When Ethereum announced that its forthcoming Eth2 upgrade would arrive in 2022, the first thought was: What will happen to Polygon, the Layer 2 scaling solution that makes Ethereum transactions faster and cheaper? Is it going to be obsolete after Ethereum’s upgrade?
The simple answer is – no. The latest $450 million funding led by Sequoia Capital India to support the Polygon network’s web3 plans proves the point even more.
To understand how Polygon will remain relevant even after Ethereum 2.0 (or Eth2), let’s first look at how it works.
The Polygon network helps Ethereum’s network by providing an infrastructure that makes transactions cheaper and faster. It is one of a handful of so-called Layer-2 scaling solutions that helps Ethereum increase the number of transactions.
Now, with Eth2, the Ethereum network plans to shift away from proof-of-work (PoW), a system that uses computing power to verify transactions. Since PoW is really slow, the Ethereum developers want to replace it with “proof-of-stake” (PoS). (You can read more here about the difference between PoW and PoS.) Ethereum can only process about 30 transactions per second (TPS). When Eth2 is fully launched, Ethereum is expected to be able to process 100,000 transactions per second.
Although Eth2’s promise sounds exciting, the truth is that even after the upgrade, the Layer 2 scaling solutions like Polygon might be needed in order to address infinite scalability issues.
Ethereum is the largest blockchain network and home to thousands of tokens and decentralized apps. It will continue to grow in the coming years, and so will its scalability issues. While Eth2 will provide a long-term solution to ensure stability on the Ethereum network, Layer 2 scaling solutions might be needed to provide a short-term solution.
Moreover, Polygon announced it would focus on multiple technologies, including zero-knowledge rollups and optimistic rollups. The firm has already acquired two zk rollup startups that will help to enhance the performance of the Polygon network. Polygon’s co-founder Sandeep Nailwal believes that zero-knowledge will be the future of blockchain scaling.
Thus far, the network has processed 23 million blocks and 1.3 billion transactions. Many Ethereum ecosystem protocols such as Curve, Aave, Sushiswap, Uniswap, OpenSea, Decentraland, and The Sandbox have been deployed on Polygon. In other words, one cannot say that Ethereum is upgrading alone; its supporters are getting promoted as well.