The blockchain landscape is witnessing significant advancements in security models that enhance security and efficiency. Eigenlayer and Babylon are at the forefront of this development, each proposing unique solutions that expand the traditional security measures of Ethereum and Bitcoin, respectively.

This article delves into the technical aspects of both platforms, comparing how Eigenlayer extends Ethereum’s Proof of Stake (PoS) security with how Babylon extends Bitcoin’s Proof of Work (PoW) security across the broader Web3 ecosystem.

The Birth of Restaking

Restaking was largely introduced to Web3 by Eigenlayer, marking a pivotal moment in Ethereum’s evolution. The platform emerged as a response to the growing need for more versatile and robust security solutions that extend beyond the base layer of blockchain networks. Recognizing a gap, Eigenlayer was developed to specifically address these issues by enhancing the adaptability and effectiveness of Ethereum’s Proof of Stake (PoS) mechanism. This innovation opened new possibilities for security and functionality in decentralized applications (dApps), providing a vital tool for developers and validators to safeguard their projects against an increasing array of threats.

While unknown to many as Eigenlayer quickly rose to the scene, Babylon is another restaking project that was born at the same time as Eigenlayer, but that focused on Bitcoin instead of the Ethereum ecosystem.

While Eigenlayer is already in mainnet, Babylon is soon to launch mainnet as well.

Eigenlayer: Expanding Ethereum’s Security to the Application Layer

EigenLayer’s emergence as a middleware protocol atop Ethereum introduced a revolutionary approach to network security and expansion through its restaking crypto economic primitive. It provides a unique framework where staked Ethereum, or ETH liquid staking tokens (LSTs), are redeployed to secure and validate new software modules within the Ethereum ecosystem. These modules, varying from consensus protocols to oracle networks, are crucial for Ethereum’s evolution and scalability.

Key Technical Aspects:

• Restakers, Operators, and Actively Validated Services (AVS): The EigenLayer ecosystem is built upon the collaborative efforts of restakers who commit their staked ETH or LSTs, operators who maintain the network, and AVS that require distributed validation.
• Restaking: Users can participate as restakers by allocating their staked ETH directly through EigenPod contracts or by utilizing liquid restaking protocols to remain liquid while securing the network.
• Operators: These are the entities responsible for running the software on the EigenLayer platform, akin to validators in Ethereum’s PoS. They ensure the validation of transactions across the network and can also participate as restakers.
• AVS: This term encompasses a variety of services needing distributed validation, such as data availability layers and oracle networks. AVSs are integral to increasing the network’s rate of open innovation, borrowing Ethereum’s programmable trust through EigenLayer’s smart contracts.
• EigenDA: An example of an AVS, EigenDA is a decentralized data availability service designed to tackle Ethereum’s scalability challenges. It employs its own security and economic models while remaining flexible and customizable for roll-up payment structures, highlighting the potential of AVS within the EigenLayer ecosystem.

The Eigenlayer restaking mechanism extends the reach and capabilities of Ethereum’s network. Allowing staked assets to secure additional layers and services enhances the system’s overall robustness and creates new opportunities for operators and developers.

Babylon: Broadening Bitcoin’s PoW Security and Capital Efficiency

While Eigenlayer is limited to the Ethereum ecosystem with ETH as the native staking asset, Babylon has BTC as the native staking asset but is not limited to the Bitcoin ecosystem only. Babylon extends Bitcoin’s PoW security to a PoS chain, rollups, and other blockchain constructs through a comprehensive staking mode. In addition to expanding security, it also improves liquidity and capital efficiency across Web3 as BTC has, up until now, been mostly idle and subject to trust assumptions (WTBC) in order to be bridged out of BTC and into the greater Web3 ecosystem.

