Zilliqa will end its nine-year run as an independent blockchain and move to an Ethereum Layer 2 network for regulated financial institutions. Announced November 5, the shift follows weak adoption, declining funding and rising security costs.
The Zilliqa Institutional Layer (ZIL) will use Ethereum for security and add identity checks. The project will retain its existing token.
Zilliqa Targets Institutional Trading
Zilliqa said its standalone network failed to attract enough users to remain viable. Lower funding and liquidity also made network security harder to maintain.
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The Layer 2 network will use verifiable Legal Entity Identifiers (vLEIs) to verify institutions. Trading will initially be limited to verified institutions.
Liechtenstein’s state-backed trust network, LTIN, will operate the sequencer and become a qualified vLEI issuer.
Security Incidents and ZIL Price
The move follows an October 27 incident involving X-Bridge and ZRC2 proxy pools. In July, Zilliqa disclosed a Ledger application flaw that could expose private keys after as few as five transactions.
CoinMarketCap data showed ZIL at $0.001602, down 14.28% in 24 hours, with $4.08 million in trading volume.
Zilliqa has not announced a migration timeline. Token holders do not need to act yet, the company said, and further details will appear on its website.
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