Lisk announced the closing of the chain in October, and LSK surged over 200% at one point, with 100 million tokens set to be destroyed.

A public chain announces its shutdown, but its native token suddenly surges.

Lisk recently announced that Lisk Chain will officially close on October 31, and the project will abandon the existing chain ecosystem to pivot towards enterprise-focused financial software and fund management.

After the news was released, LSK quickly surged in a short time, rising more than 200% at one point, followed by continued volatility. The high volatility also triggered large-scale short liquidations, and the market began to re-evaluate the supply changes behind this “chain shutdown.”

On the surface, this marks the end of a public chain project.

But from the perspective of the token, Lisk is actually undergoing a repositioning of assets and business model.

Lisk announces chain shutdown in October, LSK surges over 200%, 100 million tokens will be burned_aicoin_image1

First, a summary

Lisk Chain will close on October 31
Lisk will shift from public chain business to enterprise finance and stablecoin fund management
DAO plans to burn 100 million LSK
The total supply of LSK will be reduced from 400 million to 300 million
On-chain LSK needs to be migrated to Ethereum before shutdown
The surge in LSK is more driven by supply contraction + short squeeze + speculative funds
The biggest variables going forward are the execution of the burn, token migration, and whether the new business can truly generate demand

Why does “shutting down the chain” instead stimulate LSK's rise?

Under normal circumstances, when a public chain announces its shutdown, the native token often faces immense sell pressure.

But this time, Lisk has provided a very strong change on the supply side:

Directly burning 100 million LSK.

According to the Lisk DAO proposal, the plan is to burn all 100 million LSK belonging to the DAO Treasury from 2027 to 2033, accounting for 25% of the original total supply, reducing the total supply from 400 million to 300 million. Meanwhile, the future operating costs of Lisk will no longer be borne by selling LSK through the DAO, thereby reducing potential ongoing selling pressure.

This is the core reason for the market to reprice LSK.

Previous market concerns were:

Public chain development not meeting expectations → LSK lacks demand → DAO continuously releasing tokens → Supply increases.

Now the project has directly reversed this logic:

Shutdown of public chain → DAO exits → Burn 100 million → Total supply decreases → Potential sell pressure reduces.

Therefore, the market is no longer trading on “how many users Lisk Chain still has,” but rather on how much supply LSK will have in the future, and whether the new business can give the token a new purpose.

Lisk hasn’t disappeared, but has switched tracks

This is also key to understanding this market movement.

The new direction announced by Lisk is to become a fund operation platform aimed at corporate finance teams, integrating accounts, payments, approvals, and fiat and stablecoin payment tracks into one system.

In other words:

Lisk Chain is ending, but the Lisk project itself is not over.

In the future, LSK will no longer primarily function as a public chain Gas and ecosystem incentive token, but will be repositioned as a “loyalty token” within the new Lisk system. Enterprises can earn LSK rewards by using the platform and use LSK to pay related fees in the future.

This is also the biggest unknown in this transformation:

Can a token that originally relied on a public chain ecosystem re-establish real demand through enterprise financial services?

Behind the surge, there is another round of short squeezing

This recent rise in LSK did not entirely stem from fundamental reassessment.

Due to its long-term weak performance, LSK had accumulated a significant number of short positions. When the news of “chain shutdown + 25% supply burn” suddenly broke, the price rapidly increased, and shorts began to be forced to close their positions.

Recent data shows that the daily liquidation scale for LSK once exceeded 40 million dollars, with around 33.68 million dollars coming from short liquidations, significantly higher than long liquidations.

This formed a typical short-term positive feedback loop:

News stimulus → LSK rises → Shorts stop-loss/liquidate → Forced buying of LSK → Price further increases → More shorts are liquidated.

This explains why LSK could see an increase far exceeding normal fundamental changes in a short time.

Therefore, the current price cannot simply be understood as “the market has recognized Lisk's new strategy.”

A considerable part of it may come from supply shocks and leveraged liquidations.

Next, the most important thing is migration

For ordinary LSK holders, what really needs attention is not chasing the price but rather where the tokens are.

Lisk Chain will close on October 31, and the official request is for users holding on-chain LSK to migrate their tokens to Ethereum before the shutdown; the bridging process will take at least 7 days. The official also reminds on-chain staking users to complete unlocking and bridging in advance.

The current official suggestion is to start the bridging by October 21 at the latest to leave enough time.

If LSK remains on the soon-to-close Lisk Chain, subsequent asset handling will face significant risks.

After the surge, what does the market really want to see?

The biggest focus for LSK has now shifted from “public chain growth” to three questions:

When will the 100 million LSK truly be burned?

Will the migration of on-chain LSK be completed smoothly?

Can enterprise finance services create real demand for LSK?

The first two determine the supply side.

The third one determines the demand side.

If there’s only burning without new demand, then this round of surge is likely just a typical supply contraction market.

But if the new Lisk can generate sustained usage through enterprise payments, stablecoins, and fund management services and allow LSK to truly participate in it, then this chain closure will not just be a “death-like transformation,” but may become a complete reconstruction of the token economy.

Therefore, what truly deserves attention in LSK's recent surge is not how much it has risen, but who will become the new buyers after the 100 million tokens are burned.

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