What is Polygon 2.0?

In this article, we are going to be breaking down Polygon’s exciting new roadmap for Polygon 2.0, which is their so-called “endgame,” which I am sure you would not want to miss. It may all be a bit complex at first, so make sure to pay close attention.

Polygon Basics

Now, if you are new to all this, let’s start with the basics. The original Polygon POS blockchain, formerly known as Matic Network, launched in 2017 as an Ethereum sidechain which serves to increase the scalability of the Ethereum Mainnet.

Similar to Ethereum, it uses a proof-of-stake consensus mechanism for processing transactions on-chain and currently uses MATIC as its native token. In March 2023, they also launched another Layer-2 chain, which is the Polygon zkEVM, an Ethereum zk-Rollup.

In June 2023, the announcement of Polygon 2.0 detailed the next phase in Polygon’s evolution. Polygon 2.0 is envisioned to be a vast network of ZK-powered Layer-2 chains with unlimited scalability and seamless interoperability.

The goal is to create the “Value Layer” of the internet, where you can safely and seamlessly exchange digital assets just as the internet enables the exchange of information.

Soon after this announcement, the Polygon team began a discussion around upgrading the Polygon POS chain to a zkEVM Validium.

A Validium is simply another type of scaling solution for Ethereum. Note that this is different from the Polygon zkEVM chain, a zk-Rollup which will continue to coexist as a public network in the Polygon 2.0 ecosystem.

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Going back, you might be asking, “What’s the difference between a Rollup and a Validium?”

While zk-powered validiums submit validity zk-proofs to Layer 1, they do not publish transaction data onchain like zk-rollups. Instead this data is made available off-chain, giving validiums the advantage of being lower cost while offering higher scalability since its throughput is not limited by the amount of transaction data that Ethereum can store.

The upgrade of Polygon POS to a zkEVM validium is not only to enable it to inherit higher security and scalability, but also to fit the OG chain, which has gained significant adoption over the last few years, into the larger zk-powered Polygon ecosystem of the future.

So, now there’s the Polygon POS chain, which will be upgraded to a zkEVM validium and the Polygon zkEVM chain and those are two chains. So where does the “network of zk-powered Layer 2 chains” come into the picture?

Well, that’s where the Polygon Chain Development Kit (CDK) comes into play.

Polygon CDK was introduced by the Polygon team in August 2023. It is an open-source, modular codebase that anyone can use to launch their own customizable zk-powered Layer-2 on Ethereum.

This is actually an evolution from their previous “Polygon Supernets” vision which was announced in April 2022, which simply served the same purposes but was not powered by zk-technology.

The implementation and adoption of the Polygon CDK will transform Polygon into a super of ZK networks, working as an interoperable system and exchanging valuable resources via a shared bridge.

Aside from the Polygon CDK and the theoretically unlimited chains it enables, there is also another upcoming chain called Polygon Miden. This is a zk-Rollup running on the Miden Virtual Machine which will prioritize zk-friendliness over EVM-compatibility, and where builders can write and deploy dApps.

To bring all these different working parts of a future Polygon 2.0 ecosystem together, a number of significant technical upgrades to the existing network are necessary from protocol design, to tokenomics and governance.

Polygon 2.0’s Four Layers

At the protocol level, Polygon 2.0 will implement four layers that operate together to deliver a compact system of networks with mutual communication. These four layers are the:

• Staking Layer;
• Interop or Interoperability Layer /Agg Layer;
• Execution Layer; and
• Proving Layer.

1. Staking Layer

First up is the staking layer. This is where Polygon’s native token will be staked to provide security and decentralization to all Polygon chains. Tasks like:

• Maintaining the validator registry
• Processing staking/unstaking requests; and
• Slashing

These 3 tasks are happening on this layer. Additionally, every Polygon chain can also customize their desired level of decentralization by specifying the required number of validators.

Each chain even opts to define any additional requirements, rewards, or specific slashing conditions for validators.

2. Interop Layer

Next, the interop layer will facilitate secure and seamless cross-chain messaging within the Polygon ecosystem. Users will feel like the whole Polygon network is a single chain, for example with near-instant bridging and shared access to native Ethereum assets. That is to say, there is no need for synthetic or wrapped tokens on different chains.

3. Execution Layer

The Execution layer enables any Polygon chain to sequence transactions from the Mempool and to produce blocks, similar to how transactions are processed in networks like Ethereum and Bitcoin.

4. Proving Layer

Lastly is the Proving layer which is a flexible, high performing zk-proving protocol. It is in charge of efficiently generating and aggregating proofs for all executed transactions across all Polygon chains.

POL Token

Aside from protocol architecture upgrades, there is also brand-new tokenomics to be implemented, which is where the new POL token comes into play. POL token contracts went live on the Ethereum Mainnet on 25th October signifying a major milestone.

So what does this mean for Polygon’s current MATIC token? POL is set to power the Polygon 2.0 ecosystem, eventually taking over MATIC’s role as the native token of Polygon.

It is going to be used for governance, gas, staking, and other utilities as the Polygon ecosystem continues to develop.

The POL token will be a key component in powering the security of all the chains that operate under the Polygon supernet structure, which the team calls a third-generation “hyperproductive token” which supersedes Bitcoin, a non-productive asset, and Ethereum, a productive asset.

This is because validators on the Polygon network can also validate and earn transaction fees from any Polygon chain and earn extra rewards depending on the specific plans of the network they validate.

According to the POL whitepaper, the initial supply of POL is 10 billion tokens meant for the migration of MATIC to POL at a 1:1 swap in order to ensure the success of POL as the new native token.

After the initial supply, POL tokens will be released at a predefined rate of 2% per year for 10 years. After which, it can be decreased through governance if desired. Out of this 2%, 1% goes toward incentivizing and retaining validators, and the other 1% toward supporting the development of the Polygon ecosystem.

This team believes that after 10 years, transaction fees and other incentives will be enough to generate a return for validators.

Reimagined Governance Framework

Finally, the last component of Polygon 2.0 is the reimagined governance framework, which will be separated into three main pillars with differing governance models:

• Protocol Governance — which related to the decentralized maintenance and development of the Polygon technology stack;
• System Smart Contracts Governance — related to upgrades of protocol components which are smart contracts; and
• Community Treasury Governance — which concerns ecosystem growth and public goods funding.

It is worth noting that not all of this is currently set in stone, with possible changes to be made based on ongoing discussions with Polygon validators, users, developers and other ecosystem participants.

It looks like Polygon has quite the journey ahead to Polygon 2.0 but we are excited to see what’s next.

If you want to know more about Polygon’s role in Ethereum scaling, be sure to check out our other articles tackling the intrinsic sides of the Polygon MATIC.

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