Reintegrate with the Ethereum economic zone

Article by: gwilym

Compiled by: Block unicorn

This year, at the EthCC conference held in Cannes, the first major announcement was released: the Ethereum Economic Zone (Economic Zone).

The initiative is led by the Gnosis and ziskvm teams and funded by the Ethereum Foundation. The goal is to eliminate fragmentation within the Ethereum ecosystem. Let’s take a look at the proposal currently being put forward.

Background

Layer 2 is intended to expand Ethereum’s block space, and it has already achieved that. However, along with this expansion comes liquidity fragmentation. Your tokens on Arbitrum, Base, Polygon, and other platforms can’t directly interact with contracts on L1 or other L2s unless you bridge—an approach that takes time and money.

Of course, this isn’t anything new.

For example, at the 2024 Devcon SEA conference, Gnosis co-founder Martin Köppelmann delivered a talk titled “Ethereum needs native L2.” The talk focused on the various trust assumptions that hinder L2 interoperability. To address this, he called for the development of zero-knowledge-proof-based Rollups that can synchronously read and write with Ethereum.

At the time, RYAN praised this concept as a vision for Ethereum 3.0. Today, the Ethereum Economic Zone (EEZ) project is actively inheriting that vision and preparing to make it real.

While Köppelmann was calling for native Ethereum Rollups at the time, the new EEZ concept originates from his 2024 discussion and aims to achieve broader, permissionless interoperability. EEZ Rollups can be native and Ethereum-based, or external and not Ethereum-based—depending on the architectural choices.

Who is building EEZ?

Gnosis is a low-key development powerhouse that has created many iconic on-chain infrastructure components, such as the CoW protocol, Safe multisignature wallets, the Zodiac DAO architecture, conditional token formats that power Polymarket predictions, Gnosis Chain, Gnosis Pay, and more.

On the ZK front, ZisK—innovatively led by Jordi Baylina—has developed an efficient open-source zkVM design that can deliver real-time proofs for the execution of smart contracts in the Ethereum ecosystem.

But importantly, regardless of Gnosis, ZisK, or any other entity, no one “owns” the EEZ stack. The Ethereum Foundation is funding the program, “as a trusted neutral shared Ethereum infrastructure,” and its results will be released as free open source for everyone to use.

How EEZ works

In short, the Ethereum Economic Zone is an L1–L2 framework centered on synchronous composability (i.e., real-time interoperability).

In other words, a Rollup connected to EEZ can call contracts on L1 or other L2s and receive responses within a single transaction. This enables cross-chain atomic execution, making users feel as if they’re using a single chain.

In this sense, contracts on the EEZ chain will run as if they exist on the same chain. Transactions will complete atomically across the relevant networks, or not execute at all if an error occurs.

Based on Baylina’s prior research, we can infer that the anchor here will be the proxy smart contract—i.e., a contract on one chain that represents contract execution operations on another chain. If you’re using Ethereum, you only need to call one proxy; the proxy will handle the transaction and apply the state changes to the specified L2 layer, and everything is done.

And perhaps most notably, this shift from a “single-chain user experience with multi-chain outcomes” can be achieved without any protocol-layer changes on Ethereum, because EEZ will rely on smart contracts and real-time zero-knowledge proofs.

That said, the main trade-off of adding L2s to the EEZ system is that when Ethereum undergoes reorgs, they must reorg as well, as Martin Köppelmann has pointed out. This will be a technical challenge, but not a big one. Rollups that run their own sequencers will need to adapt to this kind of merging, and of course that’s feasible.

Importance

Imagine that an Aave position on Ethereum can interact in a single transaction with the Uniswap liquidity pool on Unichain (or the Morpho vault on Base, or the Fluid vault on Arbitrum, etc.), without bridging.

This is the future that the EEZ project is aiming to lead. While there are still some advances needed in hardware and verification before this vision is fully realized, we’re at a critical moment for breakthroughs.

The ultimate payoff should be Ethereum’s further integration and dominance. As RSA put it:

“ if Ethereum can succeed—if it can integrate all of its blockchains into a unified Economic Zone—while also launching a quantum upgrade to a streamlined version of Ethereum and L1-level scaling in parallel…

Ethereum will gain unstoppable network effects.

It will ultimately deliver on its core promise.

Ethereum = the World Ledger.

ETH = the World Reserve Asset. ”

That’s the grand idea. Therefore, as we wait for EEZ to officially go live, be sure to keep an eye on the project’s latest updates and watch the newly added partners, because this alliance has just gotten started.