xDAI Bridge Upgrade to USDS: A Game-Changer for Gnosis Chain

The xDAI bridge, a critical link between Ethereum and Gnosis Chain, will replace DAI with USDS as the default token on Ethereum, while xDAI remains the native gas token on Gnosis Chain. This upgrade, announced by Gnosis Chain (@gnosischain), requires third-party apps to integrate with the new Bridge Router contract by the deadline. The shift to USDS—a stablecoin likely designed for better reserve backing—aims to improve interoperability and reduce bridging risks, addressing DAI’s recent outflows due to MakerDAO’s DSR rate hikes (docs.gnosischain.com).

Recent News

Gnosis has been on a roll! Just two weeks ago, they acquired HQ.xyz for $15M, their biggest acquisition yet, to expand into Asia and integrate self-custodial business accounts into their ecosystem (Tech.eu, 2025-05-14). This aligns with their Gnosis 3.0 strategy, shifting focus to application-layer tools for a decentralized financial system.

Future Plans

Looking ahead, Gnosis aims to integrate HQ (now Gnosis HQ) with Gnosis Chain, Gnosis Pay, and projects like Safe and CoW Swap, per their roadmap (developers.gnosischain.com). This upgrade sets the stage for further innovations, like bridging DSR yields to regain deposits lost to DAI outflows.

Onchain Data

Since the DSR rate rose to 3.5%, ~7M DAI exited the xDAI bridge (docs.gnosischain.com). Stablecoin transaction volumes remain robust, averaging billions daily, even on weekends (visaonchainanalytics.com). Post-upgrade, expect increased USDS activity on Ethereum-Gnosis bridges.

Community Sentiment

X reactions are cautiously optimistic. @SkyEcosystem’s announcement sparked discussions, with users like @NBreitenbe68872 noting its “institutional-grade” potential. However, some devs worry about integration challenges.

Risk Disclaimer

While the upgrade is promising, third-party apps missing the integration deadline may face disruptions. Double-check compatibility!