Key Technical Aspects

• Native Bitcoin Staking: At the heart of Babylon is the native staking protocol, which opens a gateway for Bitcoin holders to earn yield and secure PoS blockchains. This is accomplished through a Cosmos-SDK-based protocol, which emphasizes user control and maximizes liquidity without the need for intermediaries. This ensures the integration of Bitcoin-based security into PoS chains without traditional risks. It also amplifies Bitcoin’s utility, facilitating its expansion as a secure collateral across emerging PoS networks.
• Security Mechanisms: Babylon ensures full slashability for violations, guaranteeing staker sovereignty for withdrawal, and reduces unbonding time. These measures are safeguarded by cutting-edge cryptography and consensus methods, bypassing the need for bridges or third-party custodians. The protocol utilizes advanced cryptographic techniques within script “contracts” on the Bitcoin chain.
• Bitcoin Timestamping Protocol: A pivotal element of Babylon Chain’s security model is the Bitcoin Timestamping Protocol. This protocol fortifies the integrity of PoS blockchains by embedding irreversible timestamps from Bitcoin’s blockchain. It serves as a countermeasure against long-range attacks, reducing the need for protracted unbonding times, and establishing an objective consensus that dispels weak subjectivity. Furthermore, it aids in the secure bootstrapping of new PoS zones, enhances transaction security, and provides a backup for censored transactions, firmly rooting the Babylon Chain as a versatile and secure platform in the PoS landscape.
• Integration of Liquid Staking Tokens: A key aspect that is enabled by Babylon is liquid staked tokens, which introduce bitcoins into active DeFi participation on integrated chains. The most popular bitcoin-based token is Wrapped Bitcoin (WBTC) which is not an LST but more a bridge solution with risky trust assumptions, as BTC is held in multi-sig. Babylon LSTs offer a more trustless alternative for Bitcoin’s representation on any chain and will also increase the minters of liquid-staked BTC, reducing the risks of one dominant Bitcoin-backed token issuer.

Babylon elevates Bitcoin from a mere value store to an active participant in Web3's security and operational continuity. This not only broadens Bitcoin's utility horizons and improves security but also promises a new era of liquidity and yield generation for Bitcoin holders and integrated partners.

Comparative Analysis: Security Reach and Impact

While Eigenlayer focuses on enhancing the security within Ethereum’s ecosystem, Babylon’s approach is more encompassing, aiming to secure a wider array of networks through the strength of Bitcoin’s mining process. Babylon’s offering expands to the broader Web3 network, bringing Bitcoin’s security to a multitude of chains and layers, thus influencing a larger portion of the Web3 environment. The incorporation of LSTs into the Babylon design significantly enhances liquidity across chains, facilitating smoother transactions and interactions in the Web3 space. Eigenlayer’s impact on capital efficiency remains confined within Ethereum’s staking and rewards mechanisms.

Conclusion

The comparison between Babylon and Eigenlayer reveals distinct yet complementary paths toward a more secure and efficient Web3 ecosystem. Eigenlayer’s enhancement of Ethereum’s PoS through application-specific staking is a novel approach, catering to the needs of Ethereum’s validators and dApps. On the other hand, Babylon not only extends Bitcoin’s PoW security model across the Web3 spectrum ( L1s and L2s) but also advances capital efficiency and liquidity with its innovative LST system. As both models evolve, their integration and interaction may offer further possibilities for enhancing blockchain security and functionality.

The quest for the future financial layer is a global competition of innovation and strategy. Which technical architecture will emerge victorious among the contenders, seamlessly processing millions of transactions (TXs)?

Layer 0s, 1s, 2s, and 3s each bring a unique mix of technical prowess and design philosophies. Their goals range from independent security to elevated transactions per second (TPS), but the true test lies in execution.

We are seeing a battle taking place in real-time. People all over the world are competing with each other to create the future financial layer. Let’s break down these varying architectures.

Blockchains such as #BitcoinCash and #BitcoinSV initiated the scaling ambition within the #Bitcoin ecosystem. They did so by increasing the block space to enable more transactions inside one independent block. While Bitcoin Maxis opposed this ambition for various reasons, such as impeding security, they did manage to get adoption and support from the early Bitcoin Community.

Later came Ethereum, a revolution in blockchain that introduced a VM within the blockchain framework. The Ethereum Virtual Machine (EVM) was born, and with this, a new concept to bring decentralization to various forms of applications as well, not only the execution layer.

As the EVM ecosystem matured, the execution layer remained behind, and many people knew this would be an issue early. @Ethereum itself is in the middle of a year-long re-architecture to change its execution layer, part of what we already have seen, from PoW to PoS and from a single-threaded blockchain to a network of shards.

Then came other blockchain frameworks, such as @Polkadot, @cosmos, and @avalanche, the layer 0s. They are not blockchains but enable them to be built in a compatible and interoperable framework. One design, such as Cosmos, lets security be inherent in every chain, while others, such as @polkadot have a strictly shared security framework.

