Deep Dive into Polygon 2.0: A New Blueprint for Mass Adoption
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Deep Dive into Polygon 2.0: A New Blueprint for Mass Adoption
More and more efforts are being made to improve scalability both vertically and horizontally on the network, and Polygon 2.0 is moving forward along this path.
Navigating Web3 tides with focused insightsAuthor: 100y
Compiled by: TechFlow
Key Takeaways
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Recently, increasing attention has been focused on improving vertical and horizontal scalability of public blockchains.
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Polygon 2.0 is a network of ZK-powered L2 chains aiming to become the value layer of the internet, achieving scalability and interoperability through ZK technology.
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A new tokenomics model for $POL has been proposed under the new roadmap and is expected to play a crucial role before the Polygon 2.0 ecosystem matures.
1. The Path to Mass Adoption
1.1 Introduction
Although the cryptocurrency market’s price performance remains far below the previous bull market peak, blockchain diversity is greater than ever. In particular, since the last bull market was primarily driven by favorable macro conditions rather than meaningful real-world applications, many protocols in the current market are focusing on mass adoption.
Achieving mass adoption requires improvements across multiple areas, not just one. First, improving user interface and user experience for services like wallets is critical, as these are often users’ first touchpoints with blockchains. Second, more practical blockchain services must be provided to users. Finally, robust infrastructure must be established to enable seamless blockchain experiences for large numbers of users.
1.2 Blockchain Network Types and Mass Adoption
This article explores mass adoption from an infrastructure perspective—what should a network designed for mass adoption look like? Various blockchain networks have proposed unique approaches and strategies so far.
The first approach optimizes a single chain. Projects such as Solana, Sei, Aptos, and Sui adopt this method. The advantage of a single chain is that various dApps within it can interact seamlessly, offering high composability. However, the downside is that network performance is limited by its weakest node, and as nodes require higher-spec hardware for greater scalability, the network may become centralized.
The second approach builds an ecosystem of multiple L1 networks with proper cross-chain protocols. Cosmos, Polkadot, and Avalanche exemplify this method. Its advantage is theoretically infinite scalability through parallelization, but the drawback is that despite cross-chain protocols, asynchronous operations between networks reduce composability and lead to fragmented ecosystems and security.
The third approach improves scalability vertically, such as rollup networks built on a single base layer. Examples include Optimism, Arbitrum One, and Starknet. This approach leverages off-chain computation while inheriting the base layer's security, enabling high scalability and allowing diverse applications to interact with high composability within one network. However, the downside is that the L1 somewhat limits the L2’s scalability—as Vitalik Buterin pointed out, relying solely on vertical scaling structures has inherent limitations.
All the above methods are significant as they provide directions toward mass adoption, yet each has clear trade-offs. Therefore, in recent years, a hybrid approach combining the above methods has emerged, aiming to leverage the strengths of both, as illustrated below.
Beyond the Polygon chain discussed in this article, all leading rollup networks—Optimism’s OP Stack, Arbitrum’s Orbit, zkSync’s ZK Stack, and Starknet’s Fractal Scaling—are working to improve both vertical and horizontal scalability.
In the above approach, multiple L2 or L3 networks share a common base layer, offering three advantages: 1) inheriting strong security from the base layer, eliminating security fragmentation; 2) achieving theoretically infinite scalability via parallelized networks; and 3) enabling more seamless and secure interoperability and composability through shared settlement or data availability layers.
In my view, this represents the optimal model for blockchain mass adoption because: 1) blockchain network security needs to be unified rather than fragmented to support large-scale capital flows; 2) it must deliver high scalability to users; and 3) asset transfers and interactions need to remain seamless and secure even across multiple networks.
2. Polygon 2.0
2.1 The Value Layer of the Internet
Recently, Polygon released the blueprint for Polygon 2.0, based on the aforementioned hybrid approach, envisioning a “value layer for the internet.” Just as anyone can create and exchange information on the internet, this value layer enables anyone to create, exchange, and program value.
