Zilliqa Abandons Layer 1 to Build Institutional Ethereum L2

Zilliqa is abandoning its standalone Layer 1 strategy after nine years, citing insufficient adoption, declining liquidity and rising security costs. Its proposed institutional network introduces pre-settlement identity verification through vLEIs, with a mediation architecture designed to separate compliance from settlement. The transition leaves unresolved questions about ZIL token economics, legacy-chain continuity and the security guarantees of the replacement infrastructure. Zilliqa is abandoning its standalone blockchain strategy to pursue institutional financial infrastructure, acknowledging that nine years of development failed to generate sufficient network activity to sustain its original business model.

Source: ETHNews