Messari: How 7 Scaling Products Build a Moat for Polygon?
The company is actively developing seven extension solutions, ranging from various ZK Rollups to sidechains, as well as software development kits (SDKs) and other engineering infrastructure.Source: Messari
Compiled by: DeFi Dao
Abstract:
- Polygon is a blockchain internet company focused on scaling Ethereum through Zero Knowledge technology combinations.
- The company is actively developing seven scaling solutions, ranging from various ZK Rollups to sidechains, as well as software development kits (SDKs) and other engineering infrastructure.
- With ZK-based scaling solutions launching in 2022, Polygon stands to benefit immensely from an ecosystem of over 7,000 dapps across DeFi, the metaverse, NFTs, and gaming.
- Polygon's corporate development strategy includes leveraging partnerships with venture funds, managing its own NFT/gaming ecosystem, and operating an internal investment fund responsible for identifying promising crypto projects.
- Upcoming milestones for Polygon include establishing more business partnerships with existing protocols and redesigning the MATIC token to better align with the company's future plans.
- Polygon's global Web3 ecosystem greatly benefits from India's thriving Web3 tech talent. Polygon provides developer training, collaborates with top universities like IIT, and conducts hackathons to expand the developer talent pool and incubate high-quality Web3 startups in India and abroad.
The crypto industry has made significant strides over the past two years. In the summer of 2020, DeFi primitives emerged during the so-called "DeFi Summer." The following year, NFTs began to gain popularity—first as profile pictures, then as community tokens, and now with revenue-generating use cases in music and gaming.
Naturally, interest in blockchain has surged alongside the influx of users. The total value locked (TVL) across the entire smart contract network rose from $500 million at the start of the pandemic to $170 billion two years later. More importantly, with growing interest in the metaverse, asset ownership, and unbanked banking, the growth of cryptocurrencies is expected to continue.
While investors have benefited from the maturation of cryptocurrencies, the industry's expansion has not been without growing pains. Notoriously, current blockchain infrastructure struggles to support user growth. Transaction throughput has slowed, and network fees have skyrocketed. Ethereum, in particular, has had difficulty handling the transaction load submitted to its blockchain. According to Etherscan, the average gas cost surged from 10 gwei in March 2020 to 60 gwei two years later—this does not even account for periods in 2021 when gas prices hovered around 150 or even 200 gwei, highlighting the need for improved infrastructure.
As a result, an emerging consensus among investors is the need for a cross-chain ecosystem. In other words, a single blockchain may not be sufficient to support everything users need. By distributing the workload across multiple entities, the total workload required by a single blockchain will decrease. If investors are correct, building a cross-chain world is the way to achieve the scale needed for the first billion users.
This report will focus on a major component of Ethereum's cross-chain scaling efforts: Polygon Technology. Key sections of this report include a company profile, a brief introduction to ZK Rollups, Polygon's project ecosystem, and the company's upcoming roadmap.
A Multi-Chain Ethereum World
Polygon Technology, widely known as Polygon, is building a suite of platforms for blockchain infrastructure, particularly for the Ethereum ecosystem. As the network expands its user and application base, its products are designed to support Ethereum's development. Notably, Polygon's particular focus on Ethereum reflects the company's core belief in the network as the future center of cross-chain paradigms.
From a broader perspective, Polygon is competing in what we should call the blockchain-as-a-service industry. Alongside competitors like Starkware, Arbitrum, Loopring, and Matter Labs, these startups are creating solutions aimed at enhancing blockchain scalability by increasing network throughput and reducing transaction costs.
Currently, there is no one-size-fits-all answer to blockchain scaling, meaning that each startup's solution—whether Optimistic Rollup, ZK Rollups, or other alternatives—has a place in the current ecosystem. This competitive research effort is what Polygon co-founder Mihailo Bjelic has previously referred to as a "blooming of a hundred flowers."
