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Polygon’s POL Upgrade Live On Ethereum Mainnet, MATIC To $1?

After months of development and weeks after testnet deployment, the POL upgrade is now live on the Ethereum mainnet. According to an update on October 25, Polygon Labs, the team behind the Ethereum sidechain, Polygon, said the move is a milestone for the project. The team claims the release of POL “paves the way for the next series of milestones in the Polygon 2.0 roadmap.”

Polygon 2.0 Taking Shape: What’s In Store?

The Ethereum sidechain continues to build. Despite challenges in the last bear run, which saw MATIC, the platform’s native currency, drop below $1 before crashing to spot levels, the team announced the start of Polygon 2.0, reviving developer activity.

The primary objective of the upgrade is to make the network more scalable, secure, and user-friendly. To achieve this, Polygon will leverage a new consensus mechanism, proof-of-stake liquidity (POSL), which the developer claims is more efficient. 

Notably, the team is developing key differences between this consensus system for Polygon 2.0. For instance, validators must stake their native tokens and liquidity to participate in the network. 

The liquidity provided by participating validators will then be channeled to boost the liquidity of its decentralized exchanges (DEXes). Subsequently, once Polygon 2.0 goes live, exchanges running on the sidechain will be more liquid, meaning users can easily swap tokens in a low-fee, highly scalable environment. 

Will MATIC Bulls Break $1?

Moreover, POL will be critical for Polygon 2.0. With the token now being initiated on the Ethereum mainnet, Polygon Labs is jump-starting the process, setting the ball rolling for POL, which the team said will “power a vast ecosystem of ZK-based layer-2 chains.” 

The team claims POL is a “hyperproductive token” primarily designed to power a multichain ecosystem. Besides, the token will be used to settle fees, and holders will participate in governance. At the same time, those who choose to stake it will be paid in the token. 

Still, it is not clear whether this update will support MATIC prices in the long run. At present, the $1 psychological level remains elusive. 

Looking at price charts, MATIC is already up 30% from October 2023 lows and continues to unwind losses. Moreover, bulls have reversed the dump of October 17 and continue to power higher. 

Polygon price on October 25| Source: MATICUSDT on Binance, TradingView

From the daily chart, bull bars are banding along the upper BB, a volatility indicator. This suggests that the underlying momentum is building up, favoring optimistic buyers.

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Cardano Leads Development With Unique Sidechains And Toolkits

This month, the Cardano ecosystem team is getting ready to release a software toolkit that will let developers build their own sidechains.

On January 12, Input Output Global (IOG), a blockchain engineering firm created by Charles Hoskinson and formerly known as Input Output Hong Kong (IOHK), made the announcement. The official technical documentation for the sidechain toolkit was also released in the announcement.

As a “proof-of-concept,” IOG developers have already used the toolkit to build an Ethereum Virtual Machine (EVM)-compatible sidechain public testnet. Once the audit is complete, developers will be able to deploy decentralized applications, create smart contracts, and transfer tokens between testing chains.

In addition to other application-specific capabilities, the toolkit will permit sidechain developers to select their consensus process.

Mainnet Growth

The IOG developers have also revealed that they have used the toolkit to build a proof of concept on a public testnet that is compatible with the EVM sidechain. Moreover, once the audit is complete, developers can launch dApps and smart contracts and transfer tokens between different test chains.

Finally, the announcement notes that sidechain creators can use the toolkit to choose the consensus mechanism that best suits their app.

The term “mainnet” refers to the parent blockchain, while “sidechain” describes a blockchain that operates independently of the mainnet. While the primary blockchain focuses on safety and decentralization, a sidechain can help the network scale.

In the long run, IOG expects this new development to lead to widespread adoption of the Cardano network, facilitating the launch of multiple Cardano sidechains and partner chains.

Meanwhile, Charles Hoskinson, the creator of ADA, has proposed that Solana joins Cardano as a “partner chain.” Hoskinson shared this during a recent “ask me anything” session.

He claims that there would be synergies between the two blockchains. For example, Solana can take advantage of Cardano’s security and infrastructure, while Cardano can take advantage of Solana’s faster network.

Fans’ Anticipation In Cardano Community

The announcement has been met with positivity from Cardano supporters, with one member of the community anticipating a price increase on par with Ethereum in recent years when several layer-2 sidechains and utility tokens were introduced.

One enthusiastic participant predicted that the release and implementation of the toolkit would lead to a rise in the number of people making use of Cardano’s sidechains in the coming weeks and months.

Meanwhile, the IOG team noted that the toolbox isn’t a remedy but will help with problem areas. For example, the security model, bridge experience, and SPO rewards structure are just a few. The team did say, though, that it was looking forward to community input and participation in these improvements.

According to its roadmap, Cardano will introduce parallel accounting systems to promote sidechains. This release is part of the Basho update that will allow for ADA’s network compatibility. IOG’s development of this toolkit marks their second sidechain solution for it.

IOG already implemented a simpler EVM-compatible sidechain in July to start the sidechain work on Cardano, so this isn’t the first sidechain solution they’ve integrated.

Additionally, in September, Cardano experienced its most crucial hard fork yet, the Vasil upgrade, which has been said to facilitate the cheaper and more efficient deployment of smart contracts and the operation of decentralized applications.

As of press time, ADA is trading at $0.3312, a 22.14% increase from the prior week’s price, with a 24-hour trading volume of $448 million.