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Polygon 2.0 Plans to Solve the Liquidity Fragmentation Problem on Ethereum

As part of its vision to be the “value layer of the Internet”, Polygon Labs is transforming its entire architecture.  Polygon 2.0 will have a new architecture that allows for more flexibility and simplicity in creating new chains within the Polygon ecosystem. Polygon is a layer two solution for Ethereum. It aims to overcome some of the challenges of Ethereum by using a sidechain approach.

The upgrade will simplify the creation of new Polygon chains and enhance their cross-chain compatibility. This will remove the necessity of using wrapped tokens, which are tokens that represent assets from another blockchain. For example, Wrapped Bitcoin (WBTC) enables users to transfer their Bitcoin to the Ethereum and Tron networks.

Polygon 2.0 will use a single contract on the Ethereum mainnet to store native Ethereum tokens. Users can transfer their tokens between different Polygon chains without wrapping them because the assets will be mapped to the tokens on Ethereum. This will make the user experience better.

Polygon co-founder Brendan Farmer explained that the coordination layer will enable cross-chain transactions to be safely and quickly confirmed. He said that this is the first multi-chain design that will offer unified liquidity.

Polygon Plans to Combine Its PoS Chain with zkEVM Technology

Polygon 2.0

To enhance the system, Polygon plans to use zero-knowledge (ZK) proofs as an additional feature. These are cryptographic tools that allow one party to prove they have some secret information without revealing it to another party, but still convincing them of its validity. 

For instance, when using online services that require personal details like names or birth dates, a ZK proof can verify that the party has those details without exposing them.

The new system will use ZK proofs to store the validated transactions on the L1, and the transaction data on the L2 that will be added. This will make the Polygon network more efficient and secure. The original Polygon network will also use ZK proofs for the same purpose.

Polygon co-founder Mihailo Bjelic said that the upgrades are part of a vision to create “the missing piece of an Internet” and build a “digital economy that serves everyone.”

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