Founded in 2018, Polygon was a collaborative effort between Bjelic (who was experimenting with Plasma rollups) and Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, who had been focused on another scalable blockchain, Matic Network. At that time, this joint entity combined several products: (1) a blockchain SDK development framework developed by Bjelic and (2) Plasma rollups and Matic sidechains supported by the MATIC token. Unfortunately, blockchain researchers soon discovered data availability issues (which will be discussed further in the report), leading to Plasma being abandoned in favor of other solutions. This resulted in a period where the team focused on the Matic sidechain, the SDK framework (later renamed Edge), and sought the next steps for development.
Around February 2021, the team announced the rebranding of Matic Network to its current name, Polygon, and declared its strategic positioning as the cross-chain hub for Ethereum. Its new goal was to become a company offering a wide range of multi-chain services. Providing a suite of emerging products would become the new focus for the company, starting with the user-facing product that survived from the beginning: Matic Network, now renamed Polygon Proof-of-Stake (PoS).
First Product: Polygon PoS Sidechain
Users may already be familiar with Polygon PoS. This sidechain has been around for nearly two years. It launched before DeFi Summer and fully seized the opportunity when curiosity about decentralized applications exploded in May 2021.
Given the company's efforts around Layer 2 scaling, much work has been done on the technical classification of Polygon PoS. We believe it is an important distinction to qualify the current iteration of this PoS chain as a Layer 1 sidechain, primarily due to the fact that the Polygon network does not inherit security from Ethereum nodes and has its own set of validators. Regardless, for users seeking affordable transaction costs, this EVM-compatible network is a worthwhile option to explore; in fact, many of Ethereum's most popular DeFi platforms, such as Aave, Curve, and Uniswap, operate on this PoS chain, with the required gas costs being just a fraction of those on Ethereum.
The above image highlights the difference in average transaction costs between Polygon PoS and Ethereum. The data provided is staggering. The average cost on Polygon PoS is just a few cents, while users often pay $20 or more on Ethereum. If we assume that every transaction completed on this PoS chain over the past year had been conducted on Ethereum, users would have overpaid nearly $15 billion in total transaction costs.
Now, it is important to note that this data is influenced by the lower price of MATIC relative to ETH. If the displayed costs are adjusted to dollars, the absolute costs on this PoS chain are lower than on Ethereum, but the difference is not as pronounced when measured in gas prices. Nevertheless, this PoS chain remains a great option for users looking to avoid today's high costs on Ethereum. This is also a significant reason why the sidechain handles more daily transactions than Ethereum—reaching peaks four times higher than Ethereum—and has attracted over 1 million wallets to date.
Reaching these numbers is a milestone in itself, but some might argue that this is just an appetizer for Polygon's larger ambitions. As we have seen above, sidechains do not enhance blockchain scalability in the same way that rollups do as Layer 2 solutions. This is why Polygon is allocating its resources to Layer 2 scaling and ZK Rollups, aiming to find solutions that improve throughput and reduce the amount of gas required to conduct transactions. With leading technology and crypto-native investors choosing to take a seat at the negotiating table, Polygon's initiatives resonate throughout the industry. In fact, renowned investment firms such as Sequoia Capital India, Andreessen Horowitz (A16z), Tiger Global, Union Square Ventures (USV), and Galaxy Digital have all backed the company, indicating confidence in the team and alignment with the company's vision.
Polygon's roadmap includes the development of seven product solutions, from the aforementioned PoS sidechain to L2 Rollups and other blockchain infrastructure. Polygon has committed over $1 billion to acquire promising projects, invest in research, and create an Ethereum scaling ecosystem. Since a significant portion of Polygon's future is related to the adoption of ZK technology, it is essential to understand how it works before reading the rest of the report.
