What is Polygon 2.0

On June 13, 2023, Polygon Labs announced the launch of the Polygon 2.0 upgrade plan to help the Polygon PoS network evolve into a Layer2 network powered by zero-knowledge proof technology. Now, let’s take a look at the specific upgrades included in Polygon 2.0.

Polygon 2.0 Roadmap

According to the roadmap released by Polygon, the Polygon 2.0 upgrade will include four main components: Polygon PoS upgrade, technical architecture upgrade, tokenomics update, and governance mechanism upgrade.

Polygon 2.0 Roadmap

PoS Upgrade

The Polygon PoS network will upgrade to zkEVM Validium in Polygon 2.0, forming a complete Polygon ecosystem together with Polygon zkEVM.

zkEVM Validium

zkEVM Validium is a Layer2 scaling solution based on zero-knowledge proofs. It differs from the previous Polygon PoS in two main aspects:

Transaction Verification Mechanism

Polygon PoS network uses a Proof-of-Stake (PoS) consensus mechanism for transaction validation. Validators stake MATIC to verify transactions.

zkEVM Validium is based on zero-knowledge proof technology. Validators verify transactions through ZK proofs.

Data Availability

Polygon PoS stores transaction data on-chain. All transaction information is accessible on-chain at any time.

zkEVM Validium stores transaction data off-chain, not limited by blockchain space.

Polygon PoS vs. Polygon zkEVM Validium

Data availability is the key difference between zkEVM Validium and Polygon zkEVM. Compared to zkEVM Rollup, which inherits Ethereum’s security and stores transaction data on-chain, zkEVM Validium is slightly less secure but offers advantages in cost and scalability due to its off-chain data storage mechanism.

Based on current transaction data, the transaction cost for Polygon zkEVM is approximately 0.02 per transaction, with a TPS of around 2,000. After the upgrade, zkEVM Validium’s transaction cost will drop to 0.00005 per transaction. If referencing StarkEx’s Validium mode, TPS could potentially increase to about 9,000.

Polygon zkEVM vs. Polygon zkEVM Validium

Therefore, in the future Polygon ecosystem, these two networks will have different focuses:

Polygon zkEVM offers a high level of security. It is suitable for security-first applications such as DeFi.

Polygon zkEVM Validium has lower costs and higher scalability. It is suitable for high-volume, low-fee applications like Web3 games, social platforms, etc.

Protocol Architecture Upgrade

Polygon 2.0 has upgraded its protocol architecture, adopting a layered structure to maintain network operation. This architecture is divided into four layers, each responsible for different functions.

Staking Layer

Interoperability Layer

Execution Layer

Validation Layer

Polygon 2.0 Protocol Architecture

Staking Layer

The staking layer is based on PoS consensus and handles validator-related tasks. It mainly includes two key components: Validator Manager and Chain Manager.

Validator Manager

The Validator Manager manages all public validators within the Polygon ecosystem; it handles validator registration, stake tracking, executing stake/un-stake requests, reward distribution, etc.

Chain Manager

The Chain Manager is a smart contract deployed on each individual Polygon chain, responsible for managing validators on that chain. It manages parameters such as maximum/minimum validator count, penalty conditions, token types/amounts required for staking, etc.

Validators can stake tokens to become public validators in the Polygon ecosystem and participate as validators on multiple Polygon chains as needed. Validators primarily handle transaction ordering and validation, earning transaction fees and additional tokens as rewards.

Interoperability Layer

The interoperability layer manages cross-chain message passing within the Polygon 2.0 ecosystem.

Each Polygon chain has a message queue consisting of messages sent to other Polygon chains. Messages include content, target chain, target address, and metadata. Each message has a corresponding ZK proof. When the ZK proof for a specific message is verified, the target chain begins executing that transaction.

To reduce the cost of verifying ZK proofs on Ethereum, Polygon 2.0 plans to add an aggregator in the interoperability layer to aggregate multiple ZK proofs, reducing verification costs. Managed by Polygon’s public validator pool, this aggregator can combine multiple ZK proofs generated by the message queue into a single proof for submission and verification on Ethereum.

Execution Layer

The execution layer handles the actual execution of transactions. It enables each Polygon chain to generate ordered transactions and assists in transaction execution. This layer consists of various common blockchain components, including P2P, consensus, Mempool, databases, etc.

Validation Layer

The validation layer generates ZK proofs for each transaction (including cross-chain transactions) on Polygon chains and assists in constructing different types of VMs. It mainly includes three components:

Prover

Prover is a high-performance ZK proof generator supporting arbitrary transaction types. It offers efficient proof speeds to assist in transaction proof validation.

Custom zkVM

Custom zkVM is a modular virtual machine framework. It allows developers to easily build the required virtual machines through its interface.

VM

VM helps validators simulate proof execution environments and transaction formats. Simulation is generally implemented via VM Constructor. Currently, Polygon 2.0 includes two VMs: zkEVM and Miden VM.

Tokenomics Update

Polygon 2.0 plans to convert its native token MATIC into POL, serving as a unified utility token across the Polygon ecosystem.

The initial supply of POL will be 10 billion, migrated 1:1 from MATIC. MATIC holders will have four years or more to upgrade their tokens. Unlike the fixed supply of MATIC, POL will be inflationary over the next decade, with an annual inflation rate of 2%. This inflation rate can be adjusted later through governance.

The most notable feature of POL is its cross-chain interoperability. It can be used across all chains in the Polygon ecosystem. POL can verify transactions on different chains, connect various protocols, and promote the development of the Polygon ecosystem. Additionally, POL holders can become validators on multiple chains, helping maintain network security and earning rewards.

Token Utility

The main utilities of POL include four points:

Validator Staking

Validators in Polygon 2.0 are required to stake POL to participate in validation.

Validator Rewards

Polygon 2.0 will continuously provide validators with a predetermined amount of POL as rewards. The reward share can be increased or decreased through future community governance.

Governance

POL can be used for governance. Polygon 2.0 will establish a new community treasury managed by POL holders to support the development of the Polygon ecosystem.

Transaction Fees

Validators can validate multiple chains within the Polygon ecosystem and collect transaction fees paid in POL.

Governance Mechanism Upgrade

Polygon 2.0’s governance mechanism will be upgraded around three aspects: core protocol, system smart contracts, and community funds.

Core Protocol

Polygon 2.0 introduces the PIP (Polygon Improvement Proposal) framework for the core protocol. Similar to Ethereum’s EIP (Ethereum Improvement Proposal), this framework is mainly used to assist developers in proposing development and upgrade suggestions for the core components of the protocol.

System Smart Contracts

Polygon 2.0 has established an Ecosystem Committee responsible for upgrading system smart contracts. Decisions will be made through a token-holder governance model, with voting power proportional to the native token holdings.

Additionally, the Ecosystem Committee will launch a Dashboard to monitor contract upgrades.

Community Funds

Polygon 2.0 plans to establish an ecosystem fund to support promising Polygon ecosystem projects. It will also create a Community Treasury Committee responsible for fund allocation and related community governance work.

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