Polygon, an Ethereum-based layer two scaling solution, has announced that it will dedicate up to 250 million MATIC tokens. These tokens will be used to fund the establishment of a zero-knowledge cryptography startup.
At current market prices, the MATIC tokens that will be deployed for this initiative are worth approximately $627.5 million.
Polygon is putting money into zero-knowledge technology.
Polygon has announced that it will invest up to $250 million in zero-knowledge algorithms. These algorithms will allow external validators to validate encrypted network transactions.
Algorithms will be used to validate encrypted transactions or documents. The verification will be performed in order to avoid revealing any sensitive information contained within the documents or transactions.
The algorithms will manage complex decentralized finance applications such as decentralized ride-sharing and decentralized health insurance. As a result, nodes will be used to verify the participants’ personal data on the blockchain without exposing private information.
The algorithm will be used to generate two types of zero-knowledge consensus. These two points of agreement will be PLONK and Halo. The two are a representation of market advancements.
Because transactions will be generated in seconds, the two proofs will be superior to previous cryptography techniques such as SNARK and STARK.
The PLONK proof will still necessitate a high-trust validation setup. Halo algorithms, on the other hand, will operate in a decentralized fashion. The algorithms will be fast, with a core design consideration.
Complex data will be routed across multiple blockchains for processing. Some of the details that will be processed include redacted photo IDs, which take up a lot of space and have an impact on how transactions can be applied.
Sandeep Nailwal, Polygon’s co-founder, stated that the company would focus on ZK cryptography due to blockchain scaling.
“At this stage, we have made a strategic decision to explore and encourage all meaningful scaling approaches and technologies.” “We believe that this is the best way to establish Polygon as the leading force and contributor in the ZK field, as well as onboard the first billion Ethereum users,” Nailwal said.
Polygon makes a wise investment.
Polygon also stated that Mir’s acquisition was a strategic move for the company. Polygon purchased Mir as part of a $1 billion commitment to bring zero-knowledge technology to the blockchain.
Polygon’s recent acquisition of Mir is part of the company’s strategy to increase adoption. With high gas fees still a challenge for the Ethereum network, an upgrade to Polygon could increase market adoption. It may be one of the most widely used layer two networks.
Polygon stated in the announcement, “the acquisition should help Polygon become a bigger player in so-called Layer 2 technologies, also known as rollups, which effectively take transactions from Ethereum, compress them, and post them back to the original chain for a fraction of the time and cost.” Rivals such as Arbitrum, Loopspring, Optimism, and StarkWare are driving the Layer 2 transition.”