Polygon 2.0 Details Are Out! And the Team Has BIG Changes!

By Michael @ CryptoEQ | CryptoEQ | 14 Jul 2023

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Polygon 2.0 Design

Web3 has been grappling with a persistent scaling problem since its inception. The continuous addition of new chains to meet the demand for blockspace invariably leads to fragmented liquidity and a subpar user experience. Polygon 2.0 emerges as a solution to this problem, offering an elastically scalable, unified environment for accessing value, akin to how the Internet provides a scalable, unified environment for accessing information.

Polygon 2.0 is envisioned as an ecosystem of ZK Layer 2 chains based on Ethereum, referred to as "Polygon Chains". This structure is designed to improve both vertical and horizontal scalability, much like the layered structure of the Internet protocol suite. Polygon 2.0 comprises layers that perform different roles.

polygon 2 tech stack


Staking Layer

The Staking Layer is a Proof-of-Stake (PoS) based protocol that leverages Polygon's native token to provide decentralization to participating Polygon chains. It achieves this through a common, highly decentralized validator pool and an in-built restaking model.

polygon 2 tech stack 2 Source

The Staking Layer is responsible for all matters related to Polygon 2.0 validators. It exists on the Ethereum network as a smart contract. There are two types of smart contracts in this layer: the Validator Manager and the Chain Manager. The Validator Manager manages the pool of validators in the Polygon 2.0 ecosystem, including a list of all validators, which validators are participating in which Polygon Chains, their staking size, staking/unstaking requests, slashing, and more. The Chain Manager exists for each Polygon Chain and manages the list of validators, configurations for validating that chain, and more.

Validators can join the common validator pool in Polygon 2.0 by staking tokens and participate as validators on multiple Polygon Chains if they wish. They are responsible for ordering and validating users’ transactions to create blocks, as well as the proving process of generating Zero-Knowledge Proofs (ZKPs) and ensuring the availability of transaction data. Validators are compensated for their various roles with protocol rewards, transaction fees from participating Polygon Chains, and additional rewards from Polygon Chains (e.g., native tokens).

Interoperability Layer

The Interop Layer facilitates secure and seamless cross-chain messaging within the Polygon ecosystem. It abstracts the complexity of cross-chain communication and makes the whole Polygon network feel like a single chain to users. Every Polygon Chain manages Message Queues, which are messages sent to other Polygon Chains containing the content, the destination chain, the destination address, and metadata. Message Queues have a corresponding ZKP, and if the ZKP of a particular message is verified on Ethereum, the destination chain can safely perform this cross-chain transaction.

The Interoperability Layer also adds an Aggregator component that brings together multiple ZKPs generated by Message Queues in Polygon Chains and allows them to be validated cheaply on the Ethereum network. The Aggregator is managed by Polygon 2.0’s common validator pool to ensure decentralization for liveness guarantee and censorship resistance. This cross-chain interaction is designed to give users a "Unified Liquidity" experience, as transactions can be processed almost instantly and atomically, despite using multiple networks.

Execution Layer

The Execution Layer is where the actual computation takes place in Polygon Chains.It enables any Polygon chain to produce sequenced batches of transactions, also known as blocks. This protocol layer is relatively commoditized and is used in a similar format by most blockchain networks. It has components similar to a typical blockchain network (e.g., P2P communication, Consensus, Mempool, Database, etc.). Polygon Chains are highly customizable at the client level, including the native tokens, transaction fee flow, additional validator rewards, block time and size, checkpoint time (how often ZKPs are submitted), and rollup/validium selection.

Proving Layer

The Proving Layer is a highly performant, flexible ZK proving protocol. The Proving Layer is responsible for generating ZKPs for every transaction on Polygon Chains. The prover utilizes Plonky2, a technology developed by the Polygon team.

The novel design of the Proving Layer offers several major benefits, including efficient proof generation and verification, straightforward and efficient proof aggregation, implementation of different ZK state machines, and safe cross-chain communication between those state machines.

polygon 2 staking layer Source


Polygon also proposes an upgrade to their flagship scaling product, transitioning it into a zkEVM Validium. This unique approach stores data off-chain and uses validity proofs to ensure data integrity. This method reduces computational costs, making user interactions more cost-effective.

polygon PoS to validium transition Source

validium is nearly identical to a ZKR, with the only difference being data availability in a ZKR is on-chain (Ethereum L1), while Validiums store it off-chain for cost-reduction reasons. This means “true” ZK-rollups post data on the Ethereum mainnet itself while validiums post proofs on-chain, but the data remain on a separate network.

This benefit enables Validium to achieve considerably higher throughput than traditional rollups. By sending data off-chain rather than on-chain, it further reduces the cost of each transaction and increases the transactions per second (TPS). Validiums are the cheapest on a per-transaction basis in this spectrum.

Accessing the latest state in a validium requires that off-chain data be available. This is fine except in cases where the data provider misbehaves or goes offline. As a result, there are different DA guarantees and security tradeoffs associated with a validium. 

Polygon plans to leverage the existing POS chain validator list to disseminate transaction data across the entire 2.0 ecosystem. If successfully implemented, Polygon could be the pioneer in using a decentralized sequencer for ordering transactions on its solution, a significant achievement that rivals such as Arbitrum and Optimism have yet to attain.

In this model, the Ethereum smart contract serves as the "source of truth" for the state of the validium. The inclusion of validity proof-verification by Ethereum nodes significantly enhances security, allowing the network to leverage an economic stake of $40 billion and approximately 8000 individual validator nodes. This level of security is far superior to that of the original Proof-of-Stake (PoS) network.

