Zilliqa said on November 5 that after nine years its standalone Layer 1 "hasn't worked" and it will become the Zilliqa Institutional Layer, an Ethereum Layer 2 for regulated institutions (post).

The reasons it gave were usage never reaching what a standalone chain needs, funding and liquidity for standalone L1s drying up, and recent hacks showing the cost of securing a chain alone, all visible onchain. The new design promises settlement secured by Ethereum, network-level identity and compliance through vLEIs, and a permissioned market starting with verified institutions, later individuals and agents.

The sequencer will be operated by ltin_li, the state-backed trust network in Liechtenstein, which is also becoming a qualified vLEI issuer. ZIL remains the single token and holders need no action today, with any claim, swap or migration to be announced first on zilliqa.com. No timeline, L2 stack, or token economics in the new role were named, so this is a statement of intent; ZIL traded around $0.00178 on Binance spot on November 5.