Will Ethereum 2.0 Destroy Polygon and other Layer 2 Solutions?

with the ethereum hard fork happening i've been thinking about how ethereum 2.0 might affect layer 2 scaling solutions like polygon in the long run to start out i'll give some main points then we'll dive into the meat of it oh by the way this video contains a way to win a trading bonus so if you're interested keep watching and find out how polygon previously matic network is an infrastructure solution designed for ethereum scaling ethereum has suffered from congestion and high transaction or gas fees for a long time and polygon to help solve this problem polygon's technology moves ethereum d-apps onto a system of connected blockchains that aim to retain the ethereum network's security and ecosystem advantages polygon success is built on the network's partnerships increasing adoption from high profile projects and high availability across traditional crypto exchanges and daxes the london hard fork implements upgrades on ethereum aimed at keeping gas costs low during times of congestion but this is only one small part of ethereum 2.0 which is aimed at drastically scaling [Music] ethereum [Music] let's first dig into the basics of polygon to get a foundation then look at ethereum's current problems and future solutions in order to make a more educated prediction about the future of both projects in terms of both decentralized apps or d-apps development and adoption no blockchain has been more successful than ethereum but the ethereum network still contains several major bottlenecks hindering its scalability and usability we've all heard about ethereum 2.0 and are excited to see the results of the london hard fork all of which propose to drastically improve ethereum yet many users already enjoy and improved ethereum by using layer 2 solutions like polygon so let's check out the basics of polygon and see if it's likely to maintain its position in the crypto space as ethereum gets upgraded as we just established in order to continue scaling many projects are exploring ethereum compatible blockchains that mitigate ethereum's limitations without moving away from the network a key issue has been lack of specialized framework to build such blockchains and no protocol that can connect them this leads to a complicated development process and poses the risk of ecosystem fragmentation therefore polygon or previously matic is a layer 2 solution with sharding support that seeks to facilitate mass blockchain project adoption through side chains to offer 65000 tps and two second block confirmation times polygons technology moves ethereum d-apps onto a system of connected blockchains that retain the ethereum network security and ecosystem advantages in addition to scalability polygon aims to improve the developer experience with a permissionless design full tech sovereignty and modular security solutions normal users also benefit from low gas fees and instant transactions as well as full compatibility with ethereum tools such as metamask polygon blockchains boast high levels of interoperability and can communicate both amongst themselves and with the theorem network the solutions tech stack is currently made up of two major types of blockchain networks secured chains and standalone chains the polygon team is also open to adding all kinds of scalability solutions to their network such as roll-ups real quick what does polygon do the rapid and loafy nature of the polygon ecosystem has attracted significant interest from developers that have suffered under ethereum's periodically high gas fees in particular polygon has been adopted by a number of high profile defy decentralized exchange and crypto gaming applications i'll give a couple of examples to give you an idea of polygon use cases one of the most successful d-apps built on polygon technology is poly market this non-custodial and decentralized prediction market allows users to speculate on the outcome of real world events such as elections or football matches like many dex applications handling large volumes of transactions while avoiding congestion on the ethereum network is a running concern for poly market by building onto polygon side chains the prediction market managed to offer users lower fees and faster settlement without compromising on security or decentralization next we have polygon and avi polygon also entered into a partnership with avi a leading d5 protocol for lending and borrowing on the ethereum blockchain to address the congestion issues caused by increased adoption ceo and founder stani kulichov noted that the protocol's availability was still largely limited to users with five figure portfolios ave is seeking to expand accessibility by offering lower gas fees through smart contract bridge that allows users to seamlessly move assets onto polygon side chains according to the ave team polygon was selected for its security and its modular nature which allows for high interoperability with other d-apps that integrate with avi another area of adoption has been crypto-collectible games such as avagochi which integrates defy and non-fungible tokens nfts in a unique way this game allows users to stake their avatars called avigochis which are valued by factors such as attributes collateral wearables and rarity with interest generating tokens on the game's metaverse a metaverse which includes mini-games governments events and integrated nft marketplace as such one of the key concerns for the avigochi team was selecting a scaling solution that offered sufficient decentralization security and evm compatibility much like with defy applications avigochi noted polygon's high interop ability which it hoped to take advantage of by integrating with other nftd apps other major players such as sushi swap easy fit a fork of the compound aam and decentraland or mana have also deployed their smart contracts onto polygon side chains these deployments help them improve user experience and ensure sustainable operations on the ethereum network polygons interoperability has been a major selling point for