Polygon 2.0, WTF Is It?
And How Can You Benefit From The Value Layer Of The Internet?
GM DOers! 🚀
I woke up today and chose to confuse you. 🥴 Here goes:
Polygon Labs has proposed an upgrade to make the Polygon PoS system into a zkEVM validium, a decentralized L2 secured by zero-knowledge proofs.
Kidding. That’s not what we’re about here at Web3 Academy. We’re here to shed light on what’s going on in the web3 space and communicate complex topics in simple words so that you can capitalize on the opportunity. 🚀
The latest complex topic: Polygon 2.0. 👀
TL;DR: Polygon (which now is its own blockchain) will merge to become a Layer 2 scaling solution for Ethereum.
And it’s what Raul predicted at the beginning of this year:
This is a very big deal but also very confusing. Today, we’ll simplify it for you. Let’s talk about:
What Polygon is and what they’ve done so far
What does Polygon 2.0 mean?
How is Polygon 2.0 different from other L2s?
What is Zero Knowledge tech?
What is the opportunity for you as a builder and investor?
But before we jump into it, an announcement: WE ARE HIRING 🥳
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Back to Polygon 2.0…
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Is Polygon The Trojan Horse Of Web3?
Polygon’s entire goal since the beginning was to make Ethereum faster and cheaper. To achieve this, they’ve built a side chain that processes transactions, which are later settled on the main Ethereum network.
It’s like how an entry-level lawyer processes all boring paperwork and later brings the results to the high-level lawyer, so they’re not overwhelmed.
If you’ve watched the series Suits, Polygon is to Ethereum what Mike is to Harvey. 🤜🤛
And ever since Polygon’s been around, they’ve made the web3 space much cheaper, faster, and overall usable.
That’s why, when the biggest brands came to experiment with web3, they chose Polygon. We’re talking, Reddit, Nike, Starbucks, and many more… 😲
This led to a skyrocket in unique wallet addresses on Polygon (about to hit 300M).
And a big increase in weekly transactions (especially when compared to Ethereum and other Layer 2 chains).
This increase in popularity has led to:
Reddit chose Polygon to onboard about 11,000,000 wallets (can’t call them people), which minted over 15,000,000 NFTs altogether.
Nike chose Polygon to give away 370,000 .SWOOSH IDs.
Starbucks choosing Polygon to launch their Odyssey NFT loyalty program.
And the partnerships don’t stop here. Polygon collaborates with web2 giants like Walt Disney, Adobe, Stripe, and many others.
With that said, when we look at the onchain activity for Polygon, the stats are incredible.
The amount of tokens deployed on Polygon is through the roof:
So are the number of NFTs deployed…
Similarly, the stats of smart contracts deployed look pretty good too:
All of the charts above showcase businesses who are building on Polygon, using web3 tools like tokens, NFTs, and smart contracts.
And it’s not only web2 brands building on Polygon. Web3 brands like Lens Protocol are too. To better understand that, check out our PRO report on Lens here.
But there’s 1 major problem: Polygon only has 100 validators (the people who secure the blockchain).
This makes Polygon’s current blockchain very centralized and exposed to risk. And if it ever got hacked or if it went down, along with all the brands building on it, this industry would be completely screwed.
That's why Polygon needs to level up its security and the way it’s doing so, is by borrowing security from Ethereum, through Polygon 2.0.
Now… Let’s see WTF this upgrade is about, shall we?
Oh, and Polygon also made it in Time Magazine’s top 100 Most Influential Companies of 2023 list.
Polygon 2.0. WTF Is It?
Initially, I was concerned that Polygon is moving away from scaling Ethereum to becoming a competitor (which would be a bad move).
But, Ryan Wyatt (CEO of Polygon) replied saying:
And that made me think: Raul might’ve been right at the start of the year. A blockchain transitioning to become a layer 2 scaling solution. Interesting.
And that’s exactly what was announced on Tuesday:
Today, Polygon is a proof-of-stake blockchain that settles transactions fast and cheap. They then take these transactions and settle them on the Ethereum blockchain.
It’s indirectly helping Ethereum be faster and cheaper. 💪
With this new proposal (which needs to be accepted by the community & current validators), Polygon will merge to be a Layer 2 scaling solution, like Optimsm and Arbitrum, giving up on its own blockchain.
The upgrade is called Validium and is set to lower security risks, lower gas fees, and increase scalability. ⚖️
I would explain how all of this works. Layer 2s are fascinating. But what’s the point? You will not be able to take action on this information anyway.
Instead, all you need to know is this:
At the moment, this is simply a proposal that needs to be approved by the community.
If accepted, this upgrade will go live in early 2024.
The upgrade will scale the tech in the back-end but for you as a user, everything will be exactly the same.
The benefits are: boosted security and scalability, elimination of block reorgs, reduced transaction confirmation times, and lower fees.
So, now that you know all of this, let’s tackle the natural question: Is Polygon going to become just another Layer 2? 🤔
Nope… Keep reading to find out how this is different. 👇
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Polygon 2.0. How Is It Different From Other Layer 2s?
Polygon doesn’t strive to solely scale Ethereum. Scaling Ethereum refers to the act of increasing blockspace, aka providing more bandwidth for onchain activity to happen.
To understand what Polygon 2.0 strives to become, you need to understand 2 things:
Megachain = Refers to how 1 chain is supposed to settle all onchain activity. For example, Solana wants to become a megachain.
Multichain = A world where multiple blockchains thrive, all satisfying different needs and demands. Imagine a world where Ethereum only settles DeFi transactions and Solana settles only gaming activity.
The problem with the 2 is:
Megachains eventually run out of blockspace and can’t handle more transactions,
A world of multichains offer a really bad UX for the end-user, who’s forced to bridge from a blockchain to another.
YIKES. 🤢
What Polygon 2.0 wants to do is unite the narratives of a megachain and a multichain into one ecosystem.
Here’s what Polygon says this means for the end user:
This is completely revolutionary for UX. Any user that interacts with Polygon 2.0 will only experience the smooth experience, without being asked to sign transactions or move across chains.
It’s basically what we’ve asked for all this time… 💜
But why is Polygon able to achieve this before any other blockchain? Because Zero-Knowledge Technology. 🤫
ZK technology is an encryption technology that allows parties to prove and verify information without having insight into the information itself.
It’s like you can prove to the bartender that you’re 21 without stating your age. 🪪
In the case of Layer 2s and on the topic of scalability, ZK tech allows Polygon to create a shared infrastructure underneath, using ZK bridges, to connect every Polygon chain to each other, and all to Ethereum.
It’s like the saying ‘All roads lead to Rome’. Only in this case, Rome is Ethereum.
Users can take any path to transact on the blockchain (usually, they’ll choose the less congested one), but whatever they choose, it’ll all lead to Ethereum, through Polygon 2.0.
And that’s what differentiates Polygon 2.0 from all other Layer 2s out there.
I hope I was able to explain this in layman's terms. If you’re still confused, don’t worry! You shouldn’t need to know all of this anyway. The only thing you need to care about is the fact that the benefits of using Polygon will multiply.
What’s Next?
Polygon has released a brief roadmap of things to come… We don’t have much detail as to what’s exactly en-route, but the roadmap states 2 interesting factors: Token & Governance.
It’ll be interesting to see if Polygon switches up their tokenomics at all, to better reflect this upgrade.
For now, we won’t speculate… We’ll just wait until mid-July to find out more.
But we do want to give you, as a PRO, the chance to capitalize on the opportunity!! So let’s talk about what you can do right now to benefit from this financially. 💸
The following section is for PRO members only. 👇