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So far, as a public chain, Ethereum is playing the biggest role. However, it was judged that the blockchain was insufficient to process all transactions, so a Layer 2 chain and several public chains emerged. As more users rely on Ethereum, the fee increases excessively, and the transaction processing time is somewhat slow. As a result, there is a growing demand for an inexpensive and fast Layer 2 scaling solution.
Polygon is a Layer 2 extension solution with the goal of improving the functionality of the Ethereum blockchain by increasing network scalability and overall transaction speed.
Last December, Polygon implemented Ethereum's EIP-1599 update on the Mumbai testnet, introducing a fee burn system for its own token, MATIC. It also peaked on an uptrend with high market interest in Web3 as Polygon is known to aim to empower developers to build Web3 applications by providing developers with Ethereum scaling solutions. Polygon was founded by Polygon Technologies, a software company based in India, and Polygon is developed by a non-profit organization called the Matic Foundation. The whereabout of the Polygon Foundation is unknown.
Can Polygon be the Ethereum Killer?
If you look at the daily transaction chart, Polygon generated about 8 million transactions in December last year, but is now down to about 2 million transactions. As such, it appears that the trading volume is greatly reduced. This may stem from competition from other Layer 2s such as Arbitrum and Optimism. They are also accumulating billions of dollars on TVL through chain consolidation. Last August, there was the biggest hack in DeFi history. Critical bugs in Plasma Bridge resulted in $611 million stolen in hacks. Fortunately, the entire hacking stolen funds were recovered, and the stolen hacker was paid $2 million as compensation to the white hacker. It seems that they are realizing the importance of security by implementing a bug bounty program as a delayed response due to hacking. Polygon’s 100 validators do not actually process transactions on the Polygon PoS Chain. Polygon's smart contract management private key can be controlled by a consensus of 5 or more out of 8 multi-signature contracts. Four of them are owned by Polygon's founders. With the exception of the team-owned 4 private keys, the 4 owners are also selected by the Polygon team, and Cyber Capital CIO Justin Bons pointed out that “Polygons are not secure and there are centralization issues.” With relative centralization, Polygon It can handle up to 65,000 transactions per second (TPS), but Polygon's documentation states that Polygon can currently handle between 1 and 10,000 TPS.
Polygon has emerged as a clear leader in Ethereum Layer 2, and has achieved remarkable results over the past year. But with TVLs continuing to decline, centralized signatures, and multiple rivals, I wonder if we are falling behind.
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