With a market capitalization in excess of $6.4 billion, Polygon leads the way as one of the world’s top crypto projects. As the largest layer-2 network on Ethereum, it has enjoyed major success since its mainnet launch back in 2020. But in order to maintain that kind of success, this project needs to keep evolving. That’s where Polygon 2.0 comes in.
An Overview of Polygon
Before looking at Polygon 2.0, it’s important to have a clear understanding of Polygon in its existing iteration. As mentioned, Polygon is a layer-2 crypto project on the Ethereum network. Founded back in 2017, it didn’t fully launch until 2020. Enjoying a rapid rise in value almost immediately, its native MATIC token saw a 10,000% boost in value in 2021.
In terms of usage and purpose, Polygon essentially aims to both enhance and expand the capacities of the Ethereum blockchain, solving some of the common problems that have plagued Ethereum for years, like slow speeds. It offers scalability, interoperability with other blockchains, and strong security, proving a popular platform for DApps development.
Thanks to this, Polygon has been one of the biggest success stories of the crypto industry in recent years. In 2022, it went from strength to strength, announcing major partnerships with big brands, like Disney and Meta. However, with other layer-2 solutions on the way, Polygon needs to continue improving and adapting, which is partly why the big Polygon 2.0 update has been unveiled.
What Is Polygon 2.0?
Polygon 2.0 is a proposed update or evolution of the Polygon Network. Providing new features and incorporating new technologies, Polygon 2.0 aims to realize the company’s objective of building the so-called “value layer of the internet.” In other words, it aims to allow anybody to create, exchange, and program value in an entirely decentralized system.
The Logic Behind Polygon 2.0
Despite being a popular and successful crypto project, Polygon isn’t perfect. One of the big criticisms is the fact that it feels fragmented, with lots of different chains (like Polygon Supernets and Polygon PoS) all separated from one another. This can lead to problems and inconsistences in the user experience.
Essentially, Polygon 2.0 is the blueprint to fix all of that. One of its main stated objectives is to unify all of the different public Polygon chains, joining them together via a cross-chain coordination protocol. So, even though there will continue to be multiple chains, the process of using them will feel more streamlined and unified.
If all goes well, this should solve some of the common problems affecting not just Polygon, but the blockchain in general, like scalability and liquidity issues. Indeed, the ultimate end goal of the project is infinite scalability and interconnectivity. If this can be achieved, Polygon Labs will be a big step closer to creating its “value layer.”
The Technology of Polygon 2.0
The first big stage of Polygon’s shift to Polgyon 2.0 is the implementation of zkEVM Validium technology. That’s quite a mouthful, but here’s how it all breaks down:
- ZK: ZK stands for zero knowledge. Zero knowledge proofs, or ZKPs, are used to prove ownership or validate a transaction without having to reveal information of the asset or transaction in question. ZK is great for user privacy, and it also helps Polygon cut the cost of transactions too.
- EVM: EVM stands for Ethereum virtual machine. This is a software platform that developers can use to create their own decentralized apps (DApps), as well as deploying new smart contracts with ease.
- Validium: Validium is a scaling solution for Ethereum. Designed to make transactions more secure, it harnesses the power of ZK-rollups and never actually storing any data on the mainnet. This can provide a major scalability boost.
What this all means in basic terms is that Polygon 2.0 will help to bridge the gaps between existing and future Polygon chains. It will make interoperability much more straightforward, removing the need for wrapped tokens, speeding up transactions, and maximizing scalability.
The Four Layers of Polygon 2.0
If you’re wondering about how Polygon 2.0 will work in action, it can be broken down into four distinct layers. Each layer has its own purpose and key components. Together, the layers will transform Polygon into a much more functional, scalable, and versatile blockchain solution.
Here’s a quick breakdown of all the layers:
- Staking Layer: First, we have the Staking Layer, which is a lot like Polygon in its current form. It uses a proof of stake, or PoS, system, with a decentralized validator manager and pool. The Staking Layer is responsible for storing validator registry data, processing new validator requests, and essentially supporting the entire validation process among Polygon’s chains.
- Interoperability Layer: Above the Staking Layer, Polygon 2.0 proposes to add an Interoperability Layer. As the name implies, this layer is all about joining the various Polygon chains together. Think of it like a connector or bridge-builder, linking Polygon chains to one another. With this layer, Polygon users will feel like they’re on a single chain.
- Execution Layer: The third layer is the Execution Layer. It’s quite complex, involving a range of technical components like mempool databases, but it basically exists to let Polygon chains to process blocks more easily.
- Proving Layer: The final and perhaps most significant layer of Polygon 2.0 is the Proving Layer. This is where the aforementioned zkEVM technology comes into play. It generates both internal and external proofs for all of the many transactions that occur across each Polygon chain, as well as aggregating proofs and providing a construction space for DApps development.
A New Token: POL
Since its inception, Polygon has been powered by the MATIC token. The reason being, the original name for Polygon was actually “Matic Network.” However, with the rollout of Polygon 2.0, it was time for a change. The MATIC token is being re-constructed and renamed as POL. So, anyone interested in investing in Polygon moving forward will want to look-up POL on their favorite exchanges, rather than MATIC.
Given Polygon’s established success and ambitious plans to become the value layer of the internet, it’s likely that the POL token will continue to be a popular choice among investors. Indeed, given the potential for Polygon 2.0 to become more scalable, useful, and efficient than ever before, POL may attract even more investment attention and activity than MATIC, although this remains to be seen.
In terms of uses and benefits, POL will be used across all of Polygon 2.0’s new chains. Users will be able to stake their POL tokens to earn validation rewards, just like they could before with MATIC. The big difference is that Polygon 2.0 will have multiple L2 chains potentially offering possible tasks, rewards, and bonuses. This could give backers more ways than before to earn more POL.
MATIC holders, meanwhile, won’t need to worry. All MATIC tokens will be migrating to POL, and anyone with a supply of MATIC tokens has a minimum of four years to convert them to POL. The old tokens can simply be sent to the new smart contract, essentially transforming them from MATIC into POL, ready for use on Polygon 2.0.
In terms of the future potential value of POL tokens, that will all depend on the relative success of the Polygon 2.0 project. For now, Polygon 2.0 is only in the initial rollout stage. It may take months or years to discern how effective these blueprints and concepts are in action, and that may well be the biggest factor in whether POL value rises or falls or not.
A New Governance System
Polygon 2.0 also proposes to introduce a brand-new governance system. Polygon Labs VP of Community and Governance, Hudson Jameson, explained that the company hopes to move to a system with more community input and participation. Essentially, this allows stakeholders and investors to feel more involved with the project and have their say on how it should develop.
In a blog post on July 19, 2023, Polygon Labs shared its vision for this new system, highlighting three key pillars of governance: Protocol Governance, System Smart Contract Governance, and the Community Treasury. It also introduced new forum topics to encourage discussion, along with an interactive vision board for users to have their say.
In brief, Polygon Labs is hoping to make community decision-making a big part of the Polygon 2.0 development and implementation processes. Even when Polygon 2.0 launches in its full form, the company states that community involvement and governance will continue to be required in the years ahead.
Polygon 2.0: A Game-Changing Upgrade
It’s no exaggeration to call Polygon 2.0 a massive change from original Polygon. This is one of the biggest shifts the crypto world has seen in 2023. Polygon has earned praise among observers for addressing some of the big criticisms that have been thrown its way in the past and implementing such a big and bold change.
It’s very ambitious, and the concept has been met with widespread excitement throughout the crypto community. Now, it simply remains to be seen how well Polygon 2.0 can live up to the hype.
