What does it mean when an established public blockchain decides to stop competing on its own and instead build on Ethereum?
On November 5, several crypto media outlets reported on Zilliqa’s transition plan. The official page indicates that the project plans to build the Zilliqa Institutional Layer for institutions, use Ethereum as its settlement layer, and retain the ZIL token.
The interpretation that might get people excited is: institutions are coming in, Ethereum is expanding, and an old token is gaining a new use. But for token holders, the real question should be more straightforward: after the move to L2, will there be customers willing to pay over the long term?
Independent public blockchains need to attract developers, users, and liquidity while also maintaining the security of their own networks. Moving fast on technology solves only part of the problem. Without enough applications and capital, low fees may not be enough to generate steady revenue for the network.
Turning to Ethereum can be understood as a reallocation of resources: handing some underlying capabilities over to a larger ecosystem while focusing on solving problems for specific customers. But this is only a business-direction choice; it does not mean the customers are already there.
Zilliqa’s point of differentiation this time is identity verification.
According to the design announced by the team, wallets participating in transactions will need to undergo verification tied to institutional identities, with an initial focus on serving institutions. The aim is to address who the counterparties are, who is authorized, and how responsibility for actions is assigned.
For institutions that need to know the identities of their trading counterparties, this design may lower some barriers to access. However, the entry requirements could also limit early participation. Whether institutions are willing to join, what they can trade, and whether there are enough counterparties matter more than simply announcing that the platform is “for institutions.”
For ZIL holders, “retaining the token” is not yet a complete investment thesis.
Further details need to be confirmed: which parts of the new network will require ZIL, whether demand will come from actual business activity or incentive programs, and how network revenue will be linked to the token. If institutional business growth has little connection to holding ZIL, institutional adoption cannot be directly equated with demand to buy the token.
It is also important to distinguish between the current network and the future one. The usage mechanisms for existing ZIL cannot be applied indiscriminately to an L2 proposal whose full details have yet to be disclosed. According to official information available as of November 6, holders do not need to take any action at this stage because of this plan; further technical and migration information will be announced separately.
Will ETH benefit from this? In principle, a new L2 could increase demand for Ethereum settlement and data services. But the actual contribution will depend on transaction volume after the network launches, the technical design, and the fees actually paid. More projects integrating with Ethereum does not, by itself, tell us how much value ETH will gain; that link still needs to be established with data.
For those tracking multiple asset classes, this is also a typical case of distinguishing industry buzz from investment returns. BiyaPay connects digital assets with services related to U.S. and Hong Kong stocks, and provides conversion between USDT and currencies such as the U.S. dollar and Hong Kong dollar. When arranging account funds, you should still confirm each trading product, withdrawal network, and fee individually; a project announcing a strategic shift does not mean every platform has already completed support.
Likewise, using Ethereum for settlement does not mean all risks disappear. Sequencer arrangements, upgrade permissions, bridging mechanisms, and migration execution all require separate scrutiny; the security of the underlying network cannot automatically cover every aspect of the application and its operations.
Going forward, I’ll be watching three things: the finalized technical and migration plans, the customers and businesses that actually come online, and usage demand that can be sustained even after incentives are excluded.
The transition is worth studying, but announcing a direction is only the beginning. Whether ZIL gains more substantive demand and whether ETH sees additional usage will ultimately depend on real business activity after launch—not on simply adding together the keywords “institutions” and “L2.”
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