Matter Labs lays off staff and fully shifts to the institutional privacy platform Prividium, with the future direction of zkSync yet to be determined

The development company behind zkSync, Matter Labs, announced layoffs on Tuesday and is fully transitioning the entire organization to the institutional-grade on-chain privacy infrastructure platform Prividium. CEO Alex Gluchowski defined this move on X as a skills restructuring rather than a cost-cutting measure, stating that the products built for regulated financial institutions since 2024 have evolved into Prividium, aiming to provide on-chain infrastructure that combines transaction confidentiality with compliance auditing capabilities for regulated entities such as banks and asset management companies.

Gluchowski mentioned that this transformation is based on specific product feedback from institutional clients, but did not disclose the number of layoffs. According to CoinGecko data, the market capitalization of the zkSync token is approximately $115 million, having risen 4.3% in the past 24 hours. This transformation reflects a broader trend in the Layer 2 market, as ZK and L2 projects like Hyli and Botanix have shut down, and general-purpose horizontal platforms are facing pressure to find defenses in vertical fields. As of the time of publication, Matter Labs has not made any statements regarding the future of the zkSync network and ZK tokens.