Key Notes
- Zilliqa plans to replace its independent L1 with an Ethereum L2 for verified institutional participants.
- LTIN would operate the sequencer, with wallets admitted through vLEI identity checks and settlement on Ethereum.
- ZIL remains the only token, and holders need take no action while migration details are pending.
Zilliqa plans to stop operating as an independent layer-one blockchain and become an Ethereum layer-two network for regulated institutions, shifting its focus from building a standalone ecosystem to serving verified financial counterparties.
The project outlined the change in a strategy statement. Its November 4 changelog records the launch of the redesigned website and the Zilliqa Institutional Layer name. The announcement sets a direction; it does not give an activation date or a completed migration.
Why Zilliqa Is Giving Up the Standalone Model
Zilliqa says funding and liquidity for standalone L1 networks have dried up, while its own usage and ecosystem growth did not reach the scale needed to sustain an independent chain. Recent hacks also exposed the cost of securing and operating a network alone, according to the team.
The proposed response is to use Ethereum for settlement while concentrating Zilliqa’s work on identity and institutional access. The team argues that a smaller network can no longer justify carrying every part of the infrastructure itself.
A similar economic argument appeared in Gnosis’s transition plan, which targets a move into the Ethereum Economic Zone in spring 2027. The projects propose different architectures, but both are reconsidering the expense of running an independent L1.
A Market Restricted to Verified Participants
Under Zilliqa’s proposed design, only wallets whitelisted through a verifiable Legal Entity Identifier, or vLEI, would be allowed to transact. Institutions would trade through permissioned markets, with transaction batches posted to Ethereum.
The identity system is intended to establish which legal entity is participating and who is authorized to act for it. GLEIF, which oversees the framework, describes vLEIs as cryptographic credentials connecting an organization’s identity with an individual’s role and authority.
Zilliqa initially targets banks, funds, asset managers and issuers. Its website envisages access for individuals and agents later, rather than opening the institutional market to every wallet from the outset.
The Liechtenstein Trust Integrity Network, or LTIN, would operate the sequencer that orders and batches transactions. Zilliqa describes LTIN as majority-owned by state-owned Telecom Liechtenstein, with Zilliqa among its shareholders.
LTIN is still seeking GLEIF qualification to issue vLEIs, according to the same page. The planned model combines Ethereum settlement with LTIN-operated sequencing and identity-based access, rather than removing the need for an identifiable network operator.
ZIL Remains, With Migration Details Still Pending
Zilliqa’s token guidance says ZIL will remain the network’s only token and that holders need take no action today. The team promises technical details covering holders, exchanges and stakers before changes take effect.
It has not yet set out the full migration process or how existing staking arrangements will operate under the new architecture. Keeping ZIL does not, by itself, establish that every current mechanism will remain unchanged.
That distinction matters alongside other infrastructure changes, including Nillion’s migration from its L2 to Ethereum mainnet. Zilliqa’s announcement calls for no immediate holder action; instructions or deadlines from another project do not apply to ZIL.
The next practical milestone is publication of the transition specifications. Until those arrive, the confirmed development is a strategic commitment to an institutional Ethereum L2, rather than a finished replacement for the existing network.
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