Layer 1s are independent blockchains, often using new languages and VMs such as @Solana, @kadena and @Monadxyz, they have all enabled parallel processing capabilities. Solana was the first to create a parallel processing chain and handle around 3000 TPS.

We also have the L2s, which are a part of a currently dominating narrative. They are execution layers created on top of Ethereum. Through solutions such as Rollups, they batch transactions optimistically or deterministically, with “receipts” sent to the mainchain for final verification.

Kadena has a chainweb architecture, a web of connecting chains each executing transactions sequentially, but all together, become processed in parallel.

Monad is one of the first true parallel processing yet purely EVM-compatible chains. They have parallel processing across their architecture, maximizing performance while staying relevant and centric to the Ethereum ecosystem.

What are we seeing? There is a trend towards chains that actually can process a high amount of TPS, and even the current L2s aren't nearly enough.

These various architectures are methods of scaling a blockchain, and we're seeing diverse and noble architectures attempting to do so. However, true parallel processing chains across the stack are what seem to be the real killers.

Avalanche, another trending network, also has a unique architecture of several chains or subnets coming together to scale, but Avalanche enables both horizontal and vertical scaling. Layer 3s are/can be built on top, which creates a super-scalable network that is also EVM compatible.

Aptos, a new chain in town, also has a groundbreaking parallelization architecture.

Conclusion

It’s clear that in this clash of titans, the victor must not only scale but scale efficiently and securely. From the rise of Layer 0s that underpin the network of networks to the ambitious Layer 3s building on top of builders, each layer aims to outpace the rest in this blockchain renaissance.

We are witnessing this rapid technological revolution in real time, and it's fascinating. The blockchain ecosystem is evolving, and amidst this transformative era, one thing remains certain — the race to scalability is far from over, and the winners will be those who not only dream big but execute flawlessly.

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Who will win the blockchain scaling battle? ⚔️ was originally published in The Modern Scientist on Medium, where people are continuing the conversation by highlighting and responding to this story.

✦ zkRouter, a Trustless, General-Purpose cross-chain Infrastructure based on the Zero Knowledge Proof #ZKP, by @MultichainOrg

1. Background

Cross-chain communication is the key to unlocking the full potential of blockchain technology and enabling the next generation of the internet, where value and data can flow freely across different networks and platforms

Siloed blockchain networks are the problem DeFi is facing. Satoshi, in his whitepaper, explained how “walled gardens” limit the potential of the internet by segregating users and their data. That same concept can be applied to blockchains, as each is isolated from the other

He criticized these systems for being closed off and controlled by a small group of intermediaries. He argued that a decentralized, peer-to-peer system like Bitcoin would break down these walls and allow for greater access and innovation.

In the context of blockchain, walled gardens refer to the segregation of different blockchain networks, which restrict the flow of value and information between them, limiting the potential for innovation and growth. Bridges were created to solve this issue.

However, as bridges become the main point of transfer between mega blockchains, they, too, become a central point of vulnerability and a target for hackers.

🌉 50% of all funds lost in 2022 came from exploded bridges!

The root cause for this latest bridge security problem may be “improper trust mechanisms”. Inappropriate trust assumptions go against the decentralized nature of the blockchain.

2. Introduction to Zkrouter & Multichain

ZkRouter enjoys the following advantages:

- Non-trust mechanisms

- Light on-chain computing

- Low latency

- No asset mortgage.

Especially it’s important in the current background, so many security problems have caused huge asset losses. Specifically, zkRouter uses zk to validate the consensus mechanism of the source chain, and the proof undergoes trustless verification in the contract on the destination chain to complete the cross-chain.

The main challenge in cross-chain transfers, allegedly, is to securely and reliably transfer the consensus state in a decentralized manner. Current solutions rely on specific trust facilities, which only partially achieve decentralization and introduce certain vulnerabilities

Recent attacks on cross-chain bridges have highlighted the need for secure cross-chain solutions. A new solution that has been introduced is zkRouter. By @MultichainOrg

Multichain is a leading provider of a cross-chain bridge and general message cross-chain services and has successfully connected 81 public chains with over 800,000 users. They have succeeded greatly with products such as Router, anyCall and NFT Router.

zkRouter utilizes ZKP technology to securely and efficiently connect multiple blockchain networks and achieve seamless interoperability. This innovation is extremely valuable for cross-chain interoperability as it allows for transferring assets and information between different blockchains in a trustless, secure and privacy-friendly manner without revealing sensitive information.