developers because utilizing polygon side chains allows them to provide value to users through other d-apps this creates a virtuous cycle that attracts applications through interoperability which in turn creates greater incentives for other applications to join in the ecosystem therefore polygon is well positioned to ride the wave of growth the d5 dex and nft dfs are experiencing as volume increases and more ethereum projects look toward low gas and scalable solutions polygon is excellently positioned to enjoy continued rapid expansion and a better ethereum means an even better polygon until it doesn't to get a judgment about whether or not polygon is in danger of becoming obsolete with a rollout of ethereum 2.0 we need some more information about a 3d room 2.0 ethereum 2.0 is coming out in stages the timeline slower than anyone wants it to be the first installment that rolled out was the beacon chain which is necessary to set up early on but doesn't do much until later upgrades are introduced the big thing going on right now is the london hard fork in eip-1559 which as you may have heard is focused on improving the gas fee mechanism by changing the bidding system to a system with a base fee and an inclusion fee the base fee will be set automatically by the ethereum network to adjust for current traffic and the inclusion fee is what the user can add to incentivize the miners but the miners will only get the incentive fee while the base fee will be burned the london hard fork may be exciting but is it going to make polygon obsolete no almost definitely not its intended scope of improvement is marginal and focused mostly on gas fees it does little to increase transaction speed ethereum has already rolled out the proof of stake chain outside of the main net but both are connected to the beacon chain which will help facilitate the merge later on down the road not only does the move from proof of stake make ethereum more environmentally friendly it also allows for the implementation of further upgrades most notably sharding the shardy chains are projected to be rolled out in 2022 but those who have been following ethereum closely expect delays sharding is one of the ways polygon already achieves its higher performance so the question of the day is whether or not ethereum sharding will improve the network to such a degree as to make polygon obsolete polygon co-founder sandeep naiwa confidently stated that ethereum 2.0 scaling won't match the increase in demand it causes because according to him implementing 64 sard chains will basically translate to 64 x scalability however if you listen to vitalik buterin simply implementing rollups a way of securely processing smart contracts off chain and rolling the necessary information back on chain could already scale ethereum efficiency by 100x and adding the shards on top of that could potentially bring the ethereum network to processing a hundred thousand transactions per second or more compared with the current 30-ish transactions per second the plans for ethereum 2.0 certainly sounds dire for polygon and similar layer 2 projects however nothing is set in stone and we won't really know how much ethereum can scale until it does so polygon on the other hand is already providing a solution for scaling that is tied directly to ethereum and has therefore gained a significant number of developers making innovative and successful projects so from my personal perspective not necessarily the views of phoenix mind you polygon is likely to benefit from ethereum upgrades in the short to medium term because as ethereum becomes even more functional more developers will build on it more users will come and the functionality may not immediately address the increased number of throughput this gives polygon time to focus their efforts and we can see that they have an experienced and hard working team that is certainly considering what an exponentially more efficient ethereum would mean for them it's reasonable to suppose that the team behind polygon will pay close attention to the areas where their solution will continue to be useful long term there certainly seems to be some risk of a superpowered ethereum 2.0 making polygon obsolete but the same principle i just stated may continue to apply even if ethereum scales by 30 000 times or more such an upgrade will inevitably draw in tons more use cases and as developers continue to think of creative new uses for smart contracts and web 3.0 some of these uses might require functionality that isn't even available on a super powered ethereum if this happens and polygon is able to identify these areas and provide a solution then they certainly have potential to maintain their position in the space again this is my personal perspective and there's no shortage of people who know more about these topics than i do if you think you're such a person and have some comment or perspective to add please let me know in the comments and leave your femecs uid i'll pick the most insightful three comments and send a 20 trading bonus to each lastly it's important to note that other competitors to polygon are definitely worth considering if you're trying to decide with which project to back but that's a subject to beg to add into one video so for this video we only focused on polygon versus the changes with ethereum 2.0 so guys the crypto space is huge complicated and evolving at a breakneck pace if you want to learn more about crypto and trading check out our other videos and academy articles and if you found this video helpful don't forget to thanks for watching see you next time if you don't have a femex account yet just click on the link in the description or scan the qr code on the screen create a femex account and you will get a 7 day free premium membership trial and other trading bonuses to learn more about femex and cryptocurrencies watch the videos on the box on the left and if you're new to the crypto world have a look at the videos on the right for some of phoenix's user tutorials you

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