With Ethereum’s switch to proof of stake (PoS) slated for mid-September, we thought it would be appropriate to take a moment and look around, to admire how far Web3 has come. Now is a time to celebrate the builders and dreamers who’ve worked relentlessly on the margins to summon a more open, decentralized, and equitable web.
The Polygon companies’ founding team came together under a uniting vision to make Web3 accessible to all and scale the publicly owned infrastructure of Ethereum. We are Ethereum fanatics who’ve been in this space for years. We believe this is the best shot we have at creating a new, decentralized web, where creators and users capture more of the value they create.
On the eve of the merge, you might be able to tell we’re kind of–okay, more than kind of–we’re extremely, unbelievably, falling-out-of-our seats excited by Ethereum’s upcoming transition to PoS, a mechanism Polygon has been using for years.
But with all eyes on Ethereum, we’ve also been fielding a lot of questions about what Ethereum’s switch of consensus to PoS means for Polygon. How will the merge affect Polygon?
The short answer: the merge is only good news for Polygon.
The slightly longer answer: the merge means Ethereum will be more environmentally friendly, like us. But it will not lower Ethereum's gas fees or increase its speed. In fact, the network depends on Polygon and other Layer 2 solutions to solve for this.
To quote from the Ethereum Foundation: “The Ethereum ecosystem is firmly aligned that Layer 2 scaling is the only way to solve the scalability trilemma while remaining decentralized and secure.”
The merge prepares Ethereum for future upgrades, like sharding, that will help it grow and scale. But as Ethereum grows, Polygon should as well. Every improvement made to Ethereum, as a settlement layer, magnifies the power of Polygon.
The merge fixes the massive carbon footprint of Ethereum, arguably beefing up Ethereum’s security, and reducing ETH inflation. Polygon gains from Ethereum’s improved security and general growth to the ecosystem–even while Ethereum massively gains from the Polygon companies’ suite of scaling solutions, like the recently announced Polygon zkEVM.
So proof of stake changes the narrative: Ethereum is now like Polygon, a significantly more environmentally-friendly network.
This post will be your definitive walkthrough that explains the switch to PoS at a high level. You’ll learn why Polygon will only be more crucial to the well-being of the greater Ethereum ecosystem going forward.
Big picture: the merge is a transition in how Ethereum’s decentralized network achieves consensus, from proof of work (PoW) to proof of stake.
Upgrading the network has been split into two steps: the creation of a parallel PoS chain in December 2020, named the Beacon Chain, and the upcoming, mid-September “merge” of the Beacon Chain with the existing network.
The reason for the two-step approach is security. Ethereum developers have spent the last 20 months stress testing the Beacon Chain, rehearsing the merge on testnets and shadow forks. They have stomped out bugs in the code, and barring some unforeseen circumstance, when the Beacon Chain merges in September, Ethereum will have successfully pulled off the most technologically advanced upgrade in its history.
Right now, Ethereum relies on proof of work to secure the network, validate data, and store it on the blockchain. A decentralized, distributed network of miners expends massive amounts of energy attempting to be the first to solve tricky math problems in order to publish new blocks. They receive transaction fees and rewards for doing so.
Like Bitcoin, Ethereum’s PoW consensus algorithm incentivizes a decentralized network. But PoW does this by essentially exchanging electricity (work) for value (ETH).
The switch to PoS will shrink Ethereum’s energy consumption by ~99.95%, in addition to improving security against coordinated attacks, and increasing the network’s decentralization. Ethereum becomes future-proof, just like Polygon, in a global moment when cutting back CO2 matters more than ever before. The merge lines up with our Green Manifesto, and our commitment to becoming a carbon negative chain by the end of 2022.
Instead of relying on the amount of energy miners use, PoS relies on validators.
To become a validator, 32 ETH must be locked up in a smart contract as “stake,” a bit like depositing ETH into a vault. Validators propose and vote on data that are published to the network, ensuring the validity of each block. Security now depends on the total amount of ETH staked, rather than the amount of energy produced by mining rigs. Currently, almost 14 million ETH has been staked by over 413,000 validators, who are rewarded for securing the network. Anyone with any amount of ETH can contribute to security (through staking pools), and receive a portion of rewards from their validator to do so.
This is all great news, and lays the foundation for Ethereum’s next phase, the surge, with upgrades like sharding.
But we’re not there yet. And even when Ethereum does increase network capacity in the future, it will only amplify Polygon in parallel–helping Polygon become the go-to transaction layer for users and builders.
What’s next for Ethereum, and for Polygon?
Ethereum’s roadmap describes a vision of the network becoming a settlement layer for Layer 2 solutions like Polygon. The core developers of Ethereum see it as the foundation on which L2s will draw their security, and transactions will be posted.
Any growth in the settlement layer only magnifies Polygon’s goodness: the speed, lower transaction fees, and ease of use that help make Web3 a reality.
The future of Polygon and Ethereum is symbiotic. With the recent Polygon zkEVM breakthrough, we’ve developed bleeding edge technology that will process transactions at dramatically reduced costs and increased speeds–necessary to onboard a billion users to the Ethereum ecosystem.
So after we celebrate, it’s back to work. We’re hyper focused to become the fastest, most secure destination for users, builders, and dApp developers in the world.
We’re going to bring the world to Ethereum!
*Note: Unless otherwise noted, “Polygon” refers to the decentralized, publicly owned network.
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