A Brief Introduction to ZK Rollups
ZK Rollups are one of the two main categories of Layer-2 rollups, alongside Optimistic rollups. The core idea behind ZK Rollups relies on cryptographic proofs to verify changes in the network state, which are then bundled into the Ethereum blockchain. Thus, ZK Rollups are referred to as "validity proofs." This sharply contrasts with Optimistic rollups, which "optimistically" assume that all transactions are correct and allow validators on the mainnet to check for fraudulent transactions over a period of time. Optimistic rollups are also known as "fraud proofs."
Let’s delve deeper into the mechanics behind ZK Rollups and explore why they are so promising. The fundamental premise of ZK Rollups is to allow third-party operators to batch transactions together rather than verifying each transaction individually—hence the "rollup" classification—to increase the total processing capacity of the network. Changes in the blockchain state are submitted to validators on the mainnet in the form of ZK proofs for verification. Due to the ZK properties, validators can be confident of the validity of all submitted transactions without having to run each individual transaction.
An important aspect of this process is the soundness of the proofs, which ensures that malicious provers cannot deceive validators with false statements. It is straightforward to infer this property for Rollup: if all batched transactions are to be accepted on the blockchain, they must be valid. Moreover, since the mainnet requires ZK verification for each transaction, there is virtually no need for interaction between the two chains, making gas fees cheaper and overall Rollup scaling easier.
Another core advantage of ZK Rollups is that the network can immediately verify transactions. Automatic verification brings many benefits to users. The simplest is the ability to transfer funds from the Rollup chain to the mainnet instantly, without having to wait for others to check for fraudulent data as with Optimistic rollups.
The technology behind ZK Rollups is promising, but it is worth mentioning that ZK Rollups have not yet lived up to expectations. This is an important caveat, as so far, ZK Rollups deployed on the Ethereum mainnet have not been fully compatible with EVM. This is why nearly all active Rollups to date have used fraud proofs. However, some research initiatives are nearing completion, with some EVM-compatible ZK Rollups running on testnets in the first half of 2022, including those owned by Polygon. At the risk of sounding like a record-breaking announcement, the long-awaited day seems to be approaching.
Polygon's Product Stack
Polygon's product suite includes the aforementioned PoS sidechain and six ZK-supported projects. Among these six, three (Hermez, Miden, and Zero) are direct ZK Rollups, another (Nightfall) is a privacy-enabled Optimistic rollup using ZK cryptography, and the remaining two (Avail and Edge) are designed to help build ZK and modular infrastructure. The following diagram lists the complete product suite and categorizes each product suite based on shared Ethereum security. Low-security products are akin to independent chains with their own validators, while high-shared security products are complete Layer 2 Rollups that rely entirely on Ethereum. In the next section, we will introduce each product starting with the four ZK Rollups.
1) Polygon Hermez: Decentralized and Active
In August 2021, Polygon announced the acquisition of Hermez for $250 million, one of the largest blockchain network mergers to date. The deal was financed through the Polygon native MATIC tokens in the company's token treasury. Previous holders of the Hermez native token (HEZ) were able to exchange their tokens for MATIC at a rate of 3.5 MATIC tokens for 1 HEZ token. The result of the acquisition means that Polygon will be responsible for the newly formed entity, Polygon Hermez.
Among the four ZK Rollups in the Polygon suite, Polygon Hermez is the most actively used. It is the first open-source decentralized ZK Rollup running on the Ethereum mainnet (although it is not ZK EVM compatible) and has been open to the public since March 2021. Users can deploy funds into the rollup network and quickly and cheaply send funds between wallets as transfers and payments. Polygon Hermez can process up to 2,000 transactions per second, and this number is expected to increase further when Ethereum implements sharding sometime in 2023 after The Merge. Regardless, the product currently reduces transaction costs by over 90% compared to general mainnet gas fees.
Like Polygon's other ZK Rollup products, Hermez has its own research focus. Hermez places a high value on decentralization. It is the only active Layer 2 that does not require centralized operators. While the centralization resulting from the use of decentralized sequencers may seem trivial, especially in the early stages of ZK Rollups, the long-term implications could be significant. As the Polygon team has cited, the transition from centralized operators to decentralized operators may face operational and technical challenges, giving Polygon Hermez a competitive edge.
