The Lisk team has launched an onchain vote to wind down the Lisk DAO. The proposal calls for burning 100 million LSK and reducing the token’s total supply by 25%.
The plan also includes transferring approximately 47 million LSK from the DAO treasury to Lisk Ltd. Meanwhile, the Lisk Chain will shut down completely on October 31, 2026.
The Lisk price showed volatility following the announcement. According to market data, the token traded around $0.087 at the time of writing.
LSK lost 5.3% over the past 24 hours. However, its weekly gain remained above 11%.
Lisk DAO shutdown vote begins
The Lisk team announced its plan to close the DAO and its related services through a proposal published on the governance forum. The proposal went live for an onchain vote on DeGov the same day.
The team will burn the DAO’s annual allocations of 15 million LSK for each year from 2027 to 2032. Another 10 million LSK allocated for 2033 will also stay out of circulation.
The total burn will therefore reach 100 million LSK. This will reduce LSK’s total supply from 400 million to 300 million.
The team said the supply reduction would limit future token emissions. Project expenses will no longer rely on LSK sales from the DAO treasury.
The Onchain Foundation will finance Lisk’s operations. The team expects the change to reduce recurring selling pressure on LSK.
Approximately 47 million LSK will go to Lisk Ltd
The proposal covers more than the token burn. Lisk Ltd will receive approximately 47 million LSK currently liquid in the DAO treasury or vested through 2026.
The team will determine the exact amount when it executes the proposal. The assets will therefore move from the community-governed treasury to the company’s control.
Lisk Ltd will also assume control of two liquidity vaults managed by the DAO through Arrakis. These vaults provide LSK-ETH liquidity on Uniswap v4 on Ethereum and Aerodrome on Base.
After the transfer, Lisk Ltd will manage liquidity on decentralized exchanges. The team will pause the governance contracts and close the Lisk Governance Forum.
Why is Lisk leaving the blockchain business?
The Lisk team acknowledged that the Ethereum Layer 2 network failed to generate enough revenue over the past two and a half years. LSK distributions for ecosystem incentives also created selling pressure on the token.
The team argued that heavy LSK spending and operational fragmentation made the existing model unsustainable. As a result, the Lisk Chain will shut down on October 31, 2026.
Lisk will continue as a financial operations platform for businesses. The new product will bring bank accounts, stablecoin balances, payments and approval processes into a single workspace.
LSK will serve as the loyalty token for the new platform. Businesses will eventually be able to earn LSK by using the platform and pay their fees with the token.
What should LSK holders do?
If the proposal passes, users will be able to unstake their LSK without paying an early-exit penalty. However, a three-day waiting period will still apply before the tokens become available.
Users holding LSK on the Lisk Chain must move their assets to Ethereum before October 31. The bridge process takes at least seven days, so the team urged users to act before the deadline approaches.
Investors holding LSK on Ethereum or a centralized exchange do not need to take any action. Lisk will position Base as one of the token’s primary networks alongside Ethereum.
