The State of Polygon - TOKEN2049 Singapore 2023

Hello everyone. Great presentation from Ed. Always big fans of what Arbitrum guys are doing in the optimistic roll-up space. My presentation today is about the state of Polygon and the biggest thing that is going on in the Polygon ecosystem is Polygon 2.0.

So, I'm going to talk about some of these things. Especially like as you all know that Polygon in the in in in 2021 we you know took a very deep bet on the ZK ecosystem and we you know kind of allocated like a billion dollars in our treasury for ZK and you know we were able to onboard some of the best ZK talent in the space. You know yesterday somebody was joking into me that you know they are looking for some ZK researchers but they can't find one because most of the good ones work at Polygon. So, you know in ZK we've been doing some amazing work and many of you guys know that we have we were we we have the most advanced you know the first ZK EVM fully audited fully mature on-chain verifiable you know ZK EVM which is there and then you know users are testing it it has hundreds of thousands of you know addresses who have interacted with us around 40 to 50,000 smart contracts still very early days in the ZK EVM's growth you know curve but we are like slowly getting ready for explosive growth on ZK EVM and you know DeFi is constantly growing over there and as you know that you know with ZK rollups, they have fast you know withdrawal times and you know now the proving you know optimizations due to proving optimizations of polygon, you know, the cost of proving ZK the transactions in ZK is also super cheap. So, you know, very soon you're going to have like I mean you already have this layer two but at a much higher liquid you know liquidity you know kind of in the ecosystem where you can actually deposit from ethereum and withdraw your funds back in 30 minutes or less and and you know having a full-blown ZK roll up for you guys.

You know, we are constantly optimizing for the performance and everything and testing. There have been some mass campaigns on ZK EVM and it's slowly getting ready for the for the prime time. Many of the people who are you know active into the ZK research space you know about Plonky2. Plonky2 is the you know is our fastest library for the ZK generating ZK proofs. We are already working on Plonky3.

Plonky2 was basically around 100 to 1000 times faster than any other competitor available in the market and so much so that many of you guys might have seen that a lot of other you know our competitors in the ZK space or not competitors like people who are building in the you know ZK ecosystem are like now actually copying our approach or directly taking the code because it's open source. Anybody can take it but point being that we keep continue to lead the ZK development at our end and then many of you guys might also know about the Miden roll up that we are working. Ed was talking about Stylus amazing product where you can have you know these C++ or Rust and different kind of languages on the top on top of Ethereum as a layer two. Polygon Miden is our you know approach where it's a custom VM, much faster, doesn't have the state bloat issues of EVM and all that all those things. Privacy like not like, you know, immediate privacy but the road map with which it can add privacy in the in the coming days, client side competition, so many amazing and you know kind of sci-fi things that we used to think about the about the blockchains.

These will be made available with Miden. So, that's like little bit about the the ZK side of Polygon. But then, you know, let's talk about Polygon 2.0. Like why we are calling like you know we're talking about Polygon 2.

0 so much and why you know this is such a big thing. You know, I want to I want to talk about Polygon 2.0 by talking about web two world today. If you see the web two world today, it has two critical uh you know, properties why we have this internet which has taken over the whole globe. First, that, you know, it has infinite practically infinite scale scalability.

Like more applications come into the space, you can spin up more and more servers, you can you can, you know, have more and more applications. There's no bound nation. Nobody is stopping us that hey, we don't have the bandwidth. Don't launch more more applications, more mobile apps, more web apps, right? So, it's infinite infinitely scalable practically.

Unlimited scalability, you can say. And the second thing is this current web two is more like the internet of information, right? And as you see that with the current internet, the web two world, we can create like I am we are speaking here, we are together in this conference, and this conference might be broadcasted all across the world. We don't have to think about like oh, we are generating this information in Singapore and how do we broadcast it to the US? We have to go to the US internet.

Like nobody's doing that. But if you see the Web3 world, this is the scenario. Like I am on Ethereum. If I want to do something on other chain, I have to deposit my funds. I go there.

So, this seamlessness is not there in value because Web3 is the internet of value. The way Web2 is internet of information, Web3 is this internet of value. And for this Web3 to really glow really grow at the global level, you need these two capab bilities. So, that first, infinite and unlimited scalability, unbounded scalability, and unified liquidity for the value. Like value should not be like, you know, you have 100 chains and the value is distributed across those chains.

They cannot interrupt. So, that is why the whole vision of Polygon 2.0. I'll talk about that that how, you know, it works. But the vision is unlimited scalability and unified liquidity.

How do we achieve that with Polygon 2.0? So, essentially what we are building is this value layer of internet. I will show you like, you know, currently as I said that if you are building any kind of app chain or public chain, it kind of because we are seeing a hyper blockchainization of world with all these blockchain stacks and whatnot. And the liquidity and the end user interactions are getting fragmented.

How do you bring them all back is basically is is our, you know, proposal or kind of architecture of Polygon 2.0 that we have said. What you can do here is we recently launched Polygon CDK. Now, Polygon CDK is the culmination of all of our open-source technologies. We have packaged them into this CDK or stack, whatever you want to call it.

