Use Matic as Gas Token for Polygon zkEVM (Focused Proposal)

Polygon Improvement Proposals Proposal Ideas
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Overview

My first proposal that called for the firing of the CEO was censored which has made it clear that this is not a DAO and that Matic holders do not direct Polygon Labs despite that being in the whitepaper. I am thus revising my proposal to focus on my main point to avoid being censored.

Matic is the gas token of the Polygon network. Buyers/investors/holders of this token are the ones that support the network, pay the bills, and use the network. Many have taken on significant risk in order to fund Polygon Lab’s efforts. Polygon zkEVM proposes to ditch Matic as the gas token. It retains Matic in some currently unknown role and for running a validator (from what I’ve read) but that role will be far off in the future. By “far off” I mean we can probably expect it to come at the same pace as ETH PoS so 5ish years at a minimum. This announcement has caused the value of Matic to crash from $1.52 on Feb 17th, 2023, to $0.87, while ETH has risen in the same period from $1694 to $1820. Prices have gone down even further versus ETH since this proposal was first

Problem

Matic is the governance token of the Polygon network, much like shares in companies, the holders/owners of Matic make the decisions that guide the company, in this case Polygon Labs (proven to not be true). This decision by Polygon Labs that has caused the price of Matic to dump, damaging their investors. As Polygon Labs has switched over to focusing on zkEVM, it is likely that the value of Matic will continue to decline as people lose faith in the token. Eventually, it could be forseen that it becomes nearly worthless.

This also betrays many of the employees, dapp developers, etc. of Polygon who hold/own/are paid bonuses in Matic. All of whom have suffered. I hope every employee of Polygon Labs has lost somewhat from this because that means they are invested in Polygon.

There is the argument that using Matic for gas on zkEVM would result in additional complexity. My response to that has been that Polygon as a L2 was started with the understanding that Matic would be sold to purchase ETH to reserve block space for the network. There is no reason this situation cannot continue, and this would be more aligned with Polygon’s initial marketing/guidelines to investors when they sold them Matic and with the whitepaper. It makes no sense to change the situation, zkEVM is supposed to lower the ETH needed per tx, thus it should actually be cheaper than Polygon L2 to reserve blockspace on zkEVM. EIP-4844 should further reduce this cost.

Increased demand for Matic also more correctly aligns Polygon with Matic. It makes more sense to stick with a token the Polygon team controls 100% than use ETH which they have 0 control over. What if ETH prices rise to $1,000,000 making zkEVM transactions unaffordable for the casual user?

Let’s keep Polygon as the network of Matic instead of a secondary network for ETH.

Proposed Solution

Direct Polygon Labs to implement Matic as the gas token for zkEVM. Redirect a % of gas used towards purchasing ETH “if” it’s needed for L1 block space. Perhaps contact the ETH Core developers to get a discount on block space as I know they’ve been considering reserving block space for certain use cases.

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A disadvantage of using the matic token as a gas token for the zkEVM seems that the security of both the polygon chain and the zkEVM will get interdependant, it does not seem like a good seperation of concerns between chains. If demand for one of them chain/zkEVM goes down then it will influence the security on the other.

Ofcourse, the temporary downtrend is sad, but the plan of how to use the matic token seems good.

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I mean…instead isn’t zkEVM relying on ETH where Matic holders have 0 control? At least if both chains use the Polygon token we will maintain full control of them and their future.

There were multiple good reasons Polygon created and used Matic for Polygon and I don’t see any reason why those arguments would disappear on zkEVM. If there are good arguments to switch to ETH for gas on zkEVM then why not switch to ETH on Polygon L2 too? Why change a successful formula?

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In light of the recent announcement that Polygon L2 would be upgraded to zkEVM instead of the team focusing on a new chain I’d like to withdraw my proposal. I have the feeling that my proposal may have influenced that announcement given the timing, I hope that it helped contribute and show customer dissatisfaction and appreciate that my feedback was addressed.

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I agree, I am also in favor of Matic remaining a gas token, or alternatively, if you still need an Ether token to pay, then when burning Ether, pre-exchange it for Matic and then burn it, in general, to somehow increase the value of Matic

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I think what you are looking for is this Whitepaper

Polygon is switching from MATIC to POL as the main token for all their chains.

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The argument for keeping Ethereum as the gas token of the zkEVM rollup is a sound one. If a rollup “rolled up” to Polygon PoS then the natural gas token for said rollup would be MATIC / POL… but as long as the rollup’s proof’s gas is being paid in Ether, the rollup’s gas token should be Ether. To do otherwise would risk destabilizing the security of the rollup, or potentially even breaking it outright.

But gas costs are not the only way that a rollup can collect funds.

Fastlane Labs (the MEV protocol on PoS) is currently working on an MEV proposal for zkEVM. The proposal is for a design that is being built with these three objectives in mind:

  1. No sandwich attacks or other predatory, harmful types of MEV (similar to our design on PoS).
  2. No significant delays or other hindrances to the zkEVM user experience.
  3. The MEV auctions will be based in MATIC / POL, not Ether.

With zkEVM’s objective of scaling Ethereum transactions / throughput (IE cheap transactions), I believe that holding zkEVM’s MEV auctions using POL as the base currency has the potential to generate significantly more “buy pressure” for the POL token than using POL for gas.

We’ll submit a PIP in a few months with more details.

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