Polygon Labs has announced a strategic collaboration with WenLlama, Phoenix Labs, and Hexensio, aiming to fortify the Polygon Ecosystem while providing sustainable support for Ethereum. The initiative is particularly focused on the core contracts that would be integral to Polygon 2.0.
Announcing the upgrade, designed to align the growth of the Polygon Ecosystem with Ethereum at the code level, Polygon Labs shared a Twitter post:
In collaboration with @WenLlama, @phoenixlabsdev, and @hexensio, we set out to align the growth of the Polygon Ecosystem with continued sustainable support of Ethereum, directly in the core contracts powering Polygon 2.0.
— Polygon (Labs) (@0xPolygonLabs) August 30, 2023
A thread on Polygon Ecosystem's commitment to Ethereum.
The collaboration would leverage the Dai Savings Rate (DSR), where interest from the DAI bridge would be directed toward developers who build core Ethereum tooling. This is part of a broader strategy to sustainably fund Ethereum’s ongoing development. The code for this entire operation is open-source, inviting other Layer 2 teams to participate.
Polygon Labs also introduced a new Layer 2 DAI contract. This contract is engineered to deposit its reserves into MakerDAO’s DSR using a specialized sDAI wrapper developed by Phoenix Labs. The DSR yield generated from these deposits would be channeled to Protocol Guild, a platform that aims to provide financial support to core Ethereum developers.
The news has been well received by the cryptocurrency community, with several users praising the layer 2 project’s commitment. Sandeep Nailwal, the founder of Polygon Labs, commented on the development in a separate post, stating:
We hope that other L2 teams that use Ethereum as a foundation follow our values in helping ensure we sustainably fund Ethereum development for the long term.
Amidst this backdrop, Polygon’s native token, MATIC, is poised for a significant transformation into POL. This is not merely a rebranding but represents a substantial technical upgrade. POL is designed to offer the benefits of multi-chain staking without the associated risks of re-staking. As part of the Polygon 2.0 proposal, the ecosystem would transition from a single chain to a network of interoperable Layer 2 solutions.
The POL token would be staked in a designated ‘staking hub’, a mechanism termed ‘enshrined restaking’. This feature would allow POL to operate across various chains and assume multiple roles, thereby optimizing rewards for stakers without requiring additional capital.
Despite these developments, Polygon’s current market valuation hasn’t moved much, standing at over $5.39 billion, following a recent slight dip in its token price. At press time, the 14th largest cryptocurrency by market capitalization is worth $0.579 per token, down 0.1%.
