Zilliqa, Gnosis, and Ronin are abandoning independent L1 architectures for Ethereum-based L2 models, seeking to leverage shared security and liquidity as the costs of maintaining standalone networks become prohibitive for smaller projects.
Zilliqa, Gnosis and Ronin are all moving to Ethereum-based architectures, with Gnosis targeting spring 2027 for its transition and its Ethereum Economic Zone described as a potential 'black hole for liquidity' tapping Ethereum's TVL. Each migrating chain adds settlement activity and network effects to Ethereum. Counterpoint: the article notes L2s like Optimism, Katana and Linea run at a loss and Blast shut down, and some players (Circle's Arc, Stripe's Tempo, Hyperliquid) still build independent L1s.
Zilliqa announced last week it will abandon its L1 architecture and become an Ethereum-based Layer 2, citing that 'usage never reached what a standalone chain needs' and dried-up funding and liquidity. This may improve the project's viability but reduces the standalone role of the token, and the news was already announced before this article.
Smaller blockchain networks are increasingly migrating to Ethereum as Layer 2 solutions to mitigate the high costs of independent security and liquidity. While Zilliqa, Gnosis, and Ronin have moved or plan to move to the Ethereum ecosystem, analysts note that L2 status does not guarantee profitability, as some networks still face expenses exceeding fee revenue.
Running an independent L1 requires funding execution, consensus, data availability, settlement and staking incentives. From 11th place onward, chains earn less than $1 million in annual fees collectively, while Ethereum offers shared security, settlement and liquidity at lower cost.
More chains settling on Ethereum could strengthen its role as a liquidity hub, though L2 migration does not automatically make those networks profitable.
The project said usage never reached what a standalone chain needs, funding and liquidity for standalone L1s dried up, and recent hacks showed how costly it is to secure a chain alone.