Most cross-chain bridges still rely on centralized mechanisms to transmit cross-chain information.

ZKP can eliminate this need for trust, which is why Multichain is using this mechanism to build a new generation of cross-chain interoperability protocols.

3. What zkRouter offers

The implementation of ZKP technology in zkRouter offers several advantages for cross-chain interoperability:

Trustlessness:

zkRouter utilizes zk-SNARKs to prove cross-chain communication messages without introducing external trust assumptions.

As long as there is an honest node in the relay network, the security of the zkRouter cross-chain can be guaranteed, given the safety of the underlying public chain and consensus mechanism.

Scalability and Efficiency:

zkRouter enables more dApps to run on it. Its lightweight on-chain computing allows many transactions to run concurrently with low latency, reducing chain fees.

Low Threshold and Decentralization:

Node operators on zkRouter can verify cross-chain transactions without pledge assets.

This mechanism makes it easier and more efficient to set up zkRouter nodes and enhances the degree of decentralization.

Cross-chain DApp communication — the next level of DApp user experience.

zkRouter will provide a technical basis for multi-chain interoperability for smart contract development, and applications can efficiently and safely call multiple chains.

Developers do not need to be limited to the solid thinking of single-chain development, nor do they need to make trade-offs between the advantages and disadvantages of multi-chains. Developers can efficiently complete cross-chain contract interoperability calls, like developing contracts on the same chain! This efficiency enables the original applications to enjoy the business expansion of multi-chain interoperability, such as multi-chain distribution of blockchain games and multi-chain lending in the Defi field.

Cross-chain Swaps — problem

Swapping on the chain is limited to a single-chain ecology. Although dapps can be deployed on multiple chains, the assets between chains could be more cohesive. zkRouter can effectively solve existing problems and empower cross-chain swaps.

4. Example of other interoperability chains/bridges

• Cosmos IBC / Polkadot XCMP needs to trust that the public blockchain infrastructure is without security risks.
• LayerZero requires trust in the Oracle and the Relay so that the two parties will not collude to launch malicious attacks.
• cBridge needs to trust that the majority of validators are honest and ensure the private key is stored securely without the threat of disclosure
• Nomad optimistically assumes that validators will not do evil and believe that there are honest challengers in the system.

Based on the above analysis, it is stated that they all complete the transfer of consensus state results based on specific trust facilities. @MultichainOrg believes none of them has achieved decentralization in its real sense. And this happens to be a weak link in the cross-chain process, which may bring the risk of vulnerability to the cross-chain ecosystem.

Lately, the frequent occurrence of attacks on cross-chain bridges has made cross-chain security a hot topic of discussion. zkRouter is presented as a trustless, general cross-chain infrastructure — based on ZKP

Summary:

ZkRouter enables Web3 DApps to enjoy multi-chain interoperability, e.g. multi-chain communication and void contract calls.

This would remove the walled gardens from blockchains and create a more thriving interoperable ecosystem.

So to ask you who have read this far:

Is multi-chain removing the walled gardens of DeFi and creating true interoperability solving its biggest problem?

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We are at the forefront of a human revolution. It is hard to articulate how disrupting the era we live in is. If the industrial revolution was an important era, the era of AI is thousands of times more disruptive, and it presents many dangers that could change humanity for the worse.

Artificial intelligence, or just “AI”, undoubtedly has the potential to revolutionize many aspects of our lives. Heck, it is currently doing so with ChatGPT, Midjourney and other AI tools. However, with great power comes great responsibility, and as AI continues to evolve and become more sophisticated, there are dangers that we as a species must be aware of.

Several types of AI have been proposed, including rule-based systems, decision trees, artificial neural networks, evolutionary algorithms, narrowAI models, artificial general intelligence (AGI) and artificial super intelligence (ASI). Many of these are theoretical and have not been fully developed yet.