The value of Polygon 2.0 lies in “infinite scalability” and “unified liquidity,” achieved through a network of ZK-based L2 chains. From the user’s perspective, despite using multiple ZK L2 chains, the experience will feel like operating on a single chain.
2.2 Polygon PoS → Validium
Before diving into the architecture of Polygon 2.0, Mihailo Bjelic, co-founder of Polygon, published a proposal on the governance forum to upgrade the existing L1 network, Polygon PoS, into a Validium to realize the vision of Polygon 2.0. Polygon already possesses Ethereum-compatible ZK L2 technology called Polygon zkEVM, which currently operates well.
First, introducing zkEVM allows partial reliance on Ethereum’s security, as validity proofs of computations from the Polygon PoS network will be verified on Ethereum. Second, existing Polygon PoS validators will manage transaction data instead of relying on Ethereum, enabling lower fees and faster speeds compared to standard rollup models.
This slightly changes the role of Polygon PoS validators: first, they continue ensuring transaction data availability; second, they act as sequencers determining the order of transactions on L2 networks.
2.3 Polygon 2.0 Architecture: A Network of ZK-Based L2 Chains
How does the structure of Polygon 2.0 address improvements in vertical and horizontal scalability? Similar to the internet’s layered protocol suite, Polygon 2.0 consists of layers performing distinct roles.
2.3.1 Staking Layer
The staking layer manages validator-related operations for Polygon 2.0 and exists as smart contracts on the Ethereum network, including two types:
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Validator Manager — A smart contract managing the validator pool within the Polygon 2.0 ecosystem, including lists of all validators, which validators participate in which Polygon chains, their stake size, stake/unstake requests, penalties, etc.
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Chain Manager — A smart contract per Polygon chain managing validator lists and configuration (e.g., max/min validator count, penalty conditions, required token type/amount for staking).
Validators can join the shared validator pool of Polygon 2.0 by staking tokens and participate across multiple Polygon chains. Validators in Polygon 2.0 are primarily responsible for ordering and validating user transactions to create blocks, generating zero-knowledge proofs, and ensuring transaction data availability.
Validators are compensated through: 1) protocol rewards, 2) transaction fees from participating Polygon chains, and 3) additional rewards (e.g., native tokens) from specific Polygon chains.
2.3.2 Interoperability Layer
The interoperability layer enables seamless cross-chain communication within the Polygon 2.0 ecosystem, giving users the impression of using a single-chain network despite utilizing multiple chains.
Each Polygon chain maintains message queues containing messages sent to other Polygon chains, including: 1) content, 2) destination chain, 3) destination address, and 4) metadata. These message queues are accompanied by corresponding zero-knowledge proofs (ZKPs). Once a specific message’s ZKP is verified on Ethereum, the destination chain can securely execute the cross-chain transaction.
However, due to the high cost of verifying ZKPs on Ethereum, the interoperability layer includes an Aggregator component that batches multiple ZKPs generated from message queues across Polygon chains, enabling lower-cost verification on Ethereum. To ensure decentralization, liveness, and censorship resistance, the aggregator is managed by Polygon 2.0’s shared validator pool.
In practice, once the aggregator receives a ZKP, the destination chain optimally processes the transaction, delivering a “unified liquidity” experience where transactions are nearly instant—even across multiple networks.
2.3.3 Execution Layer
The execution layer is where actual computation occurs on Polygon chains and includes typical blockchain components (e.g., P2P communication, consensus, mempool, database).
Polygon chains offer high customizability at the client level, including native tokens, transaction fee distribution, additional validator rewards, block time and size, checkpoint intervals (ZKP submission frequency), and Rollup/Validium selection.
2.3.4 Proving Layer
Since Polygon 2.0 is a set of ZK-based L2 chains, ZKPs play a crucial role. The proving layer generates ZKPs for every transaction on Polygon chains. Provers use Plonky2, developed by the Polygon team.
3. New Token: $POL
3.1 Tokenomics Model
While we’ve closely examined Polygon 2.0, it’s clear that realizing this vision involves both protocol economics and technology. To this end, Mihailo Bjelic, Sandeep Nailwal, Amit Chaudhary, and Wenxuan Deng proposed a new token model named $POL to the Polygon community.
