MATIC

Polygon, Immutable zkEVM to tackle ‘huge incumbents exploiting players’

Web3 gaming developers will be able to build on a new zero-knowledge Ethereum Virtual Machine that aims to increase ownership rights for players and take on the big gaming corporations.

Gaming developers are getting a new platform on which to build Web3 games, with a tie-up between Polygon Labs and Immutable set to launch a new zero-knowledge Ethereum Virtual Machine (zkEVM).

The partnership sees the two Ethereum layer-2 firms create an “Immutable zkEVM” — a Polygon (MATIC)-powered zkEVM fully supported on Immutable’s Web3 game development platform.

Scheduled for a March 27 mainnet beta launch, Polygon’s zkEVM enables the validation of mass amounts of transaction data by bundling them up into one transaction that’s then confirmed on the Ethereum network. The same technology will feature on Immutable’s zkEVM solution.

Polygon Labs president, Ryan Wyatt, told Cointelegraph that the technology would allow game developers to focus on building a “great game” rather than needing to divert resources toward building the game on-chain.

“This massively simplifies the choices for developers and helps us focus on what really matters — which is taking on the huge incumbents who are exploiting players on a daily basis.”

In a separate statement, Immutable co-founder and president Robbie Ferguson stated that billions of dollars worth of in-game skins is sold each year with no rights to players.

“We’re changing that so players are in control, and ownership is the expectation,” he said.

Wyatt told Cointelegraph that the partnership came together despite Immutable and Polygon Labs being in competition, adding that the technology “really quickly aligned us” and it was “good for gamers and game developers.”

A ChainPlay survey of blockchain gamers last August revealed that 81% are prioritizing a positive and fun in-game experience after 89% reported losing money in the crypto winter of 2022.

Wyatt said that currently, devs are too focused on how to “actually build a game on-chain,” which pulls focus away from “making a really great game.”

“You shouldn’t really have to worry about these different parts of the infrastructure stack and game development,” he said. “This stuff should come easy. You should be able to plug and play very easily with it.”

The testnet is expected to be released at the end of Q2 and “some” interfaces for building on the zkEVM will be available on March 20. MATIC will be the “staking token,” with Immutable’s IMX token the “core gas currency.”

Related: GameFi analytics help blockchain gamers sift through crypto games

Ferguson said they chose to build for the Ethereum-based gaming ecosystem because “it would be much better to scale the thing that everyone already wanted to use […] rather than try and compete directly with Ethereum.”

“The right way to onboard the next billion players is not by competing with Ethereum but by building on it and scaling with it,” he said, adding that crypto could triple its monthly users “overnight” if Web3 gaming is successful with a “breakout” gaming title.

“What that requires is incredibly seamless infrastructure and a platform where users can get real ownership of their items without even knowing it’s Web3 under the hood.”

Ferguson added he hopes the success of the platform means that “digital property rights in the game are the norm” so that games are owned by “all players rather than giant corporations.”

Polygonscan went down, causing unwarranted concern of blockchain outage

Data from PolygonScan showed that the blockchain had not produced any new blocks or processed transactions for some time, leading some to believe it was suffering an outage.

Update: The article was updated at 11:45pm UTC on Feb. 22 to reflect that the blockchain explorer Polygonscan was not updating correctly. Polygon has continued to produce blocks, according to OKLINK.

An outage at network explorer Polygonscan led to unfounded speculation that the Polygon blockchain was temporarily down for the count. 

Rumors surfaced on Feb. 22 that layer-2 scaling solution Polygon may have been suffering an outage after data from PolygonScan purportedly showed the blockchain had not processed a block in over an hour and a half.

The team at Polygon has since clarified that the issue came from “a few nodes” falling out of sync and that blockchain production has not stopped.

“About 8:26 UTC, a few nodes went out of sync. This caused a reaction where some nodes could not validate blocks for a very brief period of time,” a Polygon spokesperson told Cointelegraph.

“Block production never stopped – However, there could have been a degradation in network performance temporarily. These nodes have resynced and systems are back to normal.”

The spokesperson said the team was also aware that Polygonscan is down, but alternative explorers can be used.

“We are working with Polygonscan to bring them back up,” said the spokesperson.

Speculation of a possible outage first emerged on Feb. 22, with some pointing to an apparent halt in block production based on data from Polyscan — which showed the blockchain’s last block and transaction was processed at around 8:35 pm UTC on Feb. 22.

