Significant news has emerged from Abu Dhabi, the capital of the United Arab Emirates, in the blockchain world. International Holding Company (IHC), the UAE's largest conglomerate with a market capitalization exceeding $240 billion, has officially announced its abandonment of its original plan to build its own Layer 1 blockchain, opting instead for an Ethereum-based Layer 2 solution. This shift was made possible by the active promotion of the Ethereum developer community, particularly the Lambda Class team. For the global blockchain industry, this move not only represents the institutional market's trust in Ethereum's Layer 2 solutions but also symbolizes a significant step towards the Middle East becoming a "blockchain financial center."
Embracing Layer 2: Security, scalability, and market trust are key.
According to Ethereum core contributor Federico Carrone, the IHC initially intended to develop a standalone Layer 1 public chain, but after in-depth analysis, deemed the risks too high. In contrast, Layer 2, built on the Ethereum mainnet, not only offers greater security and a more mature infrastructure but also avoids the single point of failure issues common to standalone public chains.
Ultimately, IHC chose to partner with its subsidiaries Sirius International Holding and ADI Foundation to deploy a new platform called ADI Chain using Ethereum Layer 2 technology, tailored specifically for institutional applications.
Key partnerships revealed: BlackRock, Mastercard, and central banks are all involved.
This shift to Ethereum Layer 2 also allows IHC to quickly advance a series of collaborative projects related to Real-World Asset Tokenization (RWA) and stablecoin payments, including:
BlackRock and Franklin Templeton: Exploring how to issue and trade tokenized assets through ADI Chain.
Mastercard: Promoting stablecoin payment solutions in the Middle East, including cross-border remittances and B2B business payment innovations.
The UAE Central Bank has overseen the development of ADI Chain, which will serve as the settlement layer for the Dirham stablecoin in collaboration with First Abu Dhabi Bank (FAB) and the National Fund ADQ. This stablecoin will be regulated and planned for use in local and global payments, strengthening the UAE's position in the fintech sector.
ADI Chain focuses on compliance and regional expansion, targeting one billion users.
ADI Chain is built using the ZKsync technology stack, emphasizing government-grade infrastructure, security, and compliance architecture. The mainnet is now officially online, attracting over 50 projects from the Middle East, Africa, and Asia.
According to the ADI Foundation's public goals, the platform hopes to achieve its vision of "reaching one billion people" by 2030, especially in emerging markets that have not yet been widely covered by blockchain.
Why choose Ethereum Layer 2? The best choice for institution-oriented chains.
Ethereum proponents point out that compared to building their own public blockchains, Layer 2 solutions can directly inherit Ethereum's security and decentralization features, and enjoy existing development tools and massive ecosystem liquidity support, making them an ideal choice for institutional applications.
For markets like the Middle East, which highly value the integration of regulations and physical assets, Ethereum Layer 2 is better able to balance the two major needs of "scalability and regulatory compatibility," making it a core infrastructure driving the development of on-chain finance.
Ethereum wins trust in the Middle East, accelerating global institutional blockchain reform.
The IHC's shift is another significant indicator following the adoption of blockchain technology by numerous financial giants and sovereign entities, highlighting Ethereum's continued leading advantage in application scenarios such as payments, identity verification, and asset tokenization. As the blockchain industry gradually shifts from speculation to real-world applications, Ethereum Layer 2 is not only becoming the preferred choice for developers but is also becoming a common language for large institutions and governments in building digital infrastructure.
This article, titled "Abu Dhabi Giant IHC Abandons Building Its Own Public Chain and Turns to Ethereum Layer 2 to Create Institutional-Grade Blockchain Infrastructure," first appeared on ABMedia .