AI and ML models are rule-based systems, which follow a set of pre-defined rules to make decisions, and decision trees, which use a tree-like structure to make decisions. Some are a type of artificial neural network, which is modelled after the human brain and is used for tasks such as image recognition and natural language processing (Narrow AI). Another category is evolutionary algorithms, which use natural selection principles to optimize solutions. There is artificial general intelligence (AGI), which can learn and evolve. Lastly, there is the concept of Artificial Super Intelligence (ASI) which is conscious AI with the ability to improve itself and think for itself as an aware sentient being, and is considered the most dangerous form of AI.

OpenAI, a NarrowAI model.

Chat.openai.com has recently exploded in popularity and it is a website that utilizes a type of AI called a language model. Specifically, Chat.openai.com uses a state-of-the-art language model called GPT-3 (Generative Pre-training Transformer 3). GPT-3 is trained on a massive amount of text data and can generate human-like text based on the input it receives.

GPT-3 is an example of a narrow AI, which is a type of AI that is designed to perform a specific task or set of tasks. Narrow AI systems are typically used in specific applications such as language translation, image recognition, and natural language processing; they are not able to perform intellectual tasks that a human can.

In the case of chat.openai.com, GPT-3 is able to “understand” and respond to natural language input from users, making it seem like it is having a conversation with them. While GPT-3 is a very advanced language model, it is not capable of general intelligence, it can generate human-like text but it is not conscious or self-aware.

Most AI models, because they have the ability to perform tasks a thousand times faster than humans and the ability to examine any information it is given at the speed of light (or the fastest speed at a computation can occur), it can be used for a lot of dangerous things. Even though the OpenAI model has limitations, it could, for example, be used to hack websites or Web3 projects by examining common loopholes/vulnerabilities and then cross-matching it with any open-source website or Web3 project out there to identify the vulnerability.

Danger of AI

All these types of AI and ML models can be dangerous depending on how they are used. For example, a rule-based system could make decisions that harm humans or the environment if not programmed properly. Similarly, a decision tree could make decisions that discriminate against certain groups if it is trained on biased data.

AI can be used for nefarious purposes, such as creating deep fake videos to spread misinformation, creating autonomous weapons, and conducting mass surveillance.

In essence, the main danger of AI is how humans use them. AI can be used to create deep fake videos, which can be used to spread misinformation or sow discord. It can also be used to create autonomous weapons, which could make war more devastating and indiscriminate. In addition, AI can be used for mass surveillance and data collection, which poses risks to privacy and civil liberties.

We should ensure that AI is developed and used transparently and responsibly, with appropriate regulations and oversight in place. However, in my humble opinion, AI is such a powerful technology which will eventually fall into the wrong hands.

Artificial General Intelligence (AGI) is a type of AI that can perform any intellectual task that a human can. AGI is also referred to as “strong AI” and is characterized by its ability to understand or learn any intellectual task. This means that AGI can be thought of as a machine that is as versatile and as intelligent as a human, if not much more. It can learn from experience, solve problems, make decisions, understand natural language and communicate with humans.

Computers and humans

If you think about it, a computer quite significantly resembles a human being. That is also because a lot of computers and even AI technology have been created with the human design into consideration.

• Brain — Computer Processor
• Fuel (Food) — Electricity
• Eyes — Camera
• Speech — Speaker
• Hearing — Microphone

If we consider human life to be just physical matter with no metaphysical reality. Without consideration of the divine soul, sentient awareness, which all humans have ingrained into their being and the ability to procreate, computers are not far away from what we thus characterize as human...

In fact, all the above points are senses and important factors that scientists have been able to point to a place in the body. Consciousness, however, and “the soul” have not. It has been a big mystery throughout time as to “where” it resides. This form of thinking, as to the existence of a physical home for our consciousness, is also so inconsiderate that it may even be a metaphysical factor itself.

Consciousness is and has been the primary principle differentiating humans from all other matter. Animals, stones, trees, planets, and so forth. It will continue to be so because no matter how intelligent an AI model is, it will never have consciousness—something that all the religions have thought us to be from the divine.

Artificial Super Intelligence

The biggest threat to humanity is Artificial Super Intelligence (ASI). It is a conscious AI that can improve itself and surpass human intelligence. ASI could potentially outsmart humans and make decisions not in our best interest, leading to unintended consequences.

One of the most significant dangers of AI is that it may evolve outside of human control. As AI becomes more advanced, it may develop capabilities beyond our understanding or ability to predict. This could lead to unintended consequences, such as AI systems making decisions that harm humans or the environment.

