ZetaChain to wind down L1, migrate ZETA to Solana

Tokenholders approved governance proposal 68 on Sunday with 99.4% support and 58% participation, exceeding the network’s 40% quorum requirement.

Under the approved plan, the native ZETA token will convert one-for-one into a Solana SPL token while keeping the same ticker and total supply.

The vote does not trigger an immediate shutdown. Core contributors will submit a follow-up proposal that defines the withdrawal window for assets on other chains, the snapshot block height, a shutdown schedule, the token claim process and an exchange conversion period. Validators will continue operating the existing chain and staking rewards will remain in effect during the transition.

ZetaChain wrote that operating its own Cosmos SDK layer-1 no longer aligned with its development priorities. The team plans to reallocate engineering and operations to Anuma, a private-focused artificial intelligence application, and to the Private Memory Layer, a system intended to let users carry encrypted context across different AI models.

The project was founded in 2021 to connect assets and data across multiple blockchains. In 2023 it raised $27 million from investors that included Blockchain.com, Jane Street Capital, Human Capital and Sky9 Capital to develop its layer-1 network and cross-chain features.

ZetaChain experienced a security incident in April when an exploit of a cross-chain gateway contract drained about $334,000 from wallets the project controlled on Ethereum, Arbitrum, Base and BNB Smart Chain. The team later acknowledged that an earlier bug bounty report about the vulnerability had been dismissed as intended behavior and opened an internal review of its security processes.

Other projects have also moved away from standalone chains after technical failures or security breaches. In August, BounceBit retired its chain and migrated its token to BNB Smart Chain at a 1:1 ratio after an authorization flaw allowed the theft of roughly $3 million in BB tokens. Harmony proposed winding down its layer-1 and migrating ONE to Ethereum after an exploit created unauthorized tokens and led the team to consider rolling back more than 109,000 transactions.

Next steps for ZetaChain include the second governance proposal that will detail timelines and procedures for tokenholders, validators and exchanges. Tokenholders and service providers will need to follow the forthcoming guidance to claim or convert ZETA balances once the project sets the snapshot and conversion windows. Validators will continue to earn staking rewards until the network’s shutdown timetable is enacted.