And today the state is that you can use a implementation partner like Gateway. Yesterday they announced you can spin up your ZK roll-up, fully functional, fully provable, and Ethereum-secured ZK roll-up in a matter of 7 to 10 minutes. What it means is if even if I am a college dorm student and I I to launch my startup in Web3, I can spin up my my uh ZK roll up chain in a matter of 7 to 10 minutes. It's almost equivalent to I am spinning up my servers on AWS. So, as many people as many applications want their own block space, and this is also dedicated block space, they can spin up these chains.

But, when you spin up so many number of these chains, like 10s or 1,000s of chains, you know, in future, how do you make sure that this value, just like I talked about the information is seamless around a whole whole internet, like how the value can be seamless across these chains, is we have introduced this aggregator layer or interop layer, you can call it. What How it works is that all these chains are ZK proven. They submit their proof into one common layer. Right now, we, you know, this common layer will be on Ethereum only. So, all these chains submit their, uh you know, proofs to the Ethereum layer, and the moment those proofs proofs are submitted on Ethereum layer, we have a mechanism where we, you know, have a global state root on the on Ethereum, and then any kind of liquidity can move across the chain without coming to Ethereum.

Like, right now, for a simple example, anyone of you uses, uh like layer 2s or any other thing, if you are on a particular layer 2 chain, and you want to go to another layer 2 chain trustlessly without using a third-party bridge, because obviously we know so many problems have happened in the third-party bridges, what I need to do is I need to, you know, withdraw my funds to Ethereum and then deposit into the other chain, right? But, with this kind of aggregation layer, with the ZK proofs, your liquidity can move from one chain to another without coming to Ethereum. Once the chain submits the ZK proof, you can take the funds to the other side. This is the current state of affairs. This is what is going to be available in like a matter of 4 to 8 weeks, this kind of interoperability.

This interoperability is also a little bit slow, because all the chains are going to are submitting the ZK proofs to Ethereum, which is costly. So, any every chain can only submit like maybe 30 minutes, right? So, you have roughly 30 minutes of interoperability here. And obviously, with the ZK proofs, you can have cross-chain transactions and you know, cross-chain smart contract interactions also. But, in next, you know, two quarters or so, we are going to announce we are going to launch this aggregation layer.

This aggregation layer is a fast aggregation layer. You can imagine this layer as a separate layer, which is combining all the proofs from all these chains because, you know, I mentioned about the Plonky2. So, the aggregation layer, which is Plonky2, is essentially recursive ZK proving you know, technology, wherein all these chains submit their ZK proofs. They get recursively combined into one single proof, and that one single proof goes to Ethereum. So, instead of all of these chains submitting their proofs to Ethereum, which is very costly, they can submit the proof to this aggregation layer much faster.

Let's say, 10 seconds, 20 seconds, or even 30 seconds, like, you know. And our goal is that this proof proving will eventually go down to like probably 2 seconds. So, every chain is submitting a proof of whatever has happened on their ecosystem or on their chain every 2 seconds to this aggregator layer. The moment you have a aggregate the moment you have a ZK proof, all the chains can see that there is a ZK proof. And it's a mathematical hard proof.

Nobody then needs to trust that what kind of chain is that, like, chain as I is it chain one, chain two, chain three? If there is a chain five, I don't need to trust the chain five, whether it's a it's it's run by 100,000 validators, whether it is run by some large institutions, or it is run by a college dorm student, which is doing a startup. I don't need to trust the chain. I just trust the mathematics. I just trust the cryptography, which is the ZK proof.

The moment I receive a ZK proof, and there is a cross-chain transaction coming in to my chain, let's say, I am on chain number I'm running chain number two and the moment there is ZK proof is submitted across chain transaction from chain number five comes. I can see that this transaction is a part of this ZK proof. That means this chain till this transaction which is being submitted to me as a cross chain is working fine. And when these chains are submitting at a very high speed like two seconds to three seconds now you can have a cross chain transaction getting executed in four to five seconds which is almost like you know I mean one third of Ethereum block time. So with this poly with polygon 2.

0 all these chains and this block space will more and more in the coming days as technology and this middleware a lot of applications we invite lot of middleware builders and this like you know if you are building your startups in crypto this could be a very big opportunity where these cross chains the chains are going to be there and then but for all these cross chain interactions you need these services and those kind of services those protocols can be built on top of it. And once you know this technology and these protocols mature more and more you will see that all of these chains whether there are 10 chains 100 chains 1000 chains they start feeling like one single big block space and this chain whole chain like we don't call it a chain we call it like the value layer of internet but this value layer of internet almost starts feeling like one single block space the way you feel again I coming back to this I'm coming back to this that you know web two in web two all the information seems like we are a part of the same internet. That is going to be happening with these with the value where all these chains will feel like one single block space applications can interact with each other compose with each other at a much much faster time and then we have a lot of other things like people are looking to build optimistic you know kind of without even two seconds of proof the moment you have a transaction an optimistic kind of construction between these two seconds of proof where you can all have an instant transaction from one chain to another but all those things are possible to build on top of it and we invite more and more builders to build on these on top of it. And then Polygon CDK already talked we recently announced and there are already a large number of applications that are building on it. I'll talk about them.