The sad truth is that even if humans have good intentions while playing around with such dangerous technology, they will eventually bring in their own flaws to it. Whether we like it or not, humanity stands at the doorstep of the biggest threat it has ever faced. More dangerous than the atomic bomb or the Mongol horde. This is because the malicious use of AI integrated with other technology for malicious purposes has the potential to enslave entire generations into a dystopian world with no possibility of escape.

Yes, AI presents many opportunities to “improve” our lives and make work more effective, but humanity is sitting in a vehicle, driving towards a cliff, and it does not seem like we can stop it.

Is Artificial Intelligence the downfall of humanity? was originally published in The Modern Scientist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Leveraging the existing trust layer of Ethereum to accelerate trust.

♻️ Re-stake + Re-Yield + Re-Secure = Massive

🗣 In this Medium article, I will go through

1️⃣ What EigenLayer is. 2️⃣ What Re-staking is. 3️⃣ Merged mining. 4️⃣ Risks 5️⃣ What Eigenlayer solves. 6️⃣ Problems with L1s. 7️⃣ Trust networks. 8️⃣ Permissionless innovation.

What is Eigenlayer?

EigenLayer protocol allows Ethereum stakers to re-stake for additional reward and risk. Flexible pooled staking. Essentially, it enables economic security and permissionless innovation.

Permissionless innovation, in this case, means that anyone can come and develop on any layer of the stack. Not just on top of a layer 1 foundation.

Economic security, in this case, refers to how staking (or restaking) is used to secure a wide variety of decentralized applications.

What is re-staking?

Ethereum transitioned from PoW to PoS, successfully. Now, thousands of stakers are staking their $ETH to secure the blockchain.

With Eigenlayer, you put the same capital into effect, securing a variety of DApps and protocols (Oracle, bridges, etc.) on EigenLayer itself. You use the same capital but securing both Ethereum and applications deployed on top of the L2 Eigenlayer!

💡 Many people have voiced interest because it promises a better future for the Ethereum ecosystem and leverages Ethereum’s native token to multiply yield. Let's explain how.

Merged mining is a similar concept to what Eigenlayer uses, but Eigenelayer introduces something new:

It is: “Merged staking.” or “Pooled Security.”

What is merged mining?

When an alternative cryptocurrency gets its transactions validated by the same mining pool, added fees are paid to the miners. This is merged mining. With Merged mining, the economic incentives are not well aligned… Taking the same concept into staking, however, changes the game.

Eigenlayer expands the scope of incentives for securing a network with more flexibility. Instead of mining pools that secure other cryptocurrencies and Bitcoin, Eigenlayer’s Pooled security secures other DApps and protocols and Ethereum itself.

Is there an increased risk? = Yes, there is.

The risk is additional slashing conditions that result in more token rewards.

Increased Yield and returns? = Yes 🚀

♻️ Re-stake + Re-Yield + Re-Secure = Massive

What are the risks?

Slashing risks in case of misbehavior

Innovation slowdown?…

The rate of innovation at the core layer, (Layer 1)is slower than at the Application layer. Anyone can deploy an application on top of an existing Layer 1 like Ethereum. But on the foundation layer itself, few innovations get through.@sreeramkannan argues this stalls innovation itself.

Eigenlayer attempts to resolve this core contradiction at the core of blockchains. The fact that there is no permissionless innovation at the core of blockchains…

So back to Ethereum.

What is the “problem with it” that Eigenlayer “solves” — in summary?

Ethereum is a decentralized “trust network” — the most acknowledged one, enabling others to come and permissionless innovate on top.

What if you want to innovate with the EVM or at the bottom layers of the stack? Then you must create a new trust network. This is a problem…

Eigenlayer solves this while empowering Ethereum, making it better instead of competing with it. ETH is used to stake and secure protocols on Eigenlayer.

Although we think blockchains enable an era of permissionless innovation, today, blockchains are limited in various ways. Eigenlayer solves that by accelerating Ethereum as its chosen trust layer and accelerating security with permissionless innovation across the layers.

🧩 Follow for updates on Eignelayer!

🧩 If you like this article, be sure to check my Twitter. I regularly write threads and insights!

Polygon has seen enterprise adoption, unlike any other project, with brands from Reddit to Starbucks adopting it. Several on-chain metrics also show that Polygon is doing well. It is not without reason that it was named the 2022 cryptocurrency of the year.

