Polygon Labs has recently announced significant developments aimed at enhancing blockchain technology and user experience. The organization has spun off its Polygon ID service, now known as Privado ID, to provide a protocol-agnostic self-sovereign identity solution. Additionally, Polygon has launched a $720 million Community Treasury to support blockchain projects over the next decade. In a further sign of growth, Polygon has surpassed Ethereum in monthly active users, highlighting the increasing adoption of layer-2 scaling solutions.
Polygon Labs Spins Off Polygon ID Service as Privado ID: A New Dawn in Self-Sovereign Identity Control
Polygon Labs has announced the spin-off of its Polygon ID service, now rebranded as Privado ID. This strategic transition positions Privado ID as an independent entity, extending its protocol-agnostic self-sovereign identity solution beyond the confines of the Polygon network.
Privado ID promises a wide array of applications, from proving humanity and uniqueness to complicating Sybil attacks, implementing airdrops and incentives, trading on decentralized exchanges, and fulfilling stringent compliance procedures like proof of age or Know Your Customer (KYC). Moreover, it aims to revolutionize traditional finance by facilitating the transfer of securities, intellectual property, land titles, and other tokenized assets.
A key feature of Privado ID is the direct control it affords users over their identities and the information they choose to disclose. For instance, users can verify their ages without revealing sensitive details such as addresses or nationalities. This innovative approach ensures that identity files, stored locally in users' wallets, can be recovered using seed phrases, with identity issuers being either onchain or offchain entities, including government bodies.
The Genesis of Privado ID: A Journey Rooted in ZK Technology
The development of Privado ID traces back to March 2022 when Polygon began working on its identity solution. Launched a year later, the service is anchored in cryptographic-based zero-knowledge (ZK) technology, which ensures that no information is stored or transmitted by third parties. This technology also verifies the authenticity of digital content, mitigating the risk of AI-generated misinformation—a feature that could have significant implications for the metaverse, gaming, and non-fungible tokens (NFTs).
Privado ID has already undergone proof-of-concept trials with several multinational banks and financial institutions, including Deutsche Bank and Consensys. These trials examined the technical aspects of interoperability, compliance, and permissioned transactions, highlighting the robust capabilities of Privado ID in real-world financial settings.
Privado ID has seamlessly integrated with the attestation registry of the Linea zkEVM (Ethereum Virtual Machine) blockchain developed by Consensys. This integration signals Privado ID's commitment to remaining protocol-agnostic, a crucial factor for blockchain interoperability and an enhanced user experience in the burgeoning Web3 ecosystem. Antoni Martin, co-founder and chief operating officer of Privado ID, emphasized this commitment, stating, "Our dedication to being protocol-agnostic aligns perfectly with the idea that unified data is essential for blockchain interoperability and enhancing user experience, both of which are crucial for the success of Web3."
Martin also highlighted Privado ID's potential to lower the cost of trust and risk mitigation, promising support for non-EVM blockchains in the future—a move that could significantly broaden its adoption and impact.
Leadership and Vision: Guiding Privado ID Forward
Sandeep Nailwal, co-founder of Polygon Labs and newly appointed chief business officer of Polygon, will serve as a growth adviser for Privado ID. Nailwal's focus on the development of new ZK solutions will be instrumental in driving Privado ID's growth and innovation. His expertise and vision are expected to play a pivotal role in navigating the challenges and opportunities in the rapidly evolving digital identity landscape.
Polygon Launches $720 Million Community Treasury to Propel Blockchain Innovation Over the Next Decade
Meanwhile, Polygon has announced the creation of a $720 million Community Treasury. This substantial initiative is dedicated to nurturing and advancing blockchain projects within the Polygon and Ethereum ecosystems over the next decade.
A Decade-Long Commitment to Blockchain Development
The $720 million Community Treasury, established through community consensus, will distribute approximately 100 million Polygon ecosystem tokens (POL) annually, culminating in a total of one billion POL tokens over the next decade.
The Community Treasury's inaugural season will allocate an initial 35 million Polygon MATIC tokens, worth roughly $25 million, for the Community Grants Program (CGP). This substantial funding aims to kickstart the initiative by providing crucial support to early-stage projects and developers.
Two Tracks for Diverse Project Support
The first season of the CGP offers two distinct tracks for builders: the General Grant Track and the Consumer Crypto Track.
The General Grant Track is open to all project types and imposes no strict limitations on eligible projects. However, Polygon has expressed a keen interest in several focus areas, including decentralized applications (DApps), developer tooling and libraries, and protocol infrastructure. This broad and inclusive approach is designed to attract a wide range of innovative projects and ideas.
