The options for layer-2 scaling are expanding as Polygon launches its long-awaited zkEVM technology on Ethereum mainnet today.

The zero-knowledge Ethereum Virtual Machine is a technology that can execute smart contract transactions in a way that can prove the information is executed correctly without revealing the information itself on Ethereum’s mainnet, thereby bundling more transactions in less mainnet blockspace.

Sandeep Nailwal, the co-founder and chief operating officer of Polygon, told Blockworks this type of technology is considered the “holy grail of scaling.”

“With the power of mathematics…you can compute something off-chain on layer-2, then verify everything back on Ethereum in a very succinct way in a very short amount of time,” Nailwal said.

Polygon’s launch on Ethereum comes just days after Matter Labs zkSync Era opened to the public on Ethereum mainnet.

Similar to zkSync’s offering, most of the Polygon zkEVM’s code is open-source, but under an AGPL v3 license.

“That means that not only current repositories, but all future modifications and distributions as well, will remain open source, ensuring the code cannot be used for proprietary purposes,” Nailwal said.

The exception is the Polygon zkEVM prover, for which an open-source license has not been selected at time of publication.

Nailwal notes that Polygon zkEVM is EVM equivalent, whereas zkSync’s offering is EVM compatible.

According to the framework laid out by Ethereum co-founder Vitalik Buterin in August 2022, zkSync Era is classified as a “Type-4 (high-level-language equivalent),” and there are advantages and disadvantages of various approaches to bringing the EVM to a zero-knowledge rollup. The merits of various tradeoffs are an ongoing topic of debate.

Like zkSync Era, and the current crop of optimistic rollups, the Polygon zkEVM is not yet decentralized, but eventually, Nailwal hopes that Polygon’s new offering will take that step.

“Everything is in the hands of the community,” he said.

Security comes first

In addition to three internal audits, Nailwal notes that Polygon’s zkEVM has also gone through two rounds of external security audits from blockchain cybersecurity companies Hexens and Spearbit.

Ongoing, continuous audits are expected for the next three to four months following mainnet launch and a multi-million dollar bounty program will also be in place, he said.

The emphasis on security was also central to zkSync Era’s mainnet release, but Polygon said that Matter Labs had shared audits that cover their smart contracts and sequencer, not their prover.

“This raises serious questions about security, at least until a full audit is released. The prover for Polygon zkEVM, meanwhile, has been audited, and is open-source,” Brendan Farmer, Polygon Zero co-founder, told Blockworks.

A spokesperson for zkSync told Blockworks that the prover had been audited by Halborn Security, and pointed to the blockchain’s documentation, which notes that a recently completed review has not yet been published.

Even conscientious security measures can leave gaps, however, and Nailwal notes that he does not wish users to bring millions of dollars to the zkEVM immediately.

“Zk is new technology…so we [want] people [to be] as cautious as possible,” he said.

Drawing on the example of the recent Euler Finance attacks, Nailwal cautioned that interacting with smart contracts is not without risk.

“Euler, after running for two years, a bug was found — this can happen any day, on any smart contract-based application.” he said.

ZkEVMs are sure to be compared to their optimistic rollup counterparts — the most successful to-date being Optimism and Arbitrum.

“Arbitrum took one and a half years before people actually started bringing in money,” Nailwal said. “So we don’t expect people to bring a lot of money [initially].”

#ARBITRUM #POLYGON #ETH #Binance #crypto2023

Ethereum (ETH) as a Layer 1 protocol is gaining a lot of hype today, and this hype has been transferred to the Layer 2 protocols resident on it. For everyone following events in the crypto ecosystem, Ethereum-based L2s like Optimism (OP) and Arbitrum (ARB) have been making waves. However, new data from Messari has shown that the latter is outpacing the former in key metrics.

The Messari comment hinges on the fact that new protocols are known to be a major creator of wealth that generally serves as an attractive offering to members of their community. Messari noted that new tokens can be issued through which many early participants get to benefit at the time of launch.

As #Ethereum’s L2s continue to gain momentum, there has been an accelerated adoption of native protocols. A main driver of this trend has been the wealth effect that new protocols can create. They can issue new tokens and distribute them to users, generating positive sentiment. pic.twitter.com/NPNTwz6xUp

— Messari (@MessariCrypto) March 28, 2023

According to the accompanying charts shared, Arbitrum's native applications recorded higher retention rates than those of Optimism. In particular, Arbitrum surpassed Optimism in terms of the ecosystem benchmark as well as network application coverage, among others.

Arbitrum released its airdrop for the ARB last week, giving many early backers and testnet users free tokens that were later sold for cash on exchanges that have listed the token since it went live.

Mixed Arbitrum momentum

As a Layer 2 protocol, Arbitrum aims to bring immense scalability solutions to Ethereum using the optimistic rollups technology. Arbitrum has been building its ecosystem for a while and has recorded a number of significant milestones in terms of broader adoption.

As reported by U.Today, the Shiba Inu meme coin version on Arbitrum, dubbed ArbInu, has been recording massive buying momentum in what appears to be significant momentum compared to the bigger meme coin.

Besides the positive updates, Arbitrum also suffered from cybercriminals perpetrating a shift in its network and community stability when its Discord server was compromised a few days ago.

Arbitrum is the new sensation, bringing the fight directly to other competing L2s on Ethereum.

#ARBITRUM #ARB #ETH #Ethereum #Binance

The Arbitrum Foundation has clarified that Arbitrum Improvement Proposal (AIP-1) is merely a “ratification,” and that it has already sold governance tokens for fiat — causing many to question the Ethereum Layer 2’s supposedly decentralized governance structure.

Questions are being asked on a Sunday regarding Arbitrum's governance after its centralized, self-titled foundation sold ARB tokens before the conclusion of a key governance vote, rendering the democratic process essentially moot.

The "special grants" program sees the Arbitrum Foundation receiving 750 million ARB governance tokens — worth nearly $1 billion — to spend without the expressed approval of token holders.

Rebranding the keystone Arbitrum Improvement Proposal's vote as a "ratification," the Arbitrum Foundation nonetheless claims "decentralized governance is working as intended" via both the official Arbitrum Twitter account and a lengthy governance forum post.

It also claimed it did not sell 50 million governance tokens but rather allocated 40 million "as a loan to a sophisticated actor in the financial markets space" and converted 10 million to fiat for "operational costs." Prominent market maker Wintermute confirmed it is the former via retweet.

Free governance responsibilities (kind of)

The debacle follows the high-profile airdrop of Arbitrum governance tokens to users of the Ethereum Layer 2 scaling solution last week, which saw more than one billion ARB tokens allocated to nearly 300,000 wallets — creating a so-called decentralized autonomous organization, ArbitrumDAO.

Token holders and the wider crypto community have taken to Twitter to voice concerns (and jokes) over the apparent lack of decentralized autonomy. A wider theme is that some aren't buying the Arbitrum Foundation's lengthy argument, claiming it's merely a lot of words to say, "we sold."

#Binance #crypto2023 #BTC #BNB #ARBITRUM