Low gas fees and connecting to real-world demands are very important.
Written by: Haotian
I've seen many people discussing whether @Polymarket belongs to the Ethereum ecosystem. In fact, this is not important at all. Many people are just frustrated that such a standout super application during the Trump election did not stimulate or catalyze Ethereum. We are so eager for a phenomenal application to invigorate the entire Ethereum ecosystem! Next, let me share my thoughts:
1) @VitalikButerin has praised Polymarket multiple times. For him, who is overly anxious about the financialization of DeFi, it's hard not to like Polymarket, an application that links on-chain funding bets with real-world prediction scenarios.
Although one might argue that Polymarket is also a 'super casino', what it essentially undertakes are real-world prediction demands in sports, politics, entertainment, policy, science, and other fields. Polymarket does not provide such 'gambling' scenarios. These huge demands can also be engaged offline through entertainment methods like betting, gambling, futures, and quiz games.
Polymarket integrates these dispersed prediction demands and connects them to Crypto assets, constructing a brand new platform for these 'demands' with blockchain technology's fairness, transparency, and verifiability. Doesn't this align perfectly with the vision of blockchain technology empowering the real world?
This is fundamentally different from the yield models like 'mining, issuing tokens, liquidity pools, arbitrage, Staking, Restaking, and governance' that have been popular in DeFi for a while.
Although there is a 'gambling' component in both, the consumption scenarios provided by Polymarket are broader, the user base is larger, and the resource sourcing and sustainability are stronger.
Vitalik wishes that the DeFi of the Ethereum ecosystem could break the pure on-chain PVP loop like Polymarket, connecting real-world funds and users.
2) As for whether Polymarket belongs to the Ethereum ecosystem, I don't want to draw a conclusion. From the perspective of technical neutrality, Polymarket is built on the Polygon chain, consuming gas in Matic ($POL), and it doesn't even use Polygon zkEVM, which is viewed as an Ethereum layer 2. Calling it a super application of the Ethereum ecosystem is somewhat forced. In the context of the overall poor performance of Ethereum ecosystem applications, such a label seems too strained and overly flattering.
However, to be fair, Polymarket launched as early as 2020, when mainstream L2 solutions like Arbitrum, Optimism, and Starknet were still in their infancy, and Ethereum DeFi and NFTs were successively booming. The Ethereum Gas fees have been congested, and if Polymarket had really chosen Ethereum, it might have been as lukewarm as Augur. It has been proven that Ethereum's basic infrastructure could not support a super application like Polymarket in that context.
3) In my opinion, the explosive popularity of Polymarket at least offers some inspiration to the Ethereum ecosystem:
1. Low gas fees are important. The overall direction of Ethereum's layer 2 strategy is correct; it only lacks applications like Polymarket being born on layer 2.
2. Connecting to real-world demands is very important. The purely on-chain DeFi model in Crypto has completed a cycle, and it has been proven to be very difficult to achieve a breakout super application. How Ethereum can break through the dilemma of being purely on-chain and connect to larger and broader off-chain demands and scenarios is a challenging problem that must be solved. Success comes from DeFi, but it cannot be limited to DeFi;
3. Tokenomics that can stimulate token prices are also very important. It seems that Polymarket's breakout has not brought significant benefits to Polygon, as seen in the price of $POL. Although it is harsh, this is indeed a fact. If the design of the super application model does not pay sufficient attention to Tokenomics design, even if such an application emerges on Ethereum layer 2, it is likely to have no direct relationship with Ethereum's token price.
4) Many people complain that Ethereum's infrastructure > application is a problem, but in fact, the issue with Ethereum's infrastructure is not that there is too much, but rather that it has not transitioned from quantitative change to qualitative change. When an infrastructure that can accommodate more applications of traditional internet business scenarios appears, then TPS, parallel processing, large-scale handling, and low gas fees will all become common capabilities of infrastructure. Only then will the infrastructure truly mature and pave the way for the birth of potential 'super applications'.
The issue isn't simply about 'applications'. I can only say that similar 'x to Earn' applications are all short-term experimental applications built based on the current infrastructure limitations. The emergence of such applications ensures a short lifecycle. In fact, there has never been a shortage of such applications. To attract larger-scale and more real-world-connected super applications, infrastructure like modularization and chain abstraction must continue to be built and expanded. This may seem counterintuitive, but it is indeed the case.
Fortunately, Polymarket's success has provided a successful model for the Crypto ecosystem market. Its success in application, not reflected in token prices, has taught the Crypto world a valuable lesson. Coupled with Trump's election, which provided the Crypto market with a huge gain buff, under such circumstances, we should remain optimistic, give the market more time to brew and cultivate, and believe that everything will turn out well.