The Consumer Crypto Track, on the other hand, is specifically tailored to support developers, creators, and entrepreneurs focused on developing blockchain-based applications for everyday users. This dedicated track aims to encourage the creation of consumer-centric solutions that can drive mainstream adoption of blockchain technology.
Application Process and Grant Allocation
The inaugural season of the CGP is currently open for applications, with submissions being accepted from Jun. 11 until Aug. 31. Projects must be built on or willing to migrate to the Polygon network and must demonstrate long-term viability.
Grants will range from 5,000 to over 50,000 MATIC, with the Community Treasury Board overseeing the selection process. Ajit Tripathi, a member of the Polygon Community Treasury Board, emphasized the significance of this initiative in a recent interview, stating, "Season 01 welcomes all project types through its general grants track and features a dedicated 'consumer crypto' track. This track aims to support developers, creators, and entrepreneurs focused on innovative blockchain-based applications for everyday users."
Each month, the Community Treasury Board will review and select projects, ensuring that the most promising and impactful initiatives receive the necessary funding to thrive.
Fostering Ecosystem Growth and Innovation
The launch of the Community Treasury initiative is a strategic move by Polygon to support early-stage projects and help developers secure the funding they need to succeed. This initiative follows Polygon's recent advancements in zero-knowledge technology, dubbed pessimistic proofs, which aim to ensure that no single chain can compromise the deposits of other chains in the AggLayer network.
By providing financial support and resources to dynamic early-stage builders, Polygon aims to alleviate the financial pressures associated with development, allowing innovators to focus on building for longevity. As stated by the Polygon team, "With Polygon CGP, dynamic early-stage builders can get the funding they need when they need it. Building is hard. You shouldn’t have to worry over the finances needed to succeed while you experiment. Build for longevity and get the support you need today."
Polygon Surpasses Ethereum in Monthly Active Users as Layer-2 Networks Gain Traction
In a related development, protocols linked to the Ethereum ecosystem are experiencing a significant surge in total user count. Polygon co-founder Mihailo Bjelic recently took to X (formerly Twitter) to share an update revealing that Polygon, a prominent layer-2 scaling solution, has now surpassed Ethereum in total Monthly Active User (MAU) count.
Ethereum vs. Layer-2 Networks: A Shift in User Dynamics
Ethereum has long been the foundational network for various layer-2 scaling solutions, serving as the backbone for decentralized applications (DApps) and decentralized finance (DeFi) projects. However, it is increasingly losing growth traction to these secondary protocols. According to data shared by Bjelic, Polygon's MAU has soared to over eight million, eclipsing Ethereum's MAU, which remains below the eight million mark.
This shift towards Polygon is not entirely unexpected. The recent Dencun Upgrade significantly lowered fees, making the protocol more attractive to users. While Ethereum continues to develop, the rapid evolution and adoption of its layer-2 solutions are providing users with more efficient and cost-effective ways to engage with the DeFi ecosystem. In addition to Polygon, other layer-2 protocols such as Base and Optimism (OP) are also driving substantial network changes, accommodating a growing number of users.
Advantages of Layer-2 Protocols
The appeal of layer-2 protocols lies in their enhanced performance, scalability, and lower gas fees. These attributes make them a preferred choice for users interested in exploring non-fungible tokens (NFTs), gaming, and other Web3-centric innovations. Layer-2 solutions like Polygon offer a robust alternative to Ethereum's mainnet, enabling faster transactions and reducing costs, which are critical factors for user adoption in the burgeoning DeFi space.
The Broader Impact of Layer-2 Networks
The rise of layer-2 networks represents a broader trend in the evolution of digital currencies. As these networks continue to gain traction, they are not only expanding the capabilities of the Ethereum ecosystem but also driving innovation across the entire blockchain industry. By addressing some of the key limitations of the Ethereum mainnet, such as high gas fees and network congestion, layer-2 solutions are paving the way for more widespread adoption of blockchain technology.
Despite their impressive growth and outpacing Ethereum in several core metrics, layer-2 protocols and their associated tokens remain closely correlated with Ethereum (ETH). This correlation means that they are not immune to the broader market trends and are currently experiencing a bearish phase alongside Ethereum.
The Future of Layer-2 Solutions
The success of layer-2 networks like Polygon shines the spotlight on the importance of scalability and user-friendly experiences in the blockchain industry. As more users migrate to these networks, the ecosystem is likely to witness continued innovation and development, further enhancing the capabilities and adoption of decentralized technologies.
While Ethereum remains a critical component of the blockchain landscape, the rise of layer-2 solutions signifies a shift towards more efficient and scalable networks that can better serve the needs of a growing user base. The ongoing evolution of these protocols will be crucial in shaping the future of the DeFi ecosystem and the broader digital currency market.
