K or slightly below,” Wedson added.

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The chart below shows that Bitcoin bottomed out just below the lower band of the STH realized price during the 2022 bear market. 

Bitcoin STH realized price bands. Source: Alphractal

Analyst Willy Woo said that the bear market bottom for Bitcoin could be between its realized price, currently at $54,000, and the Cumulative Value-Days Destroyed (CVDD), now at $45,500.

“Old school onchain models suggest a BTC bottom between $46K-54K. ”

Bitcoin pricing models. Source: X/Willy Woo

The CVDD measures the cumulative value of “Coin Days Destroyed” (long-term holders selling) relative to the market’s age, creating a rising “floor” price during bear markets. 

Crypto analyst Crypto Jelle said Bitcoin’s bear market lows have historically formed between the 0.618 and the 0.786 retracement levels, which are at $57,600 and $39,000, respectively.

BTC/USD weekly chart. Source: X/Jelle

As Cointelegraph reported, the current “last stages” of the bear market are producing predictions of as low as $41,000, based on a bear flag breakdown.