Polygon Hermez will soon release Polygon Hermez 2.0, a future iteration that combines the existing ZK Rollup with ZK EVM implementation. The demand for the latter is crucial for scaling Ethereum, as non-ZK EVM Rollups can only handle token payments and transfers. A blockchain enabled with ZK EVM will allow the network to directly process smart contracts on the rollup, opening up another avenue for innovation. The final product is expected to closely mimic the 50-70 instruction codes available on the original EVM. The decision to stick with opcode similar to machine language allows engineers to port existing applications to the Rollup or easily create new applications when needed.
A testnet is expected to be released sometime in the next three months (Q2 2022). Once testing is complete, a full release of Polygon Hermez 2.0 is anticipated to come sometime in the next quarter. If this timeline holds, ZK Rollup enthusiasts will have the opportunity to witness the formation of this scaling option.
2) Polygon Zero: All About Speed
Polygon Zero is the successor to Mir Protocol, a decentralized application project powered by recursive ZK proofs. In December 2021, Polygon announced the acquisition of the Mir Protocol team, seeking to combine the Mir project with synergies from Polygon's other technology stack. This deal was even larger than the acquisition of Hermez, with an announced price of approximately $400 million, funded by cash and Polygon's MATIC tokens.
As part of the Polygon ecosystem, the Mir team's goal has remained consistent: to build the fastest ZK Rollup in the world. Unlike Polygon Hermez, which allocates most of its research resources to decentralization, Polygon Zero's goal is speed. The best solution discovered to date is through scalable ZK-SNARKs, also known as recursive proofs.
Recursive ZK proofs accelerate speed by increasing the number of transactions that can be processed at any given time. We can make a comparison here: existing ZK Rollups typically require significant computational resources to generate proofs for batches with a large number of transactions; this is true for ZK Rollups that need to support general applications, especially those slowed down by the need for EVM compatibility. In contrast, efficient recursive ZK proofs allow processing to be distributed into more manageable concurrent work blocks. Once each transaction is verified, the recursive algorithm traverses and aggregates all proofs until they ultimately form a single proof. The best way to visualize this is to use a pyramid shape, where the base layer represents all transactions. As each transaction is proven, it is sent upward until they all reach the peak at the top. The final proof can be sent to the mainnet faster and more cost-effectively than current alternatives.
Polygon Zero achieves this through Plonky2. Plonky2 is a recursive ZK proof generator capable of generating a SNARK proof every 0.17 seconds, making Plonky2 the fastest recursive ZK prover in the world.
Inventing this technology required years of research. The practical applications of recursive zero-knowledge proofs began in 2014. In 2019, generating each recursive proof took two minutes. The slow proof generation clearly rendered the technology useless for blockchain scaling. In 2020, the development of Plonky combined with several other technologies reduced the time to 15 seconds. Plonky2 further reduced the time to 170 milliseconds, making it the fastest recursive ZK prover in the world.
That said, further research is needed before Plonky2 goes live. A timeline has not yet been announced, but as breakthroughs with other provers are achieved, the Polygon team will provide more information.
3) Polygon Miden: STARK Not SNARK
Polygon's next ZK Rollup is Miden. Unlike most ZK Rollups that use ZK-SNARKs, Miden employs another proof called ZK-STARKs. STARK stands for "Scalable Transparent Argument of Knowledge," while SNARK stands for "Succinct Non-interactive Argument of Knowledge." Given that the names SNARK and STARK are very similar, it is not surprising that there are similarities between the two. At their core, both are privacy and scalability technologies that provide applications with the ability to verify proofs at a more secure and faster pace.
