The project that was considered the second-largest cryptocurrency crowdfunding in history in 2016 has officially announced its exit from the blockchain infrastructure market. This concerns Lisk, whose LSK token was once valued at nearly $4 billion. Now the team is proposing a radical plan: burn 100 million tokens and completely liquidate the decentralized autonomous organization (DAO).
This decision is not just a rebranding, but an actual acknowledgment that the project's original mission has failed. Lisk, launched as an ambitious platform for building decentralized applications on its own layer-1 (L1) blockchain, failed to carve out a significant niche over ten years. As early as December 2023, the team abandoned its own L1 network and moved to a layer-2 (L2) solution based on Ethereum. Now this updated version, which lasted less than two years, is also being shut down.
Burning 100 million LSK and dissolving the DAO
The proposed governance plan involves destroying 100 million LSK from the DAO treasury, reducing the total token supply from 400 million to 300 million, or by 25%. At the same time, the staking mechanism will become fully flexible: holders will be able to withdraw funds at any time after a three-day waiting period.
The reasons for this move are obvious when looking at the price chart. In January 2018, LSK reached an all-time high of $34.92. Now the token is trading around $0.09 — more than 99% below its peak values. The all-time low was recorded on August 3 at $0.07, just three weeks before this announcement. The situation was further aggravated by the fact that in July, Binance added LSK to its monitoring list, which is usually a precursor to delisting.
What this means for holders and developers
For LSK holders on Ethereum and exchanges, nothing will change — the contract and ticker will remain. However, those holding tokens on Lisk Chain or participating in staking need to transfer them to Ethereum via the bridge by October 31. The transfer process takes at least seven days, and exiting staking will add another three days after the vote is approved.
Coinbase's Base network will become the primary platform for LSK alongside Ethereum itself. The token will receive incentive asset status, and business platforms will be able to earn rewards that can subsequently be converted into LSK to pay fees. For developers, a migration path to Celo is provided — another L2 network on Ethereum that itself underwent a similar transition in March 2025. The team emphasizes that the products created will not disappear but will merely change their development direction.
If the DAO vote is approved, LSK will cease to track a blockchain and will transform into a token associated with a software business. This is the final chord in the story of a project that once raised more than 14,000 BTC (about $5.7 million at the time) — a result that at the time was second only to Ethereum.
My analysis: Lisk's exit is a striking example of how even successful crowdfunding and solid funding do not guarantee long-term success in a rapidly changing industry. The project became a hostage to its own architecture and failed to adapt in time to the dominance of the Ethereum ecosystem. The token burn is an attempt to preserve at least some value for holders, but for the market it is more of a symbolic gesture confirming that in the world of cryptocurrencies, only those who can evolve faster than their competitors survive.