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.
Related: Polygon Considers Hard Fork to Recover $6.5M POL Stolen in Crypto Hack
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.
Related: Vitalik Buterin Warns Exchanges to Focus on Security Over Market Share
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.