Their differences lie in the details. STARKs traditionally do not require an initial setup process between the prover and the verifier, although some modern SNARKs have also found ways to eliminate this process. What SNARKs cannot match is the ability to cope with quantum computing threats: SNARKs are vulnerable to quantum attacks, while the more streamlined cryptographic functions used by STARKs have proven to be quantum-safe.
The trade-off for using STARKs is the need for larger proofs, leading to higher gas costs and a lack of recursion. Implementing the latter may be possible, but it has not yet been confirmed. Further research into SNARKs and STARKs will continue to open new doors for Layer 2 proofs.
As shown in the diagram below, the transaction Rollup process is similar to traditional ZK Rollups, replacing the usual SNARK with STARK.
Miden's advantage lies in creating an EVM-compatible ZK-STARK with the Miden VM. The Miden VM is a general-purpose ZK virtual machine that allows developers to leverage the platform's full Turing-complete capabilities. Additionally, it provides multi-language support for developers. These languages, including Solidity, Move, and Vyper, are compiled into Miden assembly language for the VM to read.
The development of Miden VM began in 2019 as a library called genSTARK, which allowed developers to create simple STARK provers. Distaff VM (an early STARK-based VM) and Winterfell (an upgraded iteration of genSTARK) continued to improve, such as achieving full Turing completeness. The current iteration of Miden VM is a public v0.1 prototype that combines the features of Distaff VM and Winterfell, launched in November 2021. Developers interested in building with the new virtual machine can experiment with the product's capabilities. A v0.2 prototype is expected to be released in Q2 2022. Testnet development should carry the project through the end of the year, with mainnet deployment anticipated sometime in 2023.
As mentioned in the introduction to ZK Rollups, ZK Rollups do not provide privacy by default. This is where Polygon Nightfall comes into play. Nightfall is an Optimistic rollup enhanced by the privacy advantages of ZK cryptography. Here, the type of ZK cryptography used in Nightfall differs slightly from that used in general ZK Rollups; the former is used to facilitate data privacy, while the latter is used for transaction verification. The idea behind ZK cryptography and the anti-fraud Rollup stems from the need to provide enterprises with differentiated products that retain the privacy elements of ZK cryptography while maintaining low transaction costs.
4) Polygon Nightfall: Enterprise Privacy
Nightfall was initially created by one of the Big Four auditing firms, EY, in 2019 as a way to conduct private transactions on Ethereum. This was a significant milestone as it marked the first active involvement of large enterprises in the development of Ethereum. In the following years, as the demand for privacy-focused secure blockchains grew, EY began seeking partners to help expand the product's scope. The result was Polygon Nightfall, a collaboration between EY and Polygon aimed at creating a public-facing privacy-focused Rollup, making it an ideal choice for enterprises.
Enterprise transactions and operational tools benefit the most from such privacy features. Nightfall will also be legitimate and compliant with KYC standards. The goal of the collaboration is to create a whitelist of companies that can access the network; when enterprises conduct transactions, they need to provide evidence of access confirmation before the privacy-secure transaction is completed.
EY's enterprise clients can already connect to Polygon Nightfall through EY's front-end portal. Nightfall is currently exploring further ways to expand the product. A specific timeline for the roadmap has not yet been set, but both EY and Polygon hope to continue collaborating with other enterprise-specific blockchains.
5) Polygon Avail: Ethereum Data Availability
Polygon Avail is the first of Polygon's two major architectural products. Avail aims to address the challenges nodes face when processing malicious or incomplete data. In the blockchain world, these challenges are referred to as data availability issues, which were mentioned earlier as the reason researchers abandoned Plasma rollup plans. Common scenarios for this issue include nodes accepting blocks with incomplete data or nodes being unable to verify the accuracy of transaction data on the network (i.e., blockchain censorship).
Polygon describes Avail as a solution to data availability issues across the multi-chain Ethereum ecosystem. Avail is a data availability-specific blockchain designed for independent chains, sidechains, and other scaling technologies—meaning the entire Avail chain is intended to store Ethereum's "call data" tracking changes to the Ethereum state machine. Smart contracts will not be deployed on Avail, nor will applications be built. Instead, the entire purpose of Avail is to sort and store data to ensure that it remains accessible through a sampling process executed by light client nodes.
