The Evolution of Polygon

Polygon, one of the oldest players in the blockchain scaling industry, has come a long way since its inception in late 2017. Marc Boiron, CEO of Polygon Labs, provided a comprehensive overview of Polygon's journey and its current vision. Initially conceived as a solution to scale Ethereum, Polygon's first major offering was Polygon POS (Proof of Stake), which launched in 2022.

Polygon POS, best described as a side chain, addressed Ethereum's need for a fast and incredibly cheap scaling solution. While it didn't inherit Ethereum's security, it played a crucial role in alleviating Ethereum's scalability issues, particularly during the DeFi Summer. The success of Polygon POS led to significant activity on the network, prompting the founders to explore more advanced scaling solutions.

Recognizing the limitations of their initial approach, Polygon's team identified ZK (Zero-Knowledge) technology as the future of scaling. This realization led to the acquisition of two companies with expertise in ZK technology: Merk protocol (now known as Polygon Zero) and another team referred to as Polygon RMS. These acquisitions positioned Polygon at the forefront of ZK technology development.

The Rise of ZK Technology

As Polygon experienced rapid growth, the team saw an opportunity for mass adoption of blockchain technology. This led to partnerships with major brands like Starbucks and Nike, bringing a significant influx of users to the Polygon ecosystem. The strategy behind these partnerships was based on the belief that Web2 companies would gradually increase their blockchain integration over time.

The development of ZK technology progressed faster than anticipated, allowing Polygon to launch Polygon ZKVM, a full layer two roll-up. This marked a significant milestone in Polygon's evolution, although many still associate the platform primarily with Polygon POS.

The Chain Development Kit (CDK)

Recognizing the future of blockchain as multi-chain with numerous roll-ups and L2s, Polygon created the Chain Development Kit (CDK). This tool enables the easy creation of new chains, paving the way for a more diverse and scalable blockchain ecosystem.

The Aggregation Layer: Polygon's Vision for the Future

Polygon's latest innovation, the Aggregation Layer (AggLayer), addresses the challenge of fragmentation in the roll-up ecosystem. Brendan Farmer, co-founder of Polygon, explained that the AggLayer is designed to bring together modular blockchains that can be easily spun up and aggregated.

The AggLayer consists of two main components:

1. A decentralized service that aggregates proofs and ensures consistency of cross-chain messages at lower latency than Ethereum.
2. Emergent coordination infrastructure, including shared sequencers, relays, and cross-roll-up block builders.

How the Aggregation Layer Works

The AggLayer provides a cryptographic guarantee that allows chains to safely interoperate at lower latency than Ethereum finality. This is achieved by allowing roll-ups to exchange messages either asynchronously or through synchronous bundles of transactions that execute atomically.

When one roll-up accepts a message from another, it commits to the state that produced that message. If the originating roll-up fails to produce a proof or equivocates, the receiving roll-up is protected from being settled on Ethereum with an inconsistent state.

This system enables seamless bridging of assets across the Polygon ecosystem, including both L1 native and L2 native assets. The AggLayer provides the underlying foundation for this interoperability, while the emergent coordination infrastructure built on top allows for shared resources and more efficient cross-chain interactions.

The Benefits of the Aggregation Layer

The AggLayer offers several significant advantages:

1. Reduced latency: Cross-chain transactions can be executed much faster than traditional methods that require multiple steps and Ethereum finality.
2. Improved user experience: Seamless bridging and shared liquidity create a more unified and user-friendly ecosystem.
3. Enhanced security: The cryptographic guarantees provided by the AggLayer ensure that cross-chain interactions remain secure and consistent.
4. Scalability: The ability to easily add new chains to the ecosystem allows for horizontal scaling to meet growing demand.

The Future of Blockchain Scaling

Polygon's approach to blockchain scaling differs from some other popular solutions in the industry. While some believe that a few dominant L2s will emerge, Polygon envisions a future with many roll-ups, potentially hundreds or even thousands.

This vision is based on the belief that different applications and use cases will require varying levels of security, performance, and customization. By allowing for multiple specialized chains, Polygon aims to create an ecosystem that can cater to a wide range of needs while maintaining interoperability through the AggLayer.

