Web3

Polygon has released its Layer 2 blockchain built with zero-knowledge technology, becoming the second company in four days to make a so-called ‘zkEVM’ available to the general public. 

Polygon zkEVM remains in beta, and the company stressed that it should be used with caution – a fact that will change in the coming months, according to co-founder Mihailo Bjelic.

Its release, nevertheless, marks a turning point in Ethereum scaling, he insists.  

“If we can maintain the security of Ethereum, achieve scalability, and do not sacrifice developer and user experience — that’s basically all we need, right?” Polygon co-founder Mihailo Bjelic said in an interview with The Defiant before the launch of Polygon zkEVM. “And zkEVM is, to the best of my knowledge, the only solution that offers all three things simultaneously.”

Polygon’s MATIC token is down around 2% over the past 24 hours, according to data from The Defiant Terminal.

zkEVMs

Layer 2 blockchains built with zero-knowledge (zk) technology have been called the “holy grail” of making Ethereum cheaper and more performant. On Friday, Matter Labs released ZkSync Era, marking the first public launch of an Ethereum-compatible rollup secured by the technology. 

Matter Labs, Polygon, and others have raced to bring their rollups to market and storm a Layer 2 field dominated by optimistic rollups Arbitrum and Optimism, which together account for 88% of the crypto assets deposited on rollups, according to L2BEAT.

Scaling Ethereum

Ethereum is slow, and the simplest transactions typically incur a fee of $1 or more. That fee can surge when the network is congested — last May, during a hyped NFT sale from Bored Apes creator Yuga Labs, users incurred an average transaction fee of $474, according to DappRadar.

Layer 2 blockchains, also known as “rollups,” batch and compress user transactions before appending them to the Ethereum blockchain. Doing so dramatically reduces the per-transaction cost and increases the number of transactions Ethereum can handle.

Rollups are considered the most promising technology to scale Ethereum. As such, the companies building them have been valued in the billions. But the field has been dominated by rollups built with so-called optimistic technology, which assumes submitted transactions are valid and provides a seven-day period during which one can dispute potentially fraudulent transactions. This means withdrawals take a week when using the official bridge.

ZK Technology

Zero-knowledge technology makes it possible to prove that a statement is or is not true — that John Smith is a millionaire, say — without revealing any of the information that would typically be required to do so — in this example, John Smith’s bank account or employment history. 

Many privacy-enhancing protocols leverage zero-knowledge technology, but the first Ethereum-compatible zk-rollups to hit the market will not preserve user privacy or obfuscate their transaction history.

Proponents of ZK rollups have long argued that they would be more secure than their “optimistic” competitors while providing instantaneous transaction finality — no seven-day dispute window required.

“It is not possible to execute malicious transactions” on a zero-knowledge rollup, Bjelic said. “You just rely on mathematics.”

But they’re fiendishly complex, and building one that is compatible with the Ethereum Virtual Machine — the EVM in zkEVM — has proven difficult.

“People familiar with the matter have been estimating that it’s gonna take roughly three to five years to build a zkEVM when we started a little bit more than a year ago,” Bjelic said. “This has been really an exciting journey during which we were able to achieve several important breakthroughs from the engineering and cryptography side.”

Polygon zkEVM has been available for developers to test since October. Monday’s release marks its jump to Ethereum’s mainnet.

On the test network, developers are playing around with “test Ether, test MATIC tokens, whatever, there is no real value there,” Bjelic said. “When you’re on mainnet, you’re bridging actual assets. It’s the real thing.”

Work In Progress

Beta is developer shorthand for “work in progress.” Some long-running blockchains are still officially in beta, including Solana and Polygon’s original proof-of-stake sidechain,” Bjelic said. Nevertheless, users should exercise caution in Polygon zkEVM’s first couple of months.

“It’s a bleeding-edge technology that has never been built before,” he said. “We will keep auditing it internally and externally. We have bug bounties etc. It’s a process of the network maturing, and it will take some months, if not a year.”

ZkSync Era was released Friday in alpha, the software development stage before beta.

Rollup Race

The race to launch the first Ethereum-compatible, zero-knowledge rollup has been contentious,  with rival teams sniping at each other on social media over the past several months. Last year, a developer working on a competing zkEVM said Polygon’s zero-knowledge rollup did not meet the criteria to be called a zkEVM.

Bjelic attributed the “Twitter brawls” to the prestige that would come with delivering the first true zkEVM, and brushed off the criticism.

“I think it always, obviously, boils down to the facts,” he said. “Vitalik [Buterin, the founder of Ethereum] helped introduce some clarity when it comes to the concept of zkEVM, and what is, and what is not.…and Polygon is very obviously a zkEVM, I think that’s not a question.”

Polygon is most famous for its long-running blockchain, Polygon Proof-of-Stake. Polygon PoS is popular – with its speed and low fees, it has grown to become the fifth-largest blockchain as measured by total value locked, according to Defi Llama.

While Ethereum-compatible, it is an entirely separate blockchain and does not append its transaction data to Ethereum. Last year, Bjelic said Polygon was working to turn Polygon PoS into a “true” Layer 2 that inherits its security from Ethereum.

Future of Polygon PoS

Which raises the question: having built the “holy grail” of Ethereum scaling, a true rollup, where does that leave Polygon PoS?

“I think there’s definitely room for both,” Bjelic said. Because rollups submit transactions to Ethereum, they have inherent limitations in terms of throughput and how low they can push down transaction fees.

“Polygon PoS chain still has very low fees and can have higher throughput than any rollup, including the zkEVM rollup,” he said. Some applications, such as DeFi lending platforms, which process a relatively small number of high-value transactions, don’t need the speed of PoS but could benefit from the security of a zkEVM. Blockchain-based games, on the other hand, might need fast and cheap transactions, which PoS is better positioned to deliver.

Bjelic said he was happy to release a zkEVM during a period some consider to be crypto’s darkest, with asset values still well below their all-time highs and heightened regulatory scrutiny in the US that has some entrepreneurs looking to move abroad. 

“The climate is generally kind of negative, I would say, and we now more than ever need some excitement,” he said. “And I think the zkEVM is really the technology that can reignite this interest. In some way, it can be kind of like a chatGPT for crypto.”