Polygon is the future of Ethereum
April 14th, 2022
Scalability is the biggest issue facing blockchains today. Ethereum already showed strain in handling users at the peak of 2021 - imagining 100x more users would be disastrous if nothing changes.
Of all the efforts going on to scale Ethereum, Polygon is not only the most ambitious collection of projects but also a useful lens for the casual observer to feel out the frontier of scalability.
Understanding modular blockchains
Polygon describes itself as an “Ethereum scaling platform”.
So in order to properly understand what Polygon does, the following is 20 hours of reading distilled into a 3-minute crash course on modular blockchains, the big scaling effort coming to Ethereum in the coming years.
The move to modular blockchains breaks one blockchain that does a lot of things into multiple specialized chains that do fewer things.
If you wanted to do 5 things, today’s Ethereum goes through 4 steps to get them done:
Execution - determine if those 5 things are even possible and then calculating what each thing does. For example, do you have the 10 tokens that you're trying to spend? Then, how many tokens does everyone have after each of those 5 things is done?
Data availability - determine if all the related data for those things has been published. Nodes need access to all the data to (1) double-check if those 5 things are possible and (2) rebuild the chain’s history from scratch, if ever needed.
Consensus - determine the order the 5 things should be done in.
Settlement - commit all the changes from those 5 things to "reality". All other nodes now have the changes.
The challenge today: all blockchains are trying to do all of these steps in one big system.
Modular blockchains are about splitting these 4 steps into multiple blockchains that each do fewer things but combine into one hyper-scalable system.
There are two major tracks of work to enable modularity. Ethereum estimates that the full adoption of these two tracks could result in 100,000 transactions per second (from 35 today):
Rollups focus on execution. Instead of doing 1,000 transactions directly on Ethereum, you do your stuff on a rollup chain, which then batches 1,000 transactions together and post them as ONE transaction on Ethereum. These are commonly referred to as “L2” solutions, where Ethereum is an “L1”.
Data availability layers specialize in making the data available and nothing else. With such a layer, Ethereum would simply look for a "thumbs up" from the data availability layer instead of checking for the data itself. Recently developed techniques make data availability layers possible and extremely scalable.
Examples: Celestia, Ethereum data sharding
One level deeper into rollups - there are two types of rollups, each with tradeoffs:
Optimistic rollups take a batch of transactions and assume they are correct. You wait some time (e.g., 7 days) to see if anyone finds fraud in the transactions. If they do, then punish whoever introduced the fraud. Otherwise, the chain receiving the batch (Ethereum) will assume there's no fraud.
ZK rollups take a batch of transactions and do a lot of fancy math on them. The output of that math is sent to Ethereum, which checks the work.
Pros: Doesn't strictly need the data (the math being correct implies the data existed). Once math is done, you can do new things like withdraw tokens instantly.
Cons: The math is really hard to do right now and can take a long time (e.g., 30 minutes). Also, the math can't handle all types of use cases yet.
Put together, one future Ethereum looks like this:
As a user, you do all your stuff on a rollup
The rollup sends Ethereum a message saying, "Here are a bunch of valid things that should happen. The new world looks like X."
The rollup sends the data availability layer a message saying, "Here's all the data related to the stuff that should happen. Please check."
The data availability layer checks the data, then sends Ethereum a message saying, "All good! The data is here."
Once Ethereum has both messages, it says, "Thank you very much. The new world is now X (as provided by the rollup)."
By specializing, this combination of rollup + data availability layer + Ethereum will be lightning fast and cheap compared to “big Ethereum” today.
Now let’s look at Polygon.
Polygon: in pursuit of every approach to modularity
Polygon was originally just one approach to scaling Ethereum, but through a series of acquisitions, it is now a collection of initiatives that tackle scaling Ethereum through optimistic rollups, ZK rollups and a data availability layer.
It’s working on everything that the modular blockchain approach needs.
We outlined the theoretical future of blockchains above, but the specifics are still unclear today - which rollup type is better, how many rollups there will be, etc. Only time and usage (by both developers and users) will reveal these answers.
Polygon’s breadth lets it cover nearly every base we can think of, which is a big advantage compared to other L2s, who are only building one product.
Seven products compose the collection:
Polygon Hermez is a ZK rollup designed specifically for payments and token transfers.
Polygon Miden is a ZK rollup that will support any smart contract. This is an improvement from current ZK rollup capabilities, which can only support certain limited use cases.
Polygon Zero is a ZK rollup that's really fast. It can do the fancy math in <1 sec, and it can break up a batch of transactions into many rounds of the math to process them faster. Current ZK math can take up to 30 minutes.
Polygon Nightfall is an optimistic rollup that gets rid of the 7-day wait to withdraw, which is the main pain point for optimistic rollups.
Polygon Avail is a data availability layer which will compete against Celestia and Ethereum's own sharding, which will do something similar.
Polygon Edge allows you to create your own Ethereum-compatible blockchain really quickly.
Polygon PoS is their original chain, which uses a now-outdated approach that's similar to optimistic rollups but doesn't truly support fraud challenges.
As you can see, Polygon is tackling rollups and data availability, with both optimistic and ZK rollups that try to improve on major challenges that their rollup methods face.
The broad coverage goes beyond covering many bases. Blockchain research has been a highly collaborative effort, with each chain adopting learnings from others and pivoting when the current path isn’t working.
Each Polygon effort is learning a lot about what’s possible with each approach. Over time, Polygon’s internal cross-pollination will determine if it can layer each new development - Miden’s support for all smart contracts, Zero’s fast ZK math, etc. - together to create one chain that can do it all.
Why Polygon can win
Across all of web3, Ethereum’s move to modularity is one of the most hotly anticipated roadmaps in the next 2-3 years. Polygon not only rides one of the largest waves in the ecosystem but is part and parcel in accelerating its progress.
The thesis on Polygon sums up to the following:
By virtue of having the most lines in the water solving fundamental problems in rollup technology and the strongest internal engine to generate and share knowledge, Polygon is the leading player to watch in the rollup space.
Polygon’s work in data availability gives it full coverage of the modular blockchain. The future of Ethereum could be full of Polygon: Polygon rollups + Polygon data availability on top of Ethereum (let alone the potential for other chains to build on Polygon data availability).
Looking ahead, blockchain usage in the enterprise is an obviously significant but unclear opportunity. Polygon’s partnership with EY could be a strong pairing to rapidly discover enterprise use cases and distribute Polygon technology (Nightfall, Edge) en masse.
Here are some things to keep in mind:
Victory will come in the multi-year timeframe. All rollups are early in their journey, so we are years away from observing any adoption trends that signal which rollups are better than others.
Once it arrives, the competition among rollups will look much like the competition among Ethereum killers. Attracting developers and innovative use cases is critical, and the entire web3 space is still developing the playbook. Polygon hired the former head of gaming at YouTube to build out its gaming/NFT/metaverse partnership strategy - but hiring is just one piece of the puzzle.
Though the modular conversation largely revolves around Ethereum, other chains could also move to modular structures. It’s unclear how this would affect Polygon directly (if at all), but such a development would blow out the playing field.
Nothing is assured, but Polygon is one of the most promising organizations building out the future of blockchains. I look forward to keeping in touch with their momentum.
Thank you to currycraver and djshampoooo for their feedback and editing of this week’s update!
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