ZK Technology: The Core of Polygon's Strategy

Zero-Knowledge technology lies at the heart of Polygon's scaling strategy. The company has invested heavily in ZK research and development, spending close to a billion dollars on advancing this technology. This investment has led to significant improvements in proving systems and cost reductions.

Brendan Farmer shared some impressive benchmarks for their ZK proving systems:

• The average cost for proving an Ethereum block is between one and two-tenths of a cent per transaction.
• Upcoming upgrades to the proving system (from Plonky2 to Plonky3) are expected to make this 30 to 50 times cheaper.
• Latency is expected to be around 30 seconds, regardless of transaction complexity.
• Future optimizations could bring the cost down to a few hundredths or even some thousandths of a cent per transaction.

Proof Aggregation: Enhancing Efficiency

One of the key features of the AggLayer is proof aggregation. This process allows for the amortization of proving costs across multiple users on different chains. By wrapping multiple proofs together and submitting them to Ethereum as a single proof, the overall cost of proving for all chains in the aggregate becomes distributed among all users, resulting in significantly lower costs.

The Impact of EIP-4844 on Data Availability

The upcoming Ethereum Improvement Proposal 4844 (EIP-4844) has generated much discussion in the blockchain community regarding its potential impact on data availability costs. While some have predicted a 100x improvement, both Marc and Brendan expressed a more conservative view.

They expect to see a reduction in data availability costs in the short term but believe that as demand for blob space increases and the price of ETH rises, the benefits may not be as pronounced as some have claimed. However, they noted that ZK systems have an advantage in this area, as they can operate in a "validity" mode that doesn't require putting all data on Ethereum or other data availability layers.

The Importance of Choice in Data Availability

Marc emphasized the importance of offering choices in data availability solutions. He described a spectrum of options, each with different security trade-offs and costs:

1. Local data availability for low economic value applications
2. Data availability committees for slightly higher security needs
3. Specialized data availability solutions like Celestia, Eigen DA, or Near DA
4. Ethereum-level security for the highest value applications

This approach allows developers to choose the appropriate level of security based on their application's economic value and user needs. It also provides a path for applications to evolve their security model as they grow and attract more users or value.

The Decision to Migrate from MATIC to POL

Polygon recently made the decision to migrate its token from MATIC to POL. This move was driven by the need to upgrade the token's functionality and enable new features, such as the staking hub. The new token allows for decentralizing functions like sequencers on various CDK chains and provides economic benefits for the ecosystem.

Marc explained that the migration was necessary because the original MATIC token was non-upgradable. The new POL token serves the same purpose as MATIC but with enhanced capabilities. This approach allows new CDK chains to launch with the economic security of a high market cap token without needing to immediately create their own token.

Polygon's Approach to Token Economics

Unlike some projects in the industry that have launched multiple tokens for different aspects of their ecosystem, Polygon has chosen to maintain a single token. This decision reflects their commitment to a unified ecosystem and simplifies the economic model for users and developers.

The POL token's design includes a 1% inflation rate, which is allocated to a governance body. This body can choose how to distribute these funds, including allocating them to new CDK chains. This mechanism allows new chains to benefit from the economic security of the established POL token while giving them the flexibility to launch their own token when it makes sense for their project.

The Role of ZK Technology in Polygon's Future

Throughout the discussion, it became clear that ZK technology is central to Polygon's vision for the future of blockchain scaling. The company's significant investment in this area has positioned them as leaders in ZK research and development.

Some key advantages of ZK systems highlighted in the conversation include:

1. Enhanced security guarantees
2. Flexibility in data availability solutions
3. Potential for lower costs and higher scalability
4. Ability to support heterogeneous execution environments

Polygon's Multi-Product Strategy

Polygon currently offers several products, including the AggLayer, ZK roll-ups, the Chain Development Kit (CDK), and Polygon Avail. When asked about the challenges of managing multiple focus areas, Marc acknowledged that the company had ventured into doing too many things in the past.

