Polygon Labs has initiated the transition to its updated version, Polygon 2.0, by releasing three inaugural improvement proposals on Thursday. The proposals will set the stage for a scaling ecosystem composed of four protocol layers: staking, interop, execution, and proving. These layers are designed to foster an interconnected ecosystem of chains that facilitate rapid value transfer and information sharing.
The firm first introduced Polygon 2.0 in June 2023 with the vision of an interconnected layer 2 Ethereum ecosystem powered by zero-knowledge cryptography. Co-founder Sandeep Nailwal explained that the ecosystem aims to become the value layer of the internet, utilizing zero-knowledge technology to provide a low fee, high throughput performance for the broader Ethereum ecosystem.
The three Polygon Improvement Proposals (PIPs) released on Wednesday are up for community consideration and voting, which are slated to begin in the final quarter of 2023. These PIPs detail "Phase 0" of establishing a network of interconnected ZK-powered layer 2 chains that scale Ethereum.
One significant proposal includes transitioning MATIC tokens into SOL tokens, which will become the native token of Polygon's Proof-of-Stake (PoS) protocol. PIP-17 details this upgrade from MATIC to POL, including its adoption as the native gas and staking token for the Polygon ecosystem, alongside launching the staking layer and migration of Polygon public chains.
PIP-18 provides a technical description of POL tokens and contracts handling emission and token migrations. It specifies that POL tokens can be migrated at a one-to-one ratio from existing MATIC tokens, with an initial supply of 10 billion and yearly emission of 2% equally distributed between validator staking rewards and a community treasury.
Finally, PIP-19 proposes updating the native gas token on Polygon PoS from MATIC to POL while ensuring maximum backwards compatibility. Polygon's announcement assures that PIP-19 will not alter contracts on Polygon PoS, and the properties of the protocol's native token will remain unchanged. However, contracts on Ethereum awaiting MATIC from the native MATIC bridge may be affected by the upgrade.
Polygon's decision to replace the MATIC token with POL came under scrutiny as the U.S. Securities and Exchange Commission (SEC) classified MATIC as an unregistered security in June. However, Polygon clarified that its decision was unrelated to the SEC's classification and stated that MATIC was developed outside the U.S., playing a crucial role in ensuring the security of the Polygon network.
The full transition to Polygon 2.0 is expected to take place in 2024.
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