Key Takeaways
Zilliqa is a public Layer 1 blockchain that was the first to implement sharding in production, enabling parallel transaction processing that scales with network size.
Zilliqa 2.0 is a major network upgrade that transitioned consensus from the original Proof of Work hybrid model to Proof of Stake and repositioned the ecosystem toward gaming and Web3 entertainment.
ZIL is the native token of the Zilliqa network, used for transaction fees, staking, and interacting with decentralized applications.
Zilliqa is a public Layer 1 blockchain founded in 2017, based on research conducted at the National University of Singapore. It was the first public blockchain to implement sharding as a scalability mechanism, allowing the network to process transactions in parallel across groups of nodes rather than sequentially across the entire network. The project has since evolved through a major upgrade called Zilliqa 2.0, which transitioned the consensus mechanism and shifted the strategic focus of the ecosystem.
How Does Zilliqa Work?
Sharding and transaction processing
Zilliqa divides its network into smaller groups of nodes called shards. Each shard processes a subset of transactions independently and simultaneously, which means overall network throughput increases as more nodes join. This is the core distinction from non-sharded blockchains, where all nodes must process every transaction, creating a fixed throughput ceiling regardless of network size.
Because sharding distributes the processing load, the network can maintain low transaction fees even as activity grows. A standard transaction fee on Zilliqa will be an average of 0.1 ZIL, set by community governance. Fees collected are used as network rewards, which contributes to the economic incentive for validators to maintain the network.
Zilliqa also achieves transaction finality without requiring additional confirmation rounds after a block is validated, which allows the network to support high-frequency and low-value transactions such as micro-payments.
Consensus mechanism
The original Zilliqa network used a hybrid model combining Proof of Work (PoW) for node identity verification with Practical Byzantine Fault Tolerance (pBFT) for block finality. Under Zilliqa 2.0, the network transitioned to a Proof of Stake (PoS) consensus model, where validators stake ZIL tokens to participate in block validation and earn rewards. This change reduced the energy requirements of the network compared to the PoW-based approach.
What Makes Zilliqa Unique?
Scilla smart contract language
Zilliqa developed its own smart contract language called Scilla, short for Smart Contract Intermediate-Level Language. Scilla is designed with a focus on formal verification, meaning contracts can be analyzed for potential security vulnerabilities before deployment. This approach aims to reduce the risk of bugs in smart contracts that handle digital assets, which has historically been a source of significant losses in the broader blockchain ecosystem.
One consideration for developers is that Scilla differs significantly from Solidity, the language used on Ethereum and most EVM-compatible blockchains. Developers familiar with Solidity need to learn a new language to build natively on Zilliqa, which limits the pool of developers who can onboard directly compared to EVM-compatible networks. The Zilliqa 2.0 roadmap includes work toward EVM compatibility, which would allow Solidity-based contracts to run alongside Scilla contracts on the network.
ZRC token standards and NFTs
Zilliqa supports multiple token standards. ZRC-2 is the fungible token standard, comparable in function to ERC-20 on Ethereum, and is used for tokens, stablecoins, and other fungible assets in the ecosystem. ZRC-6 is the NFT standard on Zilliqa, which supports royalty payments, batch minting, and additional features for creators and developers. These standards enable a range of digital assets to be issued and traded on Zilliqa-powered applications and marketplaces.
ZilSwap and DeFi on Zilliqa
ZilSwap is a decentralized exchange (DEX) native to the Zilliqa ecosystem where users can trade ZRC-2 tokens and participate in liquidity pools. ZilBridge allows users to transfer supported assets between the Zilliqa and Ethereum networks. These tools form part of the broader DeFi infrastructure available on the network, though the ecosystem has seen changes in activity levels as the project has evolved through its 2.0 transition.
Zilliqa 2.0
Zilliqa 2.0 is a comprehensive network upgrade that represents a significant shift in the project's direction. The main technical change is the transition from the original Proof of Work hybrid consensus to a Proof of Stake model, reducing energy consumption and changing how validators participate in the network. The upgrade also reflects a strategic repositioning of the ecosystem, with gaming and Web3 entertainment becoming the primary focus for application development and ecosystem growth.
The Zilliqa 2.0 roadmap additionally includes work toward EVM compatibility, which would allow developers to deploy Solidity-based smart contracts on the Zilliqa network without needing to write in Scilla. If delivered, this would significantly expand the developer base that can build on the chain. Sharding remains a core part of the Zilliqa architecture under the 2.0 upgrade, continuing to serve as the primary scalability mechanism.
What Is ZIL?
ZIL is the native token of the Zilliqa blockchain. It is used to pay transaction fees on the network, to stake with validator nodes in exchange for rewards, and to interact with decentralized applications built on Zilliqa. ZIL can be traded on major centralized exchanges including Binance, as well as on decentralized exchanges within the Zilliqa ecosystem such as ZilSwap.
Staking ZIL
ZIL holders can stake their tokens with validator nodes to contribute to network security and earn staking rewards distributed in ZIL. Reward rates depend on the total amount of ZIL staked at any given time and are variable rather than fixed. As with any staking activity, rewards are not guaranteed and can change based on network conditions and protocol parameters.
How to Buy ZIL on Binance
Log in to your Binance account and go to [Trade] then [Spot].
Type "ZIL" in the search bar to see the available trading pairs. We'll use ZIL/USDT as an example.
Go to the [Spot] box, enter the amount of ZIL you wish to purchase, select your order type, and confirm the order. Purchased ZIL will be credited to your Spot Wallet.
Zilliqa vs. Ethereum
Zilliqa and Ethereum are both Layer 1 blockchains that support smart contracts and decentralized applications, but they differ in architecture and design choices. Zilliqa uses sharding to parallelize transaction processing, while Ethereum uses a single chain with Layer 2 solutions for scaling. Zilliqa uses its own Scilla smart contract language rather than Solidity. For a broader comparison of Layer 1 and Layer 2 scaling approaches, see Blockchain Layer 1 vs. Layer 2 Scaling Solutions.
Closing Thoughts
Zilliqa is a Layer 1 blockchain that implements sharding to increase transaction throughput and has transitioned to Proof of Stake under the Zilliqa 2.0 upgrade. Its native token, ZIL, is used for transaction fees, staking, and interacting with decentralized applications. The network supports a unique smart contract language, a range of token standards, and an evolving DeFi ecosystem.
Further Reading
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