To address this, Polygon has taken steps to streamline its offerings:

1. Spinning off some projects, such as Polygon Avail and Polygon ID
2. Focusing on core strengths, particularly ZK technology
3. Concentrating efforts on the Polygon CDK and the AggLayer

The existing products, such as Polygon POS, Polygon ZKVM, and Polygon Miden, are being integrated into the broader Polygon ecosystem. These chains serve as examples of what can be built using the Polygon CDK and demonstrate different attributes and use cases for specialized chains.

The Competitive Landscape of L2 Solutions

The conversation touched on the current state of Layer 2 (L2) solutions, particularly the dominance of optimistic roll-ups in the market. Both Marc and Brendan expressed some frustration with the shortcuts taken by some L2 projects to launch quickly and acquire users at the expense of security guarantees.

They argued that while optimistic roll-ups were faster to market and offered better user and developer experiences initially, the rapid advancement of ZK technology is changing the landscape. Polygon's focus on ZK technology positions them to offer solutions that combine strong security guarantees with improved performance and user experience.

The Importance of Security in Blockchain Scaling

A key theme throughout the discussion was the importance of maintaining strong security guarantees while scaling blockchain networks. Marc emphasized the need to return to the "crypto roots" of building systems that offer unique capabilities not possible in Web2 environments, but in a secure way.

Both speakers criticized the trend of some roll-ups taking shortcuts on security to launch quickly and acquire users and TVL (Total Value Locked). They argued that while this approach might lead to short-term gains, it goes against the fundamental principles of blockchain technology and the reasons many people, including themselves, entered the industry.

The Role of Community and Social Factors

Marc highlighted the importance of social and community factors in the blockchain industry, noting that crypto is "social, financial, and technical." He observed that some chains have done a good job of ingratiating themselves on the social level, which has given them a pass on certain technical shortcomings.

The Polygon team aims to balance these factors by building strong technical solutions while also engaging with the community and emphasizing the importance of security and scalability.

Polygon's Vision for the End State of Crypto

Throughout the conversation, both Marc and Brendan emphasized their belief in a multi-chain future with numerous specialized roll-ups catering to different use cases. They see the AggLayer as a crucial piece of infrastructure that will enable this vision by providing seamless interoperability and shared liquidity across diverse chains.

Key aspects of this vision include:

1. Horizontal scalability to meet growing demand
2. Accommodation of heterogeneous requirements for security, user experience, and decentralization
3. Flexibility for developers to choose the right trade-offs for their specific applications
4. A unified ecosystem that preserves choice while minimizing fragmentation

The Importance of Optionality in Blockchain Development

A recurring theme in the discussion was the importance of providing options and flexibility for developers and users. This philosophy is reflected in Polygon's approach to data availability solutions, chain development, and even the evolution of applications within the ecosystem.

Marc described a potential development path for applications:

1. Launch on Polygon POS to test product-market fit with minimal overhead
2. Evolve to a more specialized solution as user interest grows
3. Eventually launch a dedicated chain when it makes sense for the application's needs

This approach allows developers to start small and scale their blockchain integration as their project grows and evolves.

The Future of Blockchain Interoperability

The AggLayer represents Polygon's vision for the future of blockchain interoperability. By providing a unified layer for cross-chain communication and liquidity sharing, Polygon aims to create an ecosystem where the boundaries between different chains become less relevant from a user perspective.

This approach contrasts with the current state of the industry, where bridging between chains often involves multiple steps, high latency, and security risks. The AggLayer's ability to enable low-latency, secure cross-chain interactions could be a game-changer for the usability and adoption of blockchain technology.

Challenges and Opportunities in the L2 Ecosystem

The conversation highlighted some of the challenges facing the L2 ecosystem, including:

1. Balancing speed to market with security guarantees
2. Educating users and developers about the importance of robust security models
3. Overcoming the fragmentation of liquidity and users across multiple chains
4. Addressing the limitations of optimistic roll-ups in terms of withdrawal times and trust assumptions

Polygon's focus on ZK technology and the AggLayer aims to address these challenges while creating new opportunities for developers and users in the blockchain space.