Compared to current blockchain architectures, the Avail network will focus on ensuring the publication of complete transaction data rather than verifying state changes. Unlike full nodes, light nodes do not download the entire block data but prioritize randomly sampling a set of data from each block to assess integrity. This process is known as data availability checking. This is a technique shared by other data availability platforms, allowing it to be completed at a constant resource cost regardless of data size.
In its final form, Polygon envisions a scenario where developers can create their own independent PoS chains and outsource network security to Avail. Operators on independent chains would send transactions to Avail for sorting and storage. This helps to immediately guide network security, as complete transaction data is stored off-chain for easy access.
Avail is still under development, and the Polygon team has not announced key roadmap dates.
6) Polygon Edge: Developer-Centric
Polygon Edge, previously known as Polygon SDK, is an open-source modular blockchain development framework built for engineers looking to create their own blockchains. The framework allows for the creation of secure chains (Layer 2 blockchains) and independent Ethereum sidechains.
Both options have their advantages. Secure chains offer two unique features: easy onboarding for resource-limited individuals and enhanced security on a layer separate from the mainnet. New crypto protocols without the resources to bootstrap security or enterprises looking to increase transaction throughput on their own networks may wish to leverage the Edge framework to build secure chains. Meanwhile, sidechains require their own set of validators, making them ideal for enterprises seeking maximum independence or community-based networks capable of supporting their own decentralized blockchains.
The above diagram represents the various components of the development framework. Each component, including known modules like blockchain and consensus, as well as more obscure modules like Libp2p, GPRC, and JSON RPC, represents functionality within the technical architecture. Developers can modify these modules to meet their needs, combining them like building blocks to form a network. Polygon Edge supports both Proof-of-Stake (PoS) and Proof-of-Authority (PoA) as consensus algorithms.
The independent chain framework of Edge began rolling out in May 2021. A second iteration of the secure chain framework is expected to follow shortly. Products like Polygon Edge align closely with Polygon's argument for a more advanced multi-chain Ethereum ecosystem, helping to address the urgent need for L2 communication and streamlined project deployment.
Polygon Enterprise Fund
As mentioned earlier, the company is also actively encouraging protocols to utilize networks supported by Polygon. Direct strategies include investing in founding teams, supporting project token economics, staking, governance, and leveraging the Polygon network for marketing activities.
Ecosystem Partnerships
A strategic effort for Polygon is to collaborate with active venture capitalists within the crypto community. Polygon maintains relationships with four organizations, although the company does not have decision-making authority over investment capital.
- Polygon x Wintermute: Collaborating with a $20 million fund to support project liquidity, business development, and token exchange listings.
- Polygon x 776: Partnering with a $200 million general fund investing in Web3 and other crypto-native applications.
- Polygon x Outlier Ventures: An accelerator based on Polygon aimed at facilitating guidance and collaboration with the Outlier Ventures venture team.
- Polygon x StableNode: Collaborating with a blockchain node management operator experienced in providing staking, governance, and other practical services.
Polygon Ecosystem Fund
The company's ultimate corporate development team is its ecosystem fund. Unlike the partnerships mentioned above, this ecosystem fund is Polygon's own internal investment fund. The strategic design of capital allocation decisions aims to promote the adoption of the Polygon blockchain.
This $100 million ecosystem fund manages all of Polygon's corporate investments. This includes joint investments with the Polygon Studios team below. To date, the fund has spent $15 million on 50 global projects. The team is still actively seeking investment opportunities.
Polygon Studios
In the summer of 2021, Polygon launched Polygon Studios, its internal department aimed at attracting existing gamers to blockchain gaming. Polygon Studios collaborates with ambitious NFT projects and marketplaces to expand user bases on low-cost platforms.