In the whitepaper, they defined $POL’s design goals as: 1) ecosystem security, 2) infinite scalability, 3) ecosystem support, 4) frictionless experience, and 5) community ownership, proposing the following use cases:
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Validator Staking: Validators in Polygon 2.0 must stake POL tokens to join the validator pool.
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Validator Rewards: Validators will receive ongoing predefined rewards. By default, they earn protocol rewards and also receive transaction fees or additional incentive rewards from Polygon chains.
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Governance: The token will be used for governance, though the governance framework hasn’t been publicly detailed. A new community fund will be established, managed by POL token holders, to support the ecosystem.
The initial supply of POL tokens is 10 billion, migrated 1:1 from MATIC, with a proposed total inflation rate of 2%:
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Validator Rewards: Over the first 10 years, validators will receive an additional 1% of the total supply. Afterward, the community can decide via governance whether to maintain or reduce this allocation.
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Ecosystem Support: Over the first 10 years, 1% of the total supply will be allocated to the newly introduced community fund, usable via community governance for ecosystem development. After 10 years, the community can vote to maintain or reduce this allocation.
Unlike the existing MATIC tokenomics model, where the total supply is fixed at 10 billion, POL has an annual inflation rate of 2% for 10 years. This inflationary supply will support the network until the Polygon 2.0 ecosystem matures sufficiently to become self-sustaining through transaction fees. Once the ecosystem is well-established, the community can vote via governance to reduce inflation. Considering Bitcoin’s current inflation rate of approximately 1.8%, 2% is not an excessive figure.
3.2 Simulation Assumptions
But how realistic is the new POL tokenomics model? Is network security sufficient? Are validators adequately incentivized? Is the ecosystem sufficiently supported? Polygon conducted simulations to answer these questions and included the results in the whitepaper.
Based on a series of assumptions, it’s evident that even in worst-case scenarios, validator incentives could reach 4–5% annually, and the community fund would be adequately capitalized. (Note: The community fund size is calculated assuming an average POL price of $5.)
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Average transaction fee on public Polygon chains: $0.01 (current average on Polygon PoS), average number of validators: 100, average TPS: 38.
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Average transaction fee on Supernets Polygon chains: $0.001, average number of validators: 15, average TPS: 19.
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Average annual operating cost per validator: $6,000 (halving every three years based on an improved Moore’s Law).
3.3 Comparison with Other Tokens
At first glance, the proposed POL tokenomics resemble those of Polkadot’s DOT, Cosmos’s ATOM, and Avalanche’s AVAX, but there are key differences.
First, a major difference exists between POL and DOT: For Substrate-based networks to become parachains, they must lock a large amount of DOT tokens into the Polkadot relay chain via a process called parachain auctions. In contrast, in Polygon 2.0, anyone can deploy a Polygon chain, and qualified validators can freely participate.
Second, subtle differences exist between POL and AVAX and ATOM (with ICS enabled). All three allow staked validators to participate across multiple networks, but differ in inflation rates, governance mechanisms, and other aspects.
4. Conclusion
As the blockchain industry and technology mature, more efforts are emerging to improve both vertical and horizontal scalability. Polygon 2.0 follows this trajectory. While other leading L2 projects (e.g., Optimism, Arbitrum, zkSync, Starknet) are pursuing similar paths, Polygon 2.0 stands out due to: 1) highly Ethereum-compatible zkEVM technology, and 2) a cross-chain solution leveraging ZKPs.
While other projects mention multi-L2/L3 chains and cross-chain solutions, few offer detailed technical designs. Recently, cross-chain projects have begun adopting ZK technology (e.g., zkBridge, Electron Labs, Polymer Labs), and Polygon 2.0 also integrates ZKPs into its cross-chain solution, aiming to deliver a superior cross-chain user experience.
Let’s wait and see whether Polygon 2.0, together with ZK technology, can achieve scalability and interoperability to become the value layer of the internet.
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