The Role of Traditional Companies in Blockchain Adoption

Marc touched on Polygon's partnerships with major brands like Starbucks and Nike, highlighting how these collaborations have brought many new users to the blockchain ecosystem. The strategy behind these partnerships is based on the belief that traditional Web2 companies will gradually increase their blockchain integration over time.

This approach of onboarding established brands and their user bases could play a crucial role in driving mainstream adoption of blockchain technology. As these companies become more comfortable with blockchain, they are likely to expand their use cases and potentially drive innovation in the space.

The Importance of Developer Experience

Throughout the discussion, both Marc and Brendan emphasized the importance of creating a positive developer experience. The Polygon CDK and the AggLayer are designed to make it easier for developers to create and deploy blockchain solutions without having to worry about complex infrastructure or liquidity bootstrapping.

By providing tools and infrastructure that simplify blockchain development and deployment, Polygon aims to attract more developers to the ecosystem and foster innovation across a wide range of use cases.

Conclusion: Polygon's Role in Shaping the Future of Blockchain

As the conversation wrapped up, it became clear that Polygon's vision for the future of blockchain goes beyond simply scaling Ethereum. Through their investment in ZK technology, the development of the AggLayer, and their commitment to providing flexible solutions for developers, Polygon is positioning itself as a key player in shaping the next generation of blockchain infrastructure.

The team's focus on security, scalability, and interoperability, combined with their pragmatic approach to adoption and development, suggests that Polygon will continue to be a significant force in the blockchain industry for years to come. As the ecosystem evolves and new challenges emerge, Polygon's adaptable and forward-thinking strategy may well prove to be a blueprint for success in the rapidly changing world of blockchain technology.

Facts + Figures

• Polygon was conceived in late 2017/early 2018 as a solution to scale Ethereum.
• Polygon POS, launched in 2022, is described as a side chain that provided fast and cheap transactions for Ethereum.
• Polygon acquired two ZK technology companies: Merk protocol (now Polygon Zero) and Polygon RMS.
• Polygon ZKVM is a full layer two roll-up launched by Polygon.
• The Chain Development Kit (CDK) allows for easy creation of new chains within the Polygon ecosystem.
• The Aggregation Layer (AggLayer) is designed to bring together modular blockchains and solve the fragmentation problem in the roll-up ecosystem.
• The average cost for proving an Ethereum block using Polygon's ZK technology is between one and two-tenths of a cent per transaction.
• Upcoming upgrades to the proving system (from Plonky2 to Plonky3) are expected to make proving 30 to 50 times cheaper.
• Latency for ZK proofs is expected to be around 30 seconds, regardless of transaction complexity.
• Polygon has invested close to a billion dollars in ZK technology research and development.
• The POL token, which replaced MATIC, has a 1% inflation rate allocated to a governance body.
• Polygon has spun off several projects, including Polygon Avail and Polygon ID, to focus on core strengths.
• Polygon's vision includes the potential for thousands of specialized chains catering to different use cases.
• The AggLayer is designed to be neutral infrastructure, not focused on value extraction or rent-seeking.
• Polygon has partnerships with major brands like Starbucks and Nike, bringing many new users to the blockchain ecosystem.

Questions Answered

What is Polygon's Aggregation Layer?

Polygon's Aggregation Layer (AggLayer) is a decentralized service designed to aggregate proofs and ensure consistency of cross-chain messages at lower latency than Ethereum. It provides a cryptographic guarantee that allows chains to safely interoperate and share liquidity across the Polygon ecosystem. The AggLayer aims to solve the fragmentation problem in the roll-up ecosystem by bringing together modular blockchains and enabling seamless interaction between them.

How does Polygon's ZK technology compare to optimistic rollups?

Polygon's ZK technology offers several advantages over optimistic rollups. ZK rollups provide stronger security guarantees, as they use zero-knowledge proofs to verify the validity of transactions. This means that even if proving is permissioned, users still have a guarantee that their funds cannot be stolen unless the proving system itself is broken. ZK rollups also offer faster finality and lower withdrawal times compared to optimistic rollups. However, optimistic rollups were faster to market initially, which allowed them to gain traction in terms of user adoption and liquidity.

