The story of Lisk, one of the brightest projects of the ICO boom era, is coming to an end. In 2016, this blockchain project raised over 14,000 BTC (about $5.7 million at the time), becoming the second-largest crowdfunding in cryptocurrency history after Ethereum. The market capitalization of the LSK token then reached nearly $4 billion. Today, the team announces a complete abandonment of its own blockchain and a transformation into a platform for business finance. What went wrong?
Why Lisk is leaving its network
This is not the first pivot for the project. Back in December 2023, the team abandoned its own layer-1 (L1) network and rebuilt Lisk as a layer-2 (L2) solution on top of Ethereum. It is this updated version, which existed for less than two years, that is planned to be shut down in October. It seems that the strategy of migrating to Ethereum did not bring the expected revival to the ecosystem.
The proposal, put forward for discussion by the Lisk DAO governing body, involves burning 100 million LSK tokens from the organization's treasury. This would reduce the total supply from 400 million to 300 million tokens, a 25% decrease. Additionally, staking will become fully flexible: holders will be able to withdraw funds at any time after a three-day waiting period.
Burning 100 million LSK and liquidating the DAO
The token's price chart eloquently explains the rush. In January 2018, LSK traded at an all-time high of $34.92. Now the price is around $0.09 — more than 99% below its peak values. An absolute low of $0.07 was recorded on August 3, just three weeks before this announcement. In July, Binance also added LSK to its monitoring list, which is usually a precursor to delisting.
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 with tokens on Lisk Chain or 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 adds another three days after the vote is approved.
The Base network, a layer-2 solution from Coinbase, will become the primary platform for LSK alongside Ethereum itself. The token itself will receive the status of an incentive asset: businesses on the platform will be able to earn rewards in LSK and use it to pay fees. Developers will be offered a migration path to Celo in collaboration with the Celo Core Co team.
"DApps, developers, and teams that worked with Lisk Chain have created real products for real users. None of this will be lost in the shift of direction," the announcement states.
Celo has already walked this path — in March 2025, it independently transitioned from an independent layer-1 network to a layer-2 solution on Ethereum. Lisk Chain will be supported until the final shutdown date. The DAO vote will be the next step: if the proposal is accepted, LSK will cease to track the blockchain and will become a token tied to the software business.
My take: This is a natural ending for many projects from the 2016-2017 era. The market has moved to a multichain paradigm and L2 solutions, and Lisk's attempt to stay afloat by migrating to Ethereum proved to be too late. Burning tokens is more of a gesture of admitting defeat than a growth strategy. Investors should learn a lesson: even the largest crowdfundings do not guarantee long-term viability without constant innovation and real user demand.