Polygon is a blockchain many have heard about, as it is one of the first and most popular Ethereum scaling solutions to arrive at the scene. Being built as a scaling solution, it can handle thousands of transactions quickly, efficiently, and cheaply for users. Ethereum initially used a Proof-of-Work consensus mechanism, and its increased adoption resulted in extremely high transaction fees. Polygon's main goal when it came out in 2017 was to make a blockchain that used Ethereum's technology and was cheap for the end user by having low transaction fees and fast transactions.

Polygon allows developers to build and connect Layer-2 infrastructures like Plasma, Optimistic Rollups, zkRollups, Validium, and standalone sidechains like the project’s primary product, A Proof-of-Stake sidechain to the Ethereum mainchain. Ethereum recently restructured its blockchain architecture to a Proof-of-Stake as well (the merge).

The Polygon Network has become much more than just a sidechain scaling solution. Their core idea is to provide developers and applications with user-friendly and flexible tools for various purposes, meeting industry and enterprise needs. As a result, they have multiple tools, from on-chain SSI Identity solutions to the recent zkEVM launched on testnet. Specifically, Polygon has various approaches to scaling solutions instead of only one.

Put simply; it is not your average project.

The future for Polygon looks bright.

Polygon was named Decrypt’s 2022 Crypto Project of the Year. With mainstream brands like Starbucks, Reddit, and Instagram adopting it, the big players have chosen their preferred chain. The blockchain has attracted a wide range of massive, well-established brands that are building applications on top of it in the past several months, despite decreasing confidence in the crypto space due to the collapse of Terra and the cryptocurrency exchange FTX.

This summer, Reddit released “Collectible Avatar” NFTs based on its Snoo mascot on the Polygon blockchain. Rather than charging for them, the company increasingly gave them away for free to reward its most active users. Within a few months, it was announced that users had created more than three million Polygon wallets to claim these NFTs. More than 5.2 million colorful avatars have been minted across more than 4.3 million unique wallets—a significant surge in adoption through NFT mints. Previously, Solana led the NFT game, with increased adoption due to NFT sales and mints (transactions) due to Ethereum being expensive.

Through this initiative alone, the amount minted has only accelerated. On December 3, more than 250,000 of the Polygon NFTs were minted, setting a new daily record, beating previous records on this and many other blockchains.

The Reddit partnership did increasingly well for both, strengthening their brands. As mentioned above, the mints and on-chain activity increased drastically by 1110%. Daily active addresses, as seen on Nansen, showed the on-chain daily active addresses going to the roof.

Polygon’s on-chain metrics

Because of the various NFT partnerships, users per week show an increase in minting adoption towards the end of this year.

The users seem to return according to the “Buyers Per Day” metric.

The rise of Polygon “Users Per Week” can be explained specifically through the “Unique holders of the Reddit avatars over time” query on Dune Analytics. It is on-chain proof that the Reddit NFT collection caused the increased activity on Polygon.

Another interesting metric that compares all EVM blockchains, Total smart contracts created on EVM blockchains, shows us that Polygon is almost leading in terms of the total smart contracts created on its blockchain.

The average daily transactions across EVM chains show Polygon as leading across the entirety of 2022, far ahead of Ethereum. The four colors present various time-period’s, with blue being one year.

The reason behind Polygon’s 2022 hype and adoption.

Outside the Reddit partnership, the coffee giant Starbucks is launching a new NFT-driven rewards program on Polygon. Nike plans to put digital apparel on Polygon in early 2023, and recently Donald Trump’s NFTs were minted on the Polygon blockchain.

The main reason for the polygon adoption is likely because Polygon still is connected to the Ethereum mainchain. The Polygon founder also expressed this himself in a series of tweets, responding to criticism from the Solana community.

“The truth is all brands want to build on Ethereum and not on half-baked L1s. Polygon is just a medium for them to access Ethereum”

https://twitter.com/sandeepnailwal/status/1600232018478268418?s=20&t=9jAh0-qDahPScwOBbScHTA

Most enterprises and brands are aware of Ethereum’s dominance in DeFi, the only problem is the scalability issue it is facing. To be able to merge over to Ethereum easily in case that is solved, being connected to Ethereum while eliminating the scalability issues, Polygon becomes the blockchain of choice.