What is Polygon's vision for the future of blockchain scaling?

Polygon envisions a future with many specialized rollups, potentially hundreds or thousands, catering to different use cases and requirements. This approach differs from the view that a few dominant L2s will emerge. Polygon believes that different applications will require varying levels of security, performance, and customization. The Aggregation Layer plays a crucial role in this vision by enabling seamless interoperability and shared liquidity across these diverse chains, creating a unified ecosystem that preserves choice while minimizing fragmentation.

How does Polygon plan to attract developers to its ecosystem?

Polygon focuses on creating a positive developer experience through several initiatives. The Chain Development Kit (CDK) allows for easy creation of new chains within the Polygon ecosystem. The Aggregation Layer simplifies cross-chain interactions and liquidity sharing. Polygon also provides flexible data availability solutions, allowing developers to choose the appropriate level of security and cost for their applications. By offering these tools and infrastructure, Polygon aims to make it easier for developers to create and deploy blockchain solutions without worrying about complex infrastructure or liquidity bootstrapping.

What role does ZK technology play in Polygon's strategy?

ZK technology is central to Polygon's vision for the future of blockchain scaling. The company has invested heavily in ZK research and development, positioning itself as a leader in this field. ZK technology offers enhanced security guarantees, flexibility in data availability solutions, potential for lower costs, and higher scalability. It also allows Polygon to support heterogeneous execution environments, catering to a wide range of use cases. Polygon's focus on ZK technology aims to combine strong security guarantees with improved performance and user experience.

Why did Polygon decide to migrate from MATIC to POL token?

Polygon decided to migrate from MATIC to POL token primarily because the original MATIC token was non-upgradable. The new POL token serves the same purpose as MATIC but with enhanced capabilities. It allows for decentralizing functions like sequencers on various CDK chains and provides economic benefits for the ecosystem. The POL token includes a 1% inflation rate allocated to a governance body, which can distribute funds to new CDK chains. This approach allows new chains to benefit from the economic security of the established POL token while maintaining flexibility for future development.

How does Polygon approach data availability in its scaling solutions?

Polygon emphasizes the importance of offering choices in data availability solutions. They describe a spectrum of options with different security trade-offs and costs, ranging from local data availability for low economic value applications to Ethereum-level security for the highest value applications. This approach allows developers to choose the appropriate level of security based on their application's economic value and user needs. It also provides a path for applications to evolve their security model as they grow and attract more users or value.

What is Polygon's strategy for onboarding traditional companies to blockchain?

Polygon has partnered with major brands like Starbucks and Nike to bring new users to the blockchain ecosystem. Their strategy is based on the belief that traditional Web2 companies will gradually increase their blockchain integration over time. By onboarding established brands and their user bases, Polygon aims to drive mainstream adoption of blockchain technology. As these companies become more comfortable with blockchain, they are expected to expand their use cases and potentially drive innovation in the space.

How does Polygon plan to maintain its competitive edge in the L2 ecosystem?

Polygon maintains its competitive edge through several strategies. First, its significant investment in ZK technology positions it at the forefront of scalable and secure blockchain solutions. The development of the Aggregation Layer addresses the challenge of fragmentation in the roll-up ecosystem, offering a unique value proposition. Polygon also focuses on providing flexible solutions for developers through tools like the Chain Development Kit. By balancing technical innovation with a strong focus on developer and user experience, Polygon aims to create an ecosystem that attracts both builders and users, fostering long-term growth and adoption.

What is Polygon's approach to balancing security and scalability in blockchain development?

Polygon emphasizes the importance of maintaining strong security guarantees while scaling blockchain networks. They criticize the trend of some rollups taking shortcuts on security to launch quickly and acquire users. Instead, Polygon focuses on developing ZK technology that can provide both strong security and high scalability. Their approach includes offering a spectrum of data availability solutions, allowing developers to choose the appropriate level of security for their use case. By providing this flexibility while maintaining a foundation of cryptographic guarantees through the Aggregation Layer, Polygon aims to create an ecosystem that can scale to meet demand without compromising on the core principles of blockchain security.