Interoperability layer I already said that this interoperability layer is essentially, you know, going to combine all the ZK proofs. Everybody submits the ZK proofs to this interop layer and then, you know, we submit one single proof to the Ethereum chain and you can see that it will The benefit of this is that you have, you know, ZK EVM, Polygon POS chain, these big high liquidity chains are already there, but then you can have a lot of these, you know, app chains which are able to benefit from the liquidity of these public chains. And what is happening is very soon, this is, you know, some alpha I'm dropping here. Very soon you're going to hear that some large and some of the top, you know, layer ones are joining this because you see that a lot of layer ones want to be layer twos and whatnot and a lot of layer ones are also considering this because they don't The best part about this is that any chain that is connected to this network can be fully sovereign. So, there can be a layer one chain which has its own validators, own, you know, staking and everything, own governance and they are just connected to the overall layer with everyone with ZK proof.

They're just submitting their ZK proof. So, it's much easier, much less intrusive for anyone else. Anybody can join this this layer and the benefit it's a mutual win-win because everybody wins from each other's liquidity. That means the the value flowing through this. So, this this layer is very very important and then one part of the Polygon 2.

0 is also this, you know, token migration. We, you know, we rebranded from Matic Network to Polygon back in around like end of 2020 and we already had committed to our community that we will the token will also migrate to this pool token because magic token was a single chain you know ecosystem and then pool token is is is is is one which is going to represent this multi-chain environment and it will be a one-to-one swap. There are you know few changes in the economics that we have proposed. Any of you guys who are following they will see that supply the base supply remains the same and then we have added 1% of validator reward every year which will go to the validators and there is 1% of these reward 1% of this thing goes to the community treasury because polygon is like polygon token is live there in the market for last 4-5 years and you have like a lot of new projects coming in with much large treasuries. So polygon ecosystem as and as you know that it's one of the biggest probably the biggest ecosystem after ethereum in terms of the apps and developers building on it.

It needs to have its it needs to preserve its you know competitive advantage in terms of being able to onboard more and more developers. Luckily everything is going fine. Community likes that a proposal. Similarly this token about the pool token that we said that the the nature of polygon token is we call it a third generation token. Why?

Because you know the first generation was BTC where BTC as a BTC holder you cannot contribute to the network by participating in the network. You know you can just hold it. Whereas with ethereum with the specially with the proof of stake update now you can if you hold ethereum you can use ethereum to stake to a validate validator which you believe is a high quality validator and and contribute to the to the you know more security and maturity of the ecosystem. But with polygon why we call it a third generation ecosystem is here you can not only validate on one single layer you can validate on multiple chains because you know we also I I talk about the staking uh, you know, layer where this is the enshrined re-staking where everybody can just take their MATIC or the POOL token and then any app chain, which is very hard for them to have like hundreds of validators, any app chain needs any additional validators, they can just request the chain that I need 10 validators and then POOL validators can go and uh, you know, stake so people can validate or the Polygon holders can validate on multiple chains and also they can take multiple roles. They can be an aggregator, they can be a validator or sequencer, they can be eventually decentralized provers, they can also provide data availability clusters, local data.

We are not doing a global data availability layer, but there are local data availability clusters if the chains who wants to use their own data availability clusters. So, uh, you know, that's about the tech. In terms of uh, the state of the ecosystem, as uh, you know, many of you guys might know, especially with Immutable and all that, we are like probably by by at least an order of magnitude biggest platform in gaming because uh, you know, like I mean, if you if you if you speak around, if you are in active in the Web3 gaming space, you will see, you know, 90 out of 100 games would be building on either directly on Polygon chains or Immutable or other Polygon ecosystem players. You know that in terms of the brands, like I think there are already leaked reports that Grab itself, which is super big in uh, you know, in this part of the world, they have also, you know, launched a Web3 wallet and, you know, obviously they started as with the Polygon wallet. Similarly, in DeFi, we are still the number three.

We have not done any incentives for last 2 years in DeFi, but still the Polygon DeFi ecosystem is still the number three ecosystem uh, and and you know, in terms of DEX transactions, you see it's at times number one uh, you know, ecosystem by the number of transactions. The total amount uh, we are like number three, Ethereum being the number one, Arbitrum on the on the number two in DeFi. In NFTs recently, you know, there's a resurgence in the NFT ecosystem and Polygon ecosystem is down number two in NFTs. And in app chains also you will see like you know, some of these brands, I think you guys all know that you know, Starbucks and Nike and Adidas, everyone like every new brand you hear you know, every month that you know, they are doing they were building on Polygon. And then on the Polygon CDK, this is kind of a old list right?

This has already increased to in the last one week seven like you have NoSysPay. You have Immutable ZK EVM, you know, you have a a lot of other projects like new bank heavyweights like new bank, you have DFI native projects like IDEX, Aavegotchi. There are so many you know, high profile projects which are already adopting CDK. And as I said, I dropped some alpha that some big you know, L1s are also going to join us in this creating this value layer of internet. And you know, some of the partnerships that you guys know on gaming and all that front.

That's all from my side.