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Ep 69 : Layer 2 Scaling Solutions on Polygon
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What is Polygon?
Polygon leverage Ethereum’s virtual machine to create transactions at a cheaper rate and at a faster pace. Because of the limited block space that Ethereum has and the number of transactions that people want to do, the biggest challenges that the people face are high fees. Polygon enters to increase the number of transactions per block using various scaling solutions.
In order to boost transactions, Polygon offers a few solutions. For example, one of these solutions is to use the plasma layer where they enable the products or the platforms which have onboarded them to do the transactions at a slightly cheaper rate such as $0.01 or less. They are one of the cheapest layers where transactions can be done.
Layer 2 Scaling Solutions:
Plasma Layer and Sidechain (POS)
The plasma layer is where you bundle up transactions and put them forward, but you cannot do complex transactions using smart contracts. This is where a sidechain comes into the picture. A sidechain can handle the complex transactions of smart contracts and those smart contracts can be run very easily and faster on the sidechains. Doing transactions on the plasma layer is a tedious task and if you try and do a lot then your speed is going to reduce. Apart from this, the plasma layer and a sidechain do the same thing of bundling of transactions and putting a snapshot on the main Ethereum chain thereby saving the block space on the Ethereum chain and enabling lower costs and higher speed.
Plasma chain is a straightforward solution of bundling, uploading, and adding to the system, whereas sidechain is a more specific and technical chain on its own.
ZK means Zero-Knowledge. It's part of cryptography.
ZK-rollups send transactions using a cryptographic verification method called Zero-Knowledge Proof. It is a way for different parties to prove to each other that they have specific information without having to disclose the details of what it is. A great advantage of this is that this process can happen almost instantly, and there is virtually no chance for corrupted state submissions.
ZK-Rollups vs Polygon’s other scaling solutions
Proof of stake (PoS) and plasma chain are where we bundle all the different transactions. This is kind of like putting them into a zip file and uploading them to the main chain. These can be quite huge because there are a lot of different details in every single transaction.
ZK-rollups use a different kind of technology. This technology has been in existence since the 1990s and is not new to the blockchain. It helps to reduce the load and the amount of data because you can remove some of the unnecessary things. We just need the best proxy to show that you have done this transaction and that this transaction is validated, approved, and successful. Instead of going out and divulging the data you just do some mathematical calculations and bundle up the transactions. You do not send the transactions but rather just send the proof that a transaction is true.
How do ZK-Rollups Bring More Value to Polygon Users Compared to its Other Solutions?
All these different layer 2 scaling solutions work but with different kinds of trade-offs or considerations in mind. The reason they exist is that they are slightly different from one another. One of the benefits of zero-knowledge is that it is very heavily focused on privacy. This privacy feature applied to the scaling solution becomes very important for enterprises to be able to come in and use public blockchains. Enterprises can always use their private blockchains but if they are to interact with public chains then there needs to be more focus on privacy.
What can we expect from Polygon in 2022?
The biggest things happening in the Polygon ecosystem are:
The first thing is the NFT world or the gaming world. If you see the stats of Opensea you can see that they have already surpassed the number of NFTs being sold and traded on the Opensea for Ethereum, so that is going to blow up even more.
The second thing is enterprise onboarding. Imagine the already established business world adopting Polygon for its zero-knowledge-proof solutions. The users of those platforms will also onboard Polygon automatically because the transactions are happening on Polygon, so there will be many more users coming in via enterprise.
The third thing is the DeFi world. A lot of DeFi solutions have already been built on Polygon. Recently they went live on Uniswap and some other blue-chip protocols are also going to be live there very soon, so a lot of transactions that were happening in Ethereum or a lot of users who were in Ethereum but were not able to use it, will be unleashed. This will lead to increased numbers of people and transactions and more efficiency being added into the system.
PoS or the sidechain and plasma chain are both good layer 2 scaling solutions. Polygon has gone one step further by adding ZK-rollups which focus heavily on privacy. These layer 2 solutions bundle up the transactions and just upload the proof of transaction onto the main chain. The ZK-rollup privacy feature is very important to attract enterprises onto public blockchains.