Latest blocks and transactions on Polygon. Source: Polygonscan

The network has previously suffered network outages, with the last occurring on March 11, 2022, due to maintenance required on one of the network’s three layers.

Polygon Labs, the crypto firm behind the Polygon blockchain, announced on Feb. 21 that it was letting go 20% of its workforce, or approximately 100 positions.

Polygon sets late March launch date for its zkEVM mainnet beta

The Ethereum scaling solutions provider is preparing to launch its long-awaited Ethereum Virtual Machine roll-up technology.

The long-awaited scaling upgrade from Ethereum layer-2 solution provider Polygon (MATIC) has been announced, with the beta launch of its zero-knowledge Ethereum Virtual Machine (zkEVM) mainnet slated for March 27.

In a Feb. 14 blog post, Polygon said that after three and a half months of “battle testing,” the system will be ready for the mainnet launch next month.

It’s been touted as “seamless scaling for Ethereum,” and was launched as a testnet in December last year.

The development of the zk-rollup scaling technology has been ongoing for the past three years. During that time, the Polygon zkEVM system has hit several milestones noted by the team.

These include the deployment of more than 5,000 smart contracts, the generation of over 75,000 zk-proofs, more than 84,000 wallets and two public third-party audits.

A graphic detailing the development so far leading up to the launch. Source: Polygon

The team noted that security is the highest priority and that’s the reason “why Polygon zkEVM has been run through a gauntlet of tests and audits.”

The technology uses zero-knowledge proofs — cryptographic confirmations that, in the context of scaling, enable platforms to validate mass amounts of transaction data before bundling and confirming them on Ethereum.

Polygon is not the only team working on a zkEVM solution. Scaling provider zkSync is developing similar EVM technology with its zkPorter — which puts essential transaction data off-chain.

Scroll, another scaling solutions provider, is also building a zkEVM solution in collaboration with the Privacy and Scaling Explorations group, part of the Ethereum Foundation.

The Ethereum Foundation is also funding a project called Applied ZKP, which aims to develop an EVM-compatible zk-rollup.

Related: Polygon tests zero-knowledge rollups, mainnet integration inbound

The team explained the significance of the technology, stating that true EVM-equivalence means Ethereum can be scaled “without resorting to half-measures.”

“The best way to scale Ethereum is to preserve the existing Ethereum ecosystem: code, tooling, and infrastructure needs to just work. And that’s what Polygon zkEVM is aiming to achieve.”

The scaling tech also enables significant transaction cost savings. Proof costs for a large batch of hundreds of transactions are down to about $0.06 and less than $0.001 for a simple transfer, the team added.

Matter Labs, the firm behind Polygon, raised $50 million in a Series B round led by Andreessen Horowitz to build EVM-compatible zk-Rollups in November 2021.

Polygon’s native token, MATIC, has reacted positively to the announcement with a 5.3% gain over the past 12 hours or so. As a result, the token was trading for $1.24 at the time of writing, according to Cointelegraph data.

DCG offloads Grayscale shares to raise capital: Report

The purported sales are the latest measures the embattled firm has taken following moves in recent months to raise capital and preserve liquidity.

Cryptocurrency conglomerate Digital Currency Group (DCG) has reportedly begun to sell its holdings in crypto funds managed by its subsidiary Grayscale Investments as it looks to raise capital and preserve liquidity.

According to a Feb. 7 Financial Times report citing United States securities filings, DCG sold around a quarter of its shares in Grayscale’s Ether (ETH)-based fund for around $8 per share, despite each share holding a claim to nearly double that amount in ETH.

The market price per share (gray) vs holdings per share (green) of the Grayscale Ethereum Trust (ETHE). Source: Grayscale

It’s also said to have sold down small share parcels in Grayscale’s Litecoin (LTC), Bitcoin Cash (BCH) and Ethereum Classic (ETC)-based trusts in addition to its Digital Large Cap Fund — which combines Bitcoin (BTC), Ether, Polygon (MATIC), Solana (SOL) and Cardano (ADA) in a single fund.

When asked about the share sales, DCG was quoted as saying that it O“is simply part of our ongoing portfolio rebalancing.”

Despite that statement, some observers believe Barry Silbert’s DCG may be headed toward financial strife.

Another one of its subsidiaries — crypto lending firm Genesis Global Capital — filed for bankruptcy on Jan. 19 and is believed to owe creditors over $3 billion.

Companies owned by DCG have been severely affected by the contagion resulting from FTX’s implosion, with over 500 employees laid off in recent weeks.