In this enhanced security environment, it becomes nearly impossible for validators of the validium to misappropriate funds. Any transactions deemed malicious, resulting in invalid proofs, would be rejected by the verifiers. This change to the consensus mechanism provides a significant boost to the security of the network.

The bridge in the PoS network, which accepts a checkpoint if more than two-thirds of stake-weighted validator signatures are submitted and verified on Ethereum, also undergoes a transformation. With the upgrade, the bridge smart contract will require both the supermajority of signatures and the Zero-Knowledge (ZK) proof for all transactions added to the chain within that checkpoint. This change ensures that the security introduced by the zkEVM prover is strictly additive to the current security, not introducing additional security risks. Even if the zkEVM prover is not sound, the chain would be at least as secure as it is currently.

By keeping data off-chain, validiums also offer privacy benefits as users’ transaction and balance information is stored with the Validium operator instead of publicly on the blockchain. However, because transaction data isn’t published on-chain, users are forced to trust an operator to make the data available when needed. This key difference makes validiums more akin to a highly performant, custodial PoA system where Validium operators could freeze, but not steal, users' funds. 

Polygon's transformation to Polygon 2.0 aims to create a unified value layer where users feel like they are within a single ecosystem, even when they're operating between multiple chains. The combination of the zkEVM rollup and the zkEVM Validium working together on a unified layer of Polygon 2.0 could potentially offer a user experience similar to that of a Volition.

Volitions represent the "best of both worlds" of a rollup and a validium. Users can choose the level of security they want for their transactions. For high-value transactions, users could opt into the rollup mode and have the transaction data posted on Ethereum for higher security guarantees. This flexibility in choosing the level of security makes Volitions a promising development in the blockchain space.

$POL Token

Polygon Labs has proposed a new token for the Polygon ecosystem, POL. POL is designed to be the next-generation protocol token, aimed at coordinating and growing the Polygon ecosystem and driving the vision of the Value Layer for the Internet.

POL enables its holders to become validators and receive rewards, but with two significant improvements: Validators can validate multiple chains, and every chain can offer multiple roles (and corresponding rewards) to validators. This design aligns the Polygon ecosystem and fuels its growth while offering practically unlimited opportunities to POL holders.

POL introduces several benefits for the Polygon ecosystem. It provides ecosystem security through a highly decentralized pool of Proof-of-Stake (PoS) validators. It supports scalability, enabling the validator pool to scale to support thousands of Polygon chains without sacrificing security. POL also offers ecosystem support through a sustainable, in-protocol mechanism. Importantly, POL is designed in a way that does not introduce friction for users and developers.

The utility of POL revolves around validators, aligning and incentivizing them to perform useful work. Validators are required to stake POL to join the validator set. Once they stake POL, validators enter the validator pool and become eligible to subscribe to validate any Polygon chain. In return, validators can establish at least three incentive streams: Protocol rewards, transaction fees, and additional rewards.

The proposed parameters for the token include an initial supply of 10 billion POL tokens and a fixed yearly emission rate of 1% of the POL supply for validator rewards. This rate is set for a decade and can only be adjusted downwards through governance decisions, ensuring it will never exceed 1%. A similar 1% yearly emission is planned for a community-governed ecosystem fund, subject to the same limitations. Validators may have the opportunity to earn additional yield depending on the specific configurations of any Polygon chain integrated into the staking layer.

The initial parameters aim to ensure adequate ecosystem security, with a target minimum staking ratio of ~40%. They also aim to provide sufficient incentives for validators, with a minimum satisfactory return of ~5%, and adequate support for the ecosystem, with a minimum inflow of ~$50 million.

To ensure the future-proofing of the ecosystem, a continuous POL emission to fund the Community Treasury is proposed. A yearly emission rate is proposed for validator incentives and to fund the community treasury. This self-sustainable ecosystem fund can support protocol development, research, ecosystem grants, and adoption incentives. The Community Treasury will be governed by the Polygon community, via an agreed-upon governance process.

polygon 2 POL Source: Polygon 2.0 white paper

Transitioning from MATIC to POL

If the proposal is approved, the token migration from MATIC to POL would be a straightforward 1:1 exchange, with a generous grace period of at least four years for token holders. The upgrade from MATIC to POL will require a simple technical action – sending MATIC to the upgrade smart contract, which will automatically return the equivalent amount of POL. Token holders will be given ample time to upgrade.

Successful protocols not only address the problems they are created to tackle, they also grow and evolve together with the problem space. After more than a decade of collective development, blockchain protocols are now on the cusp of mass adoption. It’s only natural that token designs change to reflect the expanded mission and lessons learned along the way. That is what the new Polygon tokenomics aims to accomplish.

In conclusion, the proposed POL token is a significant step forward in the evolution of blockchain protocols. It provides a robust framework for the growth and development of the Polygon ecosystem, aligns and incentivizes validators, and ensures the future sustainability of the ecosystem. The upgrade from MATIC to POL is a testament to Polygon's commitment to continuous improvement and innovation in the blockchain space.

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Michael @ CryptoEQ
Michael @ CryptoEQ

I am a Co-Founder and Lead Analyst at CryptoEQ. Gain the market insights you need to grow your cryptocurrency portfolio. Our team's supportive and interactive approach helps you refine your crypto investing and trading strategies.


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