Hack‑VC‑Backed Nillion to Shut Down NilChain on Cosmos, Pivot to Ethereum
The privacy‑focused layer‑1 project announced that NilChain will cease operations on March 23, urging NIL‑token holders to migrate to Ethereum. The move follows a broader re‑evaluation of the Cosmos ecosystem, which has seen a steady decline in TVL, fees and developer activity.
Nillion’s latest announcement
On 17 February Nillion posted on its X account that NilChain – the Cosmos‑SDK based network built for secure multi‑party computation – will be wound down by the end of March. Token holders are asked to transfer their NIL assets to an Ethereum address before the shutdown date.
The NilChain token experienced a brief rally after the news, climbing more than 10 % to around $0.06, before settling near $0.053 according to CoinGecko data.
Why the shift?
Nillion has not commented on the specific reasons behind the migration, but the timing aligns with several ecosystem‑wide signals:
| Cosmos‑wide trend | Recent development |
|---|---|
| Smart‑contract plan abandoned – In July 2025 the Cosmos Hub scrapped its roadmap to add native smart‑contract support, citing high costs and limited developer demand. | Project exodus – Since mid‑2025 a number of Cosmos‑based projects (e.g., Noble, Pryzm, Quasar) have either shut down or announced departures. |
| TVL collapse – Total value locked on the Cosmos Hub fell from roughly $2.65 M to $131 k, the lowest level on record. | Fee decline – Monthly network fees slumped to an all‑time low of about $218 k in January, with only four of eleven deployed protocols generating revenue. |
These metrics suggest that the Cosmos ecosystem is struggling to attract liquidity and developer interest, especially for public‑facing DeFi applications. For a privacy‑oriented infrastructure project like Nillion, the limited user base and weak economic activity may have made the Cosmos launch less viable.
Nillion’s background and funding
Founded in 2022, Nillion focuses on “blind” or confidential computation, enabling data to be processed without exposing raw inputs. The company has secured substantial venture backing:
- December 2022 – $20 M seed round led by Distributed Global, with participation from GSR Markets and HashKey.
- October 2024 – $25 M Series A led by Hack VC, alongside the Arbitrum Foundation, Worldcoin, Sei, HashKey Capital, and Animoca Brands.
The infusion of capital underscores investor confidence in the underlying technology, even as the team refocuses its deployment strategy toward Ethereum, a network with a larger developer community and broader user adoption.
What the migration means for token holders
Nillion’s X post includes a step‑by‑step guide for moving NIL tokens to Ethereum. The process involves:
- Locking NIL on the NilChain contract – Users must deposit their tokens into a designated escrow address before the shutdown deadline.
- Claiming equivalent ERC‑20 tokens on Ethereum – After the cut‑over, the same amount of NIL (now represented as an ERC‑20) will be released on the Ethereum address provided.
The success of this migration will depend on the robustness of Nillion’s bridge and community communication. A smooth transition could preserve token value, while any hiccups could expose holders to additional risk.
Broader implications for the Cosmos ecosystem
Nillion’s departure adds to a growing list of projects exiting or scaling back on Cosmos. The trend raises several questions for the hub’s future:
- Is Cosmos repositioning itself as a pure interoperability layer rather than a standalone DeFi hub?
- Will remaining projects double down on niche use‑cases (e.g., privacy, cross‑chain bridges) that play to Cosmos’ strengths?
- Can the Cosmos governance and development teams revive developer incentives to halt the TVL and fee decline?
The answers will shape whether Cosmos can retain relevance as a “hub of hubs” or become a more specialized network for specific infrastructure services.
Key takeaways
- NilChain shutdown: Nillion will cease operations on Cosmos on 23 March 2026, directing NIL token holders to migrate to Ethereum.
- Token reaction: NIL briefly surged >10 % after the announcement, now trading around $0.053.
- Cosmos context: The hub has recently abandoned its smart‑contract roadmap and is experiencing record lows in TVL and network fees.
- Industry trend: Several Cosmos projects have announced exits or pivots since mid‑2025, indicating a broader ecosystem recalibration.
- Strategic pivot: Backed by Hack VC and other notable investors, Nillion is betting on Ethereum’s larger developer pool to accelerate adoption of its privacy‑focused computation layer.
- Potential risks: Successful token migration hinges on bridge reliability; any delays could affect token price and community trust.
Nillion’s move underscores the challenges that newer layer‑1s face when competing for developer and user attention in an increasingly crowded blockchain landscape. As the Cosmos ecosystem undergoes a strategic shift, projects that can align with its emerging focus on interoperability may be better positioned for long‑term survival.
Source: https://thedefiant.io/news/blockchains/nillion-nilchain-leaves-cosmos-for-ethereum