Over 100,000 gamers and more than 500 applications have joined. The team has announced partnerships with crypto-native projects like The Sandbox, Decentraland, and OpenSea, as well as traditional entertainment brands like DraftKings, Electronic Arts, and Atari. Funds from the ecosystem fund will also be used to invest in projects that benefit the company's NFT/gaming initiatives.
Leading Polygon Studios is Ryan Wyatt, who left his previous position at Google, where he served as Head of Gaming Partnerships and Head of YouTube Gaming. Wyatt began his career in professional esports as a gaming commentator, giving him a unique qualification to lead the work at Polygon Studios.
Leadership in the Community
In addition to its reputation in the global crypto community, it is essential to highlight Polygon's role within the Indian crypto community. The company's status as an Indian startup unicorn helps validate the industry in the eyes of skeptics and encourages more young people in the country to try cryptocurrencies. Given the Indian government's fluctuating relationship with the industry, this form of leading by example is particularly beneficial for the country's thriving ecosystem.
Polygon has also played an active role in investing in its community. Polygon frequently sponsors, mentors, and judges hackathons in India. It is closely associated with ETHIndia. Additionally, the company collaborates with students to offer smart contract application engineering courses and works with several IIT institutions, IT Mumbai, and other select blockchain clubs at Indian universities.
To illustrate Polygon's status as a financial platform, we can compare the company's valuation to that of India's largest banks. By this measure, Polygon would become the seventh-largest financial institution. Of course, this type of analysis comes with some major caveats. On one hand, Polygon does not provide direct financial services, operating more as a financial payment platform. Additionally, the startup's ecosystem includes indirect financial use cases, such as NFTs and blockchain gaming. That said, this quick and simple comparison does highlight the speed of Polygon's rise and the level of expectations investors have for the company's forward momentum.
Roadmap
Much of the work for the Polygon team in the coming years will focus on enterprise rather than technology, which may indicate how satisfied the team is with the state of its product suite. As each product continues to research, test, or launch its scaling solutions, there will be a greater emphasis on finding suitable partners and protocols to integrate into Polygon's product network.
In public interviews, Polygon has expressed interest in restructuring the company's team structure and expanding partnerships with crypto projects, particularly in the NFT and gaming sectors. The number of employees is also expected to continue to grow, with a goal of doubling the workforce by the end of the year. While the exact details of each team organization remain unclear, it is worth noting that Polygon aims to concentrate key leadership while maintaining decentralized autonomy for each team.
One of the most exciting updates for investors will be the token redesign. The current MATIC token is a relic of the old Matic business, used alongside the Matic network Polygon PoS. The future token will have a new code and will be applicable to all Polygon products. Given what we know today, use cases may include staking to enhance security or selecting blockchain operators. Interestingly, the token will not be mandatory for all users, meaning there is no requirement to purchase, stake, or hold it; for many users, it may simply be something in the background. While the timeline remains unclear, Bjelic has indicated a desire to complete the token redesign sometime in 2022.
Conclusion
The coming years will see fierce competition in the blockchain space. The ultimate winners will be determined by which offers the best usability, transaction speed, and transaction costs. The next phase of blockchain development means that core infrastructure is now more important than ever. Users around the world need a network capable of rivaling Visa and Mastercard, one that can handle thousands of transactions per second.
Polygon is striving to meet this demand through its suite of Rollup solutions. Its aggressive growth strategy in 2021, through acquisitions and joining various ZK projects, now ensures that Polygon's portfolio offers something for everyone. If users want faster or more private transactions, they can choose Hermez, Miden, or Zero; if enterprises are seeking privacy, then Nightfall is the answer; if developers are looking for scaling solutions, Avail can alleviate data availability burdens, while Edge helps build entirely new blockchains.
This suite of products provides Polygon with an important moat. As long as it can attract projects to its platform, Polygon will continue to maintain its position as a major player in the industry for years to come.
