# Zilliqa Ditches Its L1 to Become an Institutional Ethereum L2

*Author: William M. Peaster*
*Published: Nov 5, 2026*
*Source: https://www.bankless.com/read/news/zilliqa-ditches-its-l1-to-become-an-institutional-ethereum-l2*

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After nine years of running its own chain, Zilliqa is calling it. On Thursday (Nov. 5th), the ICO-era network [admitted](https://x.com/zilliqa/status/2118288870060032070) its standalone L1 “hasn’t worked” and said it’s relaunching as the Zilliqa Institutional Layer, an Ethereum L2 built for regulated institutions. 

> [ — (@)
> ](https://twitter.com/zilliqa/status/2118288870060032070)

# **What’s the Scoop?**

- **Verified wallets only:** Per Zilliqa’s [revamped site](https://www.zilliqa.com/), the new L2 will settle to Ethereum mainnet, but the only wallets allowed to transact are those linked to a verified vLEI. That’s a cryptographic upgrade to the Legal Entity Identifier (a global ID standard run by GLEIF), letting software confirm which company is on the other side of a trade and who’s allowed to sign for it. Institutions get in first, with other users promised access later. 

- **Liechtenstein runs the show:** LTIN, the Liechtenstein Trust Integrity Network, will operate the sequencer and hand out the vLEIs as it works toward accreditation as an official issuer. Zilliqa [says](https://x.com/zilliqa/status/2118355529911120367) state-owned Telecom Liechtenstein holds a majority of LTIN, and Crypto Briefing [reports](https://cryptobriefing.com/zilliqa-pivots-ethereum-layer-2-institutions/) Zilliqa bought a stake in LTIN back in July. 

- **ZIL survives, details pending:** ZIL stays the network’s only token, and holders don’t need to do anything for now. The team [says](https://x.com/zilliqa/status/2118358575202599069) it’s weighing a Canton-style minimum ZIL balance for institutions to join, though “nothing is decided yet.” The rollup stack, proof system, migration plan, and launch date are all still TBD, with a public FAQ on the way. 

- **A brutal October:** CEO Alexander Zahnd [resigned](https://unchainedcrypto.com/alexander-zahnd-gives-up-zilliqa-ceo-role-with-no-successor-named-as-x-bridge-stays-suspended/) only nine days earlier, amid a string of exploits targeting its X-Bridge (still paused) and several PlunderSwap pools. In a [reply](https://x.com/zilliqa/status/2118359376234680499) today, Zilliqa said going it alone on security “costs more than a small network can carry.” ZIL is down ~11.5% over the past 24 hours, with its market cap now near $33M.
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