The Lisk project, once considered one of the most promising in the industry, has officially announced the complete shutdown of its own blockchain network. This decision marks the end of a decade-long history that included both dizzying highs and painful lows. In 2016, Lisk raised over 14,000 BTC (about $5.7 million at the time) in the second-largest crowdfunding campaign in cryptocurrency history, second only to Ethereum. The market capitalization of the LSK token then reached nearly $4 billion, and the project itself was positioned as the future of decentralized applications.
Why Lisk is leaving its network
Lisk's journey was full of twists and turns. As early as December 2023, the team abandoned its own L1 network, migrating to Ethereum as a layer-2 (L2) solution. However, this iteration lasted less than two years. Now, in October, a complete shutdown of the updated network version is planned. The team proposes that the governing body, Lisk DAO, burn 100 million LSK tokens from the treasury, reducing the total supply from 400 million to 300 million (by 25%), and fully dissolve the DAO. This is an unprecedented step, demonstrating a radical shift in development direction.
Burning 100 million LSK and dissolving the DAO
The proposal also suggests making staking fully flexible: holders will be able to withdraw funds at any time after a three-day waiting period. The reasons for this decision are obvious. The LSK price reached an all-time high of $34.92 in January 2018. Currently, the token is trading around $0.09 — more than 99% below its peak values. A low of $0.07 was recorded on August 3, just three weeks before this announcement. Add to that the fact that Binance placed LSK on its monitoring list in July with possible delisting, and the picture becomes perfectly clear.
What the Lisk Blockchain shutdown means for holders and developers
For LSK holders on Ethereum and exchanges, nothing changes — the contract and ticker remain. However, those holding tokens on Lisk Chain or in staking must transfer them to Ethereum via the bridge before October 31. The transfer process takes at least seven days, and exiting staking adds another three days after the vote is approved.
Coinbase's Base network will become the primary platform for LSK alongside Ethereum. The token itself will receive the status of an incentive asset. Businesses on the platform will be able to receive rewards, which can later be converted into LSK and used to pay fees. Developers will be offered migration to Celo together with the Celo Core Co team. Celo has already gone through this path, transitioning from an independent L1 to a layer-2 solution on Ethereum in March 2025.
Lisk Chain will be supported until the final shutdown date. The next stage is the DAO vote. If it passes, LSK will cease to track the blockchain and will become a token tied to a software business.
My analysis: This story is a vivid example of how even the most successful projects can lose relevance. Lisk failed to compete with giants like Ethereum and Solana, and its transition to L2 was a belated attempt to save itself. The token burn and DAO dissolution are not just a technical decision but an acknowledgment that the original concept has failed. Investors should learn a lesson: hype and market capitalization do not guarantee long-term viability, and fundamental technological value is the only reliable asset.