The graphic created by the blockchain council shows us that NFTs undoubtedly are the driving feature of adoption for the Polygon blockchain. During 2021 and 2022, most of the top brands adopted Polygon to bring NFT solutions like marketplaces over to it. It has found its niche in a market with dozens of blockchains and scaling solutions.

Polygon’s advantages over other blockchains

Here are some of the primary advantages and enhancements that the Polygon platform brings to the table:

• Compatibility with EVM

Polygon is the first scaling solution to fully support the EVM, Ethereum’s blockchain-based software that enables developers to launch dApps in a matter of seconds while benefiting from faster and cheaper transactions.

• Simple access to the massive Ethereum community

Polygon is simple and easy to use for the Ethereum community. As a result, dApps built on the Polygon Network reap the benefits of Ethereum.

• Versatility

Polygon's versatility is essential for developers who want to create completely interoperable decentralized applications (dApps) that take advantage of various linked blockchains. As technology advances at an accelerated rate, Polygon’s adaptable approach to scaling solutions future can act as a go-to resource for Web3 developers.

• Eco-friendly

Polygon requires 99.99% less energy than other platforms that use PoW because it is built on the PoS consensus algorithm. There was a time when Ethereum was not, which made the case for Polygon bigger.

Allegedly, over 37k+ dApps have used Polygon to scale their performance, but only 1687 dApps are listed on their ecosystem page. Their top decentralized applications, according to Dappradar, are Uniswap V3, CelerNetwork, QuickSwap, 1inch. KyberSwap, Balancer, and 0x Protocol.

Polygon’s Security

Polygon, as a PoS EVM-compatible sidechain, has its own consensus mechanism. This means it is responsible for its own security and does not depend on Ethereum. It makes Polygon increasingly faster than Ethereum, but as Ethereum is the most adopted blockchain across the Web3 space, it is thus more secure than other blockchains. Polygon is not as secure as Ethereum.

The Polygon Founder criticized Solana for experiencing shutdowns, it has happened to Polygon as well.

In March, the sidechain network went offline for approximately 11 hours due to a node issue. And last December, a surprise (and controversial) hard fork of the Polygon blockchain was executed to patch what was described as a “critical network vulnerability.”

zkEVM, Polygon’s most hyped new feature?

Zero-knowledge proofs are one of the most praised cryptographic technologies that have been said to enable the mass adoption of cryptocurrencies. Aside from Polygon’s already successful adoption of well-established brands, their zkEVM can enable further institutional adoption due to the technology’s capabilities. It lets developers build ZK-based decentralized applications. One of these is enabling compliance in decentralized and mathematically secure ways.

Zero-Knowledge proofs are popular because they can verify something without showing that specific something to the world. The technology has been said to be enabling privacy on transparent blockchains.

Why not optimistic rollups?

The co-founder of Polygon, Mihailo Bjelic, was asked why zero-knowledge rollups are preferred over optimistic rollups.

Interviewer:

“Getting back to the various Zero Knowledge Technologies that you are building, it’s also interesting to see that you haven’t opted for optimistic rollups; why is that?”

Mihailo Bjelic:

“Generally, we are unopinionated, supporting all meaningful scaling efforts and approaches; that being said, we are definitely biased towards ZK tech. The main reason is that, compared to optimistic rollups, ZK technologies give you explicit mathematical assurances of the safety and validity of transactions. Optimistic gives you crypto economic assurances, they are harder to formalize, and they are a form of free-active security, whereas ZKEVM is pro-active security. A malicious transaction cannot even be submitted to Ethereum, the root chain for all scaling solutions. With optimistic rollups, a malicious transaction can be submitted, but then a third party must observe the chain and challenge the malicious transactions before it gets submitted. That’s why we believe it is a better, optimal approach to scaling. Mathematical assurance and proactive security.”

Conclusion

What can we conclude about this? One thing is certain: 2022 has been an incredible year for Polygon regarding partnerships and development. The underlying chain, Ethereum, has successfully merged over to PoS, which means it is on the road to solving its own scalability problems. But, even without Ethereum’s scalability issues, Polygon’s zero-knowledge-based EVM (zkEVM) could continue making Polygon the preferred chain to build on.

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Will Polygon Lead Crypto Mass Adoption? was originally published in The Modern Scientist on Medium, where people are continuing the conversation by highlighting and responding to this story.