Movement Pivots to Layer 1 as On-Chain Activity Declines

Movement, an Ethereum Layer 2 (L2) blockchain whose co-founder was involved in controversy and ousted earlier this year, said it plans to launch its own Layer 1 blockchain while its current on-chain activity is showing a gradual decline.

In an X announcement on Tuesday, Sept. 16, Move Industries, the team behind the project, said that the network has “hit our ceiling as a sidechain,” arguing that moving from being an L2 on Ethereum to its own independent Layer 1 would boost performance to “10k+ TPS at sub-second latency.”

The team also promised native staking, validator-based security and an upgrade to “Move 2,” an updated version of its programming language.

Movement is built on the Move smart contract programming language, originally developed by Meta and touted for its security and performance.

“When we diligently surveyed our builders and community, we realized that the original architecture/framework was not tenable for what we have set out to accomplish. We are no longer chasing “alignment”, we are pursuing the optimal Move builder and user experience,” Torab Torabi, CEO of Move Industries, said in an X post the same day.

But on-chain figures indicate that network usage has been declining over the past few months. Data from Token Terminal shows that monthly transaction counts have been dropping since June, when they reached 7.3 million. By August, transactions had fallen to 4.8 million, a 34% drop.

Since its debut as an Ethereum L2 in late 2024, Movement has processed a total of 26.7 million transactions, placing it just above Celestia, with 19.3 million, but behind peaq at 29 million and Polkadot with 44.3 million transactions over the last 365 days, per Token Terminal.

In its X thread this week, Move Industries said that launching as an L1 would mean “no centralized sequencer” and that “nobody can stake locked tokens,” adding that the transition would be seamless for users as “the network’s state, off-chain storage, and on-chain framework will be migrated.”

The timeframe for the transition remains unclear, as Movement is initially preparing an L1 developers network, per the X thread. The Defiant reached out to Move Industries, but has not heard back by press time.

Controversial Co-Founder

The transformation comes just two months after Rushi Manche, a co-founder of Movement Labs, sued the project, following his suspension and termination this spring over an alleged market-making deal that reportedly triggered a MOVE token price drop.

MOVE is down over 90% from its all-time high, which it reached in December 2024, shortly after launching.

Last month, blockchain gaming ecosystem Ronin announced that it was pivoting from a standalone sidechain back to Ethereum as an L2, as monthly transaction count declined and its total value locked remained 95% below its pre-exploit peak.