by Antonio Fernández fom beToken Capital Research
It is already a reality: Layer 2 protocols are prevailing in Ethereum, increasing the variety of applications they have, and distributing among them a large part of the liquidity and value of this gigantic Layer 1. And among all that chaos of Rollups, Plasma and Validium finds Polygon:
A Layer 2 protocol to unite them all…
You have probably heard of Polygon as a sidechain, as an interoperability protocol between blockchains and other Layer 2, as a Polkadot version of Ethereum, or as an SDK to create individual blockchains, like Cosmos Network. And in all these cases, you heard correctly. Polygon is a project with great ambitions, as its own motto indicates…
Get ready, Tokener, to discover everything you need to know about the potential future Internet of Ethereum Blockchains.
This is the first part of a series of articles aimed at learning more about Polygon and its ecosystem. This focuses on presenting the project, and its ambitious multichain goal. Prepare a nice cup of your favorite snack, and embark on this complex, but exciting journey.
A multi-Layer 2 future on Ethereum
If you read my previous article (perhaps it will help you understand this analysis), you will have known about the different Layer 2 technologies that are currently used to achieve a more scalable Ethereum, and the many projects built on top of them.
As time goes by, more and more Layer 2 projects emerge with innovative ideas and enormous potential, and as their Smart Contracts are deployed on Ethereum, they each take considerable capital from the gigantic blockchain, attracting the attention of hundreds of Ethereum developers. software and dApps, which create their different projects there, thanks to the low transaction costs and high processing speed offered by these protocols.
As you can see in L2Beat, a very interesting page full of useful information about the most relevant Layer 2, the TVL that all of them add up to is more than 5 billion dollars, and almost all of it has been obtained in less than a year. Of this capital, the most successful project, Arbitrum, takes just 50%. And this is a percentage that will most likely decrease, as more Layer 2 protocols are consolidated on the Ethereum mainnet. The ecosystem is evolving fast, and it seems that it is heading towards a multichain future with several Layer 2 protocols sharing transactions with Ethereum…
And that can lead to a problem. In this Coinmonks article it is argued that Layer 2 alone will not save Ethereum, as they present numerous setbacks that must be solved. They all stem from one single thing: interoperability between Layer 2 protocols is severely limited.
Although there are many projects focused on creating bridges between Layer 2, there is still a lot of work and development to achieve a fully interoperable ecosystem, in which, for example, transactions using different Layer 2 dApps can be carried out at the same time, and the capital flows between them easily, without having to wait weeks (as is the case with Optimistic Rollups due to fraud proofs), or having to create at least one account in each of the protocols.
Interoperability between Layer 2 protocols will be key to a future multichain for Ethereum.
What is Polygon?
Polygon is presented on its website as a protocol and development environment for creating and connecting Ethereum compatible blockchains. In this way, it seeks to add scalability solutions (Layer 2) to bet on a multichain future in the great ETH blockchain.
As can be seen in the image above, Polygon intends to become a network of blockchains with different Layer 2 technologies, which can be easily created and customized through its SDK (Software Development Kit).
Polygon claims to have 2 main types of blockchains in its ecosystem:
Individual Blockchains (or Sidechains): The Polygon SDK will allow you to build individual blockchains, with their own consensus system and validators, fully sovereign and independent, that can be application specific or designed for enterprises. This option is similar to what Cosmos Network already does with its own SDK.
Secured Blockchains: Blockchains designed in the Polygon environment can enjoy (although it is not mandatory) security as a service, that is, they can delegate their transaction validation or to Ethereum, by adopting Fraud Proofs or Validity Proofs (thus becoming Optimistic Rollups and full-fledged zk-Rollups, respectively), or to a specialized group of trusted PoS validators from Polygon, in a way somewhat reminiscent of Polkadot's security as a service. In this case, security will also depend heavily on Ethereum, as will be seen later in the article.
Only two of these implementations are currently in operation: Polygon PoS, a sidechain secured by Polygon PoS validators, and Polygon Hermez, a zk-Rollup. Implementations of both Optimistic Rollups and individual blockchains are still under development, in addition to others with Layer 2 technologies such as Validium and STARK.
Polygon's architecture
As shown on the Polygon website, the protocol architecture consists of 4 abstract layers, which can be combined with each other:
The Ethereum Layer is nothing more and nothing less than the Ethereum that we all know. This layer is made up of a group of Smart Contracts with different functionalities:
Purpose of transactions. Periodically sending information about the transactions carried out in the blockchain to Ethereum, after passing through the security system that it uses, these transactions are considered to be final, since they are registered in a Layer 1 block.
Staking. Polygon's PoS validation system is closely related to Ethereum, since the Smart Contract that manages the validators' staking is located there.
Disputes. In Ethereum, disputes about the status of Optimistic Rollups are resolved and the Validity Proof of zk-Rollups are registered.
Posts. Smart Contracts to exchange information between the blockchain and Ethereum, and token bridges between both blockchains.
The Security Layer is the layer that is responsible for the security as a service offered by Polygon. It manages the PoS validators that ensure the different blockchains that use the layer, through their registration, reward, slashing, etc. You can create several implementations of it, depending on the validators you want to use, and the actions they perform. It can be defined, for example, that this layer is Ethereum itself, taking its miners as validators. The members of the Security Layer can be in charge of both participating in PoS consensuses and sending Fraud Proofs and Validity Proofs to Ethereum, and resolving disputes, in the case of Rollups.
The Polygon Networks Layer is the set of sovereign and specific blockchains that will be part of the Polygon ecosystem, and that will be able to use the two previous layers to increase their security and obtain finality of transactions, if they consider it necessary, or dispense with them in pro of its own consensus mechanism and set of validators. They can connect and communicate with the other Polygon blockchains.
The Execution Layer is the layer that interprets the transactions carried out in the Polygon blockchains and is in charge of executing them. It has two sublayers:
The Execution Environment: basically it can be any Virtual Machine compatible with Polygon. For now, the best known and used of all, the EVM (Ethereum Virtual Machine), is implemented.
The Execution Logic: it is in charge of giving meaning to the transactions, and of defining which is the state that they modify. In Polygon it is usually represented by Smart Contracts Ethereum.
Finematics offers a very illustrative video about the architecture of Polygon, in case you have any questions:
POLYGON (MATIC) - Ethereum's Internet Of Blockchains Explained - Layer 2
With this architecture, Polygon blockchains can take enormous freedom in terms of the applications for which they are designed, which will favor a more varied and flexible ecosystem, to aspire to host, in the future, the entire DeFi ecosystem. of Ethereum.
The beauty of the Polygon SDK is the modularity: the ability to combine layers, or skip them altogether, for the functionality you want the blockchain to have. Here's a homegrown illustrative table of what's gained and lost by applying or skipping Polygon layers:
With this architecture, Polygon blockchains can take enormous freedom in terms of the applications for which they are designed, which will favor a more varied and flexible ecosystem, to aspire to host, in the future, the entire DeFi ecosystem. of Ethereum.
If you liked this first part, and you want to continue this journey into the internet of Ethereum blockchains, don't forget to share the article. See you in the second part, where we will talk about Polygon PoS Chain, the first and tremendously successful Polygon sidechain, and the origin of this ambitious project.
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