Polygon, an Ethereum scaling platform that claims to be decentralized, is landing partnerships with major names. Already a partner with Coinbase NFTs, it just became the primary provider of Instagram’s upcoming NFT marketplace.
Of course, when crypto starts landing large deals, some people start asking big questions — like whether Polygon is truly decentralized.
Formerly known as MATIC Network, Polygon offers Layer 2 scalability solutions for Ethereum. It bills itself as “Ethereum’s Internet of blockchains.” Instead of reinventing Ethereum’s Layer 1, Polygon focuses on improving scalability and speed.
Ethereum focused on decentralization, though this came at the cost of occasional “traffic congestion” issues and high transaction fees. Polygon aimed for low costs and high speeds. Nowadays, it can handle 7,000 transactions per second (TPS), while Ethereum rarely handled more than 20 TPS before the Merge.
For those wondering: The Merge may not have improved Ethereum’s TPS much. Stats show that post-Merge Ethereum still tops out at 20 TPS most of the time.
Polygon didn’t try to be an Ethereum-killer. Instead, it aimed to improve on work that Ethereum had already completed. It also raised $5.6 million during its initial coin offering (ICO) and subsequent sales of its MATIC token, which resides on Ethereum as an ERC-20 standard token.
Who uses Polygon (MATIC)?
Polygon boasts more than 37,000 dApps on its platform. These dApps include familiar names like the decentralized exchange SushiSwap and the financial services app Cashaa.
Companies like Instagram and Coinbase forged deals with Polygon for their NFT marketplaces. Disney showed interest by adding Polygon to its accelerator program in June 2022.
Participants in Disney’s latest accelerator program are developing experiences for augmented reality (AR), NFTs, and artificial intelligence (AI) theme park properties.
Is Polygon decentralized?
In August 2021, Polygon announced an ostensible decentralized autonomous organization (DAO) as part of its efforts to become more decentralized. Polygon had recently acquired Hermez, the zero knowledge (ZK) rollup platform, to assist with switching Polygon to a cross-chain protocol.
It also formed the Polygon Governance Protocol to attempt to steer its path toward greater decentralization. It postponed a proposal on its auction model due to concerns that a validator controlled by a wealthy actor could push out smaller validators. Polygon’s forum members had also expressed concern about onboarding new validators and protecting the interests of smaller validators.
Owners of MATIC can delegate their tokens to bigger validators who cast votes for them. Community members have expressed concern that MATIC owners can’t access the track record of each validator prior to delegating.
Other decentralized properties like UniSwap ran into issues with potentially unethical behavior by large delegates. Binance, a particularly large MATIC delegate, previously denied using the tokens that its customers keep on its exchange to gain more votes on UniSwap proposals. A delegate address associated with Binance has not voted at all, yet could cast more than 13 million votes if it wanted to.
Polygon’s delegated power structure could also lead to increased centralization among validators, as everyday users have strong incentives to delegate their MATIC to central custodians with more time, attention, ability, and financial incentive to participate in governance actions.
A few big delegates could conspire to control the vote. The top 10 UniSwap delegates control 42.35% of the votes ⏤ not quite a majority, but enough that this oligopoly could conceivably block an otherwise sound proposal, if they conspired.
Despite its marquee brand partnerships, Polygon is risking decentralization theater. It could just shrug its collective shoulders, though. After all, it has already attracted big names like Coinbase, Instagram, and Disney.
Source : Protos