However, DCG has taken a number of steps to preserve liquidity in 2023, such as announcing to its shareholders in a Jan. 17 letter that it would be halting its quarterly dividend payments as it looks to strengthen its balance sheets.

Related: Genesis creditors to expect 80% recovery under proposed restructuring plan

DCG has also sought the help of financial advisory firm Lazard to help it weigh up options to sell crypto media outlet CoinDesk — another of its subsidiaries — after it claimed to have received offers for the outlet exceeding $200 million.

Grayscale, Genesis and CoinDesk are among some 200 crypto-related businesses in DCG’s venture capital portfolio, according to its website. DCG also has equity in other companies, including the crypto exchange Luno and advisory firm Foundry.

3 key metrics suggest Bitcoin and the wider crypto market have further to fall

Traders are not as fearful as they were in June, but several metrics show the market is still standing on paper-thin support levels.

The total crypto market capitalization has fluctuated in a 17% range in the $840 billion to $980 billion zone for the past 28 days. The price movement is relatively tight considering the extreme uncertainties surrounding the recent market sell-off catalysts and the controversy surrounding Three Arrows Capital.

Total crypto market cap, USD billion. Source: TradingView

From July 4 to 11, Bitcoin (BTC) gained a modest 1.8% while Ether (ETH) price stood flat. More importantly, the total crypto market is down 50% in just three months, which means traders are giving higher odds of the descending triangle formation breaking below its $840 billion support.

Regulation uncertainties continue to weigh down investor sentiment after the European Central Bank (ECB) released a report concluding that a lack of regulatory oversight added to the recent downfall of algorithmic stablecoins. As a result, the ECB recommended supervisory and regulatory measures to contain the potential impact of stablecoins in European countries’ financial systems.

On July 5, Jon Cunliffe, the deputy governor for financial stability at the Bank of England (BoE) recommended a set of regulations to tackle the cryptocurrency ecosystem risks. Cunliffe called for a regulatory framework similar to traditional finance to shelter investors from unrecoverable losses.

A few mid-cap altcoins rallied and sentiment slightly improved

The bearish sentiment from late June dissipated according to the Fear and Greed Index, a data-driven sentiment gauge. The indicator reached a record low of 6/100 on June 19 but improved to 22/100 on July 11 as investors began to build the confidence in a market cycle bottom.

Crypto Fear & Greed Index. Source: Alternative.me

Below are the winners and losers from the past seven days. Notice that a handful of mid-capitalization altcoins rallied 13% or higher even though the total market capitalization increased by 2%.

Weekly winners and losers among the top 80 coins. Source: Nomics

Aave (AAVE) gained 20% as the lending protocol announced plans to launch an algorithmic stablecoin, a proposal that is subject to the community’s decentralized autonomous organization.

Polygon (MATIC) rallied 18% after projects formerly running in the Terra (LUNA) — now called Terra Classic (LUNC) — ecosystem started to migrate over to Polygon.

Chiliz (CHZ) hiked 6% after the Socios.com app announced community-related features to boost user engagement and integration with third-party approved developers.

Asia-based flow and derivatives demand is neutral and balanced

The OKX Tether (USDT) premium measures the difference between China-based peer-to-peer trades and the official U.S. dollar currency. Excessive cryptocurrency retail demand pressures the indicator above fair value at 100%. On the other hand, bearish markets likely flood Tether’s (USDT) market offer, causing a 4% or higher discount.

Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX

Tether has been trading at a 1% or higher discount in Asian peer-to-peer markets since July 4. The indicator failed to display a sentiment improvement on July 8 as the total crypto market capitalization flirted with $980 billion, the highest level in 24 days.

To confirm whether the lack of excitement is confined to the stablecoin flow, one should analyze futures markets. Perpetual contracts, also known as inverse swaps, have an embedded rate that is usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

Accumulated perpetual futures funding rate on July 11. Source: Coinglass

Related: Analysts say Bitcoin range ‘consolidation’ is most likely until a ‘macro catalyst’ emerges

Perpetual contracts reflected a neutral sentiment as Bitcoin, Ethereum and Ripple (XRP) displayed mixed funding rates. Some exchanges presented a slightly negative (bearish) funding rate, but it is far from punitive. The only exception was Polkadot’s (DOT) negative 0.35% weekly rate (equal to 1.5% per month), but this is not especially concerning for most traders.

Considering the lack of buying appetite from Asia-based retail markets and the absence of leveraged futures demand, traders can conclude that the market is not comfortable betting that the $840 billion total market cap support level will hold.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.