Zilliqa has told the exchanges that list its ZIL token and the users who stake it to stand by for a structural change. On Thursday, November 5, the team announced that it will retire its independent layer 1 blockchain and rebuild the network as a layer 2 on Ethereum (ETH), with the upgraded infrastructure oriented toward institutional use.

According to the announcement, nothing changes for ZIL holders today, and stakeholders were asked to await further updates as the transition moves forward.

Nine Years as an Independent Layer 1

Founded in 2017, Zilliqa was one of the first public blockchain projects to implement sharding, a design that splits transaction processing across parallel groups of nodes to increase throughput. Its mainnet went live in 2019, and the protocol introduced Scilla, a purpose-built smart contract language designed to support formal verification. The native ZIL token has served as the network's unit for transaction fees and staking participation.

The move marks the end of that standalone architecture, closing out roughly nine years during which Zilliqa operated its own layer 1 chain. The pivot carries its own context: Zilliqa scaled its original chain through sharding, while Ethereum's roadmap came to center on rollups built above its base layer — the architecture Zilliqa now plans to adopt.

What an Ethereum Layer 2 Is

Layer 2 networks run on top of Ethereum, executing transactions off the main chain while depending on Ethereum for security and final settlement. Under Ethereum's rollup-centered scaling roadmap, launching an L2 has become a common route for blockchain teams seeking to inherit Ethereum's liquidity, developer tooling, and institutional recognition without maintaining a separate base layer. Institutions have also increasingly interacted with digital assets through Ethereum-based infrastructure, where tokenization and custody tooling are well established.

That established institutional footprint points to the logic of the rebuild: Zilliqa would position its infrastructure where tokenization and custody workflows already operate, rather than asking institutions to reach a standalone chain.

What Comes Next

No migration timeline was provided in the announcement. Exchanges listing ZIL and users staking the token were told to stand by, while ZIL holders were assured that nothing changes for them today. Further details are expected from Zilliqa as the restructuring advances.

The open items to watch are operational: how the migration will be executed, what staking will look like after the transition, and how exchanges will handle ZIL through the change — all specifics Zilliqa has yet to publish.

This content was first published on COINOTAG: https://en.coinotag.com/zilliqa-ethereum-l2-institutional-layer