Zilliqa abandons its L1 to become an institutional Ethereum L2

After nine years of running her own channel, Zilliqa called it quits. Thursday, November 5, the ICO era network admitted its standalone L1 “didn’t work” and said it was relaunching as the Zilliqa Institutional Layer, an Ethereum L2 built for regulated institutions.

— (@)

Do you like this article?

Subscribe to Bankless Or log in

• Verified wallets only: By Zilliqa redesigned sitethe new L2 will sit on the Ethereum mainnet, but the only wallets allowed to transact are those linked to a verified vLEI. It is a cryptographic upgrade to the Legal Entity Identifier (a global identification standard managed by GLEIF), allowing the software to confirm which company is on the other side of a transaction and who is authorized to sign. Institutions enter first, with other users promised access later.

• Liechtenstein leads the way: LTIN, the Liechtenstein Trust Integrity Network, will operate the sequencer and distribute the vLEIs as part of its efforts towards accreditation as an official issuer. Zilliqa said state-owned Telecom Liechtenstein owns majority of LTIN and Crypto Briefing reports Zilliqa purchased a stake in LTIN in July.

• ZIL survives, details pending: ZIL remains the only token on the network and holders do not need to do anything at this time. The team said it assesses a minimum Canton-type ZIL balance so that institutions can adhere to it, even if “nothing has been decided yet”. The rollup stack, proof system, migration plan, and launch date are all still to be determined, with a public FAQ in progress.

• A brutal October: CEO Alexandre Zahnd resigned just nine days earlier, amid a series of exploits targeting its (still paused) X-Bridge and multiple PlunderSwap pools. In a answer Today, Zilliqa said that going it alone on security “costs more than a small network can support.” ZIL is down around 11.5% in the last 24 hours, with the market cap now near $33 million.