The upward difficulty brought by the hard fork upgrade is hard to sustain: How Gnosis Chain can maintain stable growth amidst ongoing risks

On February 1st, the privacy and scalability-focused public chain project Gnosis Chain implemented an important hard fork upgrade, specifically at Slot: 8265728, Epoch: 516608, which is undoubtedly a positive development for project investors. Prior to this, the project's data performance had already begun to warm up.

Since MakerDAO expanded its Spark Protocol to Gnosis Chain, the total locked value (TVL) of this public chain has doubled after October, reaching $150 million. With the surge in TVL, Gnosis Chain's native token GNO has also shown strong growth momentum.

Data shows that GNO's market value has risen from $97.70 on October 22 to $216.29 recently, peaking at $242.94 during this period. Behind the soaring data performance, we will interpret the growth logic for readers.

A large amount of core infrastructure has been built, and the Ethereum L2 and sidechain project Gnosis Chain has gained corresponding recognition

Gnosis Chain, the pioneer of Ethereum sidechains, has always adhered to its original intention of promoting decentralization and scalability. With the participation of over 140,000 validators globally, it can maintain a fair and neutral network operation at a cost far lower than that of the mainnet.

What makes Gnosis Chain stand out? The answer lies in its construction of numerous core infrastructures based on Ethereum, which have gained widespread recognition and use within the crypto community. For example, Cowswap, a permissionless decentralized exchange, achieves gas-free order placement on Gnosis Chain through its innovative batch auction mechanism, and effectively avoids the MEV problem by aggregating liquidation prices, enhancing the security of user transactions.

As an L2 solution, Gnosis Chain provides an environment for executing transactions on xDai, ensuring the security of terminal settlements while significantly reducing users' gas fees. The launch of Gnosis Safe further strengthens this advantage, serving as a smart contract multi-signature solution that provides non-custodial security for fund management, and its integration with decentralized finance solutions promotes the evolution of multi-signature wallet functions.

Gnosis Protocol has opened up the possibility of circular trading, simplifying the asset exchange process and reducing user operational complexity and transaction costs. The introduction of conditional tokens has brought a higher-dimensional trading form to decentralized prediction markets, allowing for effective pricing and exchange of market complexity and second-order effects on Gnosis Chain.

Observing the composition of the Gnosis Chain ecosystem, we can see that DeFi occupies an absolute dominant position, reflecting the platform's importance in the decentralized finance field. Wallet services also hold a significant proportion, indicating a high demand from users for secure asset management tools. The notable share of NFTs and DAO organizations showcases Gnosis Chain's efforts in promoting innovation in art and community governance.

The project itself and the data performance of on-chain DApps have surged, attracting widespread attention to Gnosis Chain recently

Gnosis Chain not only leads in technological innovation but also demonstrates its unique value in market performance. Gnosis (GNO) has seen a 2.90% increase in one week, and although there has been a slight 1.90% decline globally, it stands out with a 7.20% growth rate among similar layer one (L1) cryptocurrencies, outperforming many of its peers.

In terms of trading activity, Gnosis (GNO) achieved a 24-hour trading volume of $2,403,855, an increase of 48.50% compared to the previous day. This significant surge showcases the market's attention and active participation in Gnosis.

As the 11th ranked blockchain by total locked value (TVL) recently, Gnosis Chain has a circulating market value of $253,905,026, with a 24-hour trading volume increase of 30.9% to $814,151. This growth rate not only reflects its liquidity but also indicates the market's trust and reliance on various applications and services within the Gnosis Chain ecosystem.

Within the Gnosis ecosystem, stablecoins USDT and USDC have maintained price stability, demonstrating a solid position in the cryptocurrency market, while Chainlink (LINK) has seen a 22.1% increase in one week, showcasing its strong market momentum.

Within the ecosystem, Etho Protocol, BoringDAO, and Swash have all achieved varying degrees of price increases, at 37.1%, 7.1%, and 5.7%, respectively. The price increases of these tokens not only represent their market acceptance but also reflect the diversity and innovation capabilities of the Gnosis ecosystem. In particular, the 37.1% surge of Etho Protocol highlights its potential value and growth momentum within the ecosystem.

In summary, Gnosis Chain has built a stable yet vibrant blockchain environment with its strong ecosystem structure, robust market performance, and superior competitive position in the cryptocurrency market. As the market continues to recognize various tokens and services within its ecosystem, Gnosis Chain is becoming a focal point for investors and users.

Both positive and negative factors exist, and it remains uncertain whether Gnosis Chain can maintain an upward trend throughout the year

With Maker's latest governance voting decision announced on the X platform, Gnosis Chain faces new transformations and opportunities. Adjustments to the SparkLend Ethereum and Gnosis Chain ETH interest rate model parameters, as well as doubling the supply cap for SparkLend Gnosis Chain wstETH, indicate adaptive adjustments in financial models and market supply, which will undoubtedly impact Gnosis Chain's liquidity and usage.

With the addition of Aave V3, the Gnosis Chain ecosystem has been further expanded, increasing its attractiveness as an L2 solution. Gnosis-supported sDAI has achieved significant market share growth based on its TVL growth performance since the beginning of the year. Asset tokenization not only provides new growth areas for Gnosis Chain but also allows sDAI holders to conduct cross-chain operations more conveniently through the Gnosis Chain bridge, reinforcing its position in decentralized finance (DeFi).

However, the upcoming Dencun hard fork of Gnosis Chain's Chiado testnet, along with the implementation of related EIPs, while bringing expansion and cost advantages to the L2 chain, also presents technical challenges. Validators need to prepare for the upgrade, including software updates and additional storage space, all of which require time, resources, and technical support.

Token unlocking events will also affect Gnosis Chain's market performance. The unlocking of DYDX, ACA, EUL, and TORN will introduce new liquidity, potentially impacting price fluctuations in the short term. How the market absorbs these newly unlocked tokens will be a test of Gnosis Chain's stability.

In conclusion, Gnosis Chain stands at a critical juncture of potential and challenges. Ongoing technological upgrades, ecosystem expansion, and market dynamics all point to its significant role in the cryptocurrency space. However, balancing technological innovation with market demand and maintaining the stability and security of the ecosystem will be key to Gnosis Chain's future development. For investors and users, this is not only a moment for monitoring and evaluation but also a test of long-term commitment and confidence in Gnosis Chain.