What Is Zilliqa? A Scalability-First Layer 1 Blockchain

Zilliqa is a high-performance Layer 1 blockchain designed with scalability as its core principle. Developed by a Singapore-based team, it aims to address the structural bottlenecks of traditional blockchains in transaction speed and throughput at the protocol level. As one of the earliest blockchains globally to introduce sharding natively on mainnet, Zilliqa restructures how blockchains operate by splitting the network into multiple shards that can process transactions in parallel, rather than relying on full-network broadcast.

As blockchains are increasingly viewed as global financial and computational infrastructure, network performance, determinism, and security have become key constraints on application-scale adoption. Zilliqa is built on the core assumption that “node scale equals performance capacity.” Through native sharding architecture, a hybrid consensus mechanism, and immediate finality design, Zilliqa achieves the ability to process thousands of transactions per second, providing predictable and stable base-layer performance for high-frequency trading, enterprise applications, and regulated environments, occupying a unique engineering position in the public blockchain scalability landscape.

This article systematically introduces Zilliqa’s origin and design motivations, core technical innovations, and consensus mechanisms, explaining how it balances throughput and security. It further clarifies the role and incentive logic of the ZIL token in network operations, while exploring Zilliqa’s strategic choices in performance trade-offs and compliance orientation, as well as the significance of its alignment with LTIN at the operational and infrastructure level. Together, these perspectives help readers fully understand how Zilliqa rethinks blockchain scalability from an engineering standpoint and evaluate its long-term value in the next phase of blockchain infrastructure evolution.

What is Zilliqa?

(Source: zilliqa)

Zilliqa (ZIL) is a high-performance Layer 1 blockchain designed with scalability as its core principle. Developed by a Singapore-based team, its goal is to solve the structural bottlenecks of traditional blockchains in transaction speed and throughput.

As one of the earliest blockchains to implement sharding in practice, Zilliqa improves overall network performance by splitting the entire network into multiple shards that operate in parallel, with each shard independently processing transactions. This enables the network to achieve transaction throughput of several thousand transactions per second (TPS).

Background of the Zilliqa project

In early blockchain design, decentralization, security, and scalability were widely regarded as a trilemma that could not be satisfied simultaneously. Bitcoin and Ethereum prioritized security and decentralization, at the cost of extremely low transaction throughput. This design was workable when user and application numbers were limited, but problems quickly emerged as blockchains began to be seen as global financial and computational infrastructure.

Zilliqa is a direct response to this bottleneck. From the outset, its whitepaper clearly stated that if a public blockchain cannot increase throughput without sacrificing security, all application-layer innovation will ultimately be constrained by base-layer performance. As a result, rather than making incremental parameter adjustments to existing architectures, Zilliqa chose to rethink blockchain scalability from the protocol layer up.

Zilliqa’s core innovations

Zilliqa’s most representative innovation is its treatment of sharding as a native Layer 1 capability. In traditional public blockchains, an increase in node count often leads to higher consensus costs and ultimately reduced performance. Zilliqa takes the opposite approach, treating node scale as a resource for improving performance.

By dividing the entire network into multiple shards, with each shard processing only a portion of total transactions, Zilliqa theoretically enables a linear scaling model in which more nodes result in higher throughput. This design directly challenges the early assumption that blockchain performance and decentralization are mutually exclusive.

How Zilliqa improves throughput and security simultaneously

Sharding alone is insufficient for practical operation. Zilliqa further distinguishes, at the design level, who processes transactions and how transactions are assigned. At the network layer, nodes are randomly assigned to different shards, each of which runs its own consensus independently. At the transaction layer, each transaction is sent only to a specific shard for processing, rather than being broadcast to the entire network. This design effectively limits the workload of each shard to a manageable range.

Through account address and transaction allocation rules, Zilliqa ensures that transactions from the same account always enter the same shard, eliminating the possibility of cross-shard double-spending at the architectural level and avoiding the need for costly cross-shard synchronization mechanisms.

Division of responsibilities between DS Blocks and Transaction Blocks

To ensure stability and governability of the sharding system, Zilliqa introduces a dual-layer blockchain structure.

• DS Blocks (Directory Service Blocks) record node identities, shard configurations, and network state, ensuring system-wide consensus on the sharding structure.

• Transaction Blocks focus on transactions themselves. Each shard first generates micro blocks, which are then aggregated by the DS committee into a final block.

This division allows Zilliqa to process large volumes of transactions in parallel without sacrificing consistency, reducing system complexity and synchronization overhead.

Zilliqa’s consensus mechanism

Zilliqa does not use Proof of Work (PoW) as its transaction consensus mechanism. Instead, PoW is limited to identity generation and Sybil attack resistance. Nodes must prove computational cost through PoW to participate in sharding and consensus, reducing the risk of large-scale malicious node infiltration at the source.

Actual transaction confirmation is handled by a PBFT-like consensus mechanism, allowing Zilliqa to achieve immediate finality once a block is confirmed. This avoids the reorganization and fork issues common in PoW chains and is particularly important for high-frequency trading and enterprise applications.

How multi-signatures improve efficiency and finality

Zilliqa uses a PBFT consensus algorithm, whose core value lies in its ability to reach fast agreement in Byzantine environments, but which traditionally suffers from high communication overhead. Zilliqa addresses this by introducing Schnorr multi-signatures, aggregating large numbers of signatures into a single verification result. This significantly reduces data size and communication rounds.

This improvement allows PBFT to move from a theoretical model to a practically deployable large-scale system, enabling Zilliqa to maintain acceptable consensus efficiency even as shard and committee sizes increase.

The role of the ZIL token: network operation, fees, incentives

Consider ZIL as the economic lubricant of the entire system, rather than just a payment token. Nodes receive rewards for participating in consensus and computation, while users pay gas fees to consume network resources, forming a self-reinforcing incentive structure. Its inflation curve reflects Zilliqa’s focus on long-term network stability rather than short-term mining incentives.

Design limitations and trade-offs of Zilliqa

Zilliqa has never attempted to become a blockchain that does everything. It clearly recognizes that a performance-oriented approach necessarily involves trade-offs. As such, it sacrifices some degree of generality in exchange for predictable scalability and a robust security model. While this means it is not dominant in certain DeFi and NFT narratives, it maintains strong internal consistency at the engineering level.

Alignment with LTIN’s operational direction

At the operational architecture and base infrastructure level, Zilliqa is gradually aligning with the development direction of the Liechtenstein Trusted Integrity Network (LTIN).

LTIN provides a set of identity, verification, and compliance infrastructure with nation-state-level trust and regulatory alignment, which is a critical component of Zilliqa’s strategy for advancing enterprise adoption, institutional participation, and regulated use cases.

Through this operational alignment, Zilliqa strengthens its ability to serve enterprise users, financial institutions, and compliance-focused markets without sacrificing openness, composability, or decentralization principles, laying the foundation for broader mainstream adoption.

Final thoughts

Zilliqa is a Layer 1 experiment that approaches blockchain design from an engineering problem-first perspective, with scalability as its first principle. Whether through native sharding architecture, hybrid consensus mechanisms, or computation and parallelization models designed for scalable execution, Zilliqa consistently addresses the same core question: how can blockchains support large-scale applications without compromising security?

Even as market narratives increasingly shift toward Layer 2 and modular architectures, Zilliqa’s exploration retains long-term reference value, reminding the industry that true scalability often comes from rethinking base-layer architecture rather than simply stacking solutions on top.

Further Reading

• Zilliqa 2.0: Staking Mechanism to Undergo Comprehensive Upgrade
• What is Proof-of-Stake and Why It Matters for Zilliqa 2.0