Polygon ‘AggLayer’ Promises a Solution to Ethereum Fragmentation

Polygon Labs is introducing a potential solution to the Ethereum blockchain's fragmentation issues. In February, the L2 Ethereum scaling solution plans to launch AggLayer - a decentralized protocol that relies on zk-proofs to unite different blockchains into one single layer of usability.

AggLayer is central to the development team's vision of making Ethereum as easy to navigate and engage with as the everyday internet, to encourage the general public to get on board with Web3. To achieve this, the user experience has to be greatly improved from its current state. 

In the last couple of years, the fast pace of development in the sector has led to many improvements in UX, but these have also introduced new challenges.

A modular blockchain architecture has allowed the ecosystem to surpass the scalability issues of the first monolithic chains. However, their proliferation has created a deeply fragmented ecosystem, where users and liquidity are separated on their own individual chains.

The purpose of AggLayer is to create an "environment that feels like a single chain" for end users to seamlessly transact and move between dApps built on different chains. As Polygon state, "There will be no mass adoption with siloed liquidity and users."

Developers will also benefit, as using the protocol will allow them to attract users regardless of where they choose to build their projects. Additionally, as the proposal eliminates the need for complicated bridging schemes, individual chains will be able to maintain their full sovereignty.

In this way, the protocol is hoping to enable "near-instant, atomic transactions, unifies liquidity across the ecosystem, creates capital efficiency, and dramatically improves UX."

Polygon Labs is just one of the development teams trying to solve the fragmented liquidity issue. Also this week, Ethereum Layer 2 protocol Polymer announced its plans to integrate the Cosmos Inter Blockchain Communication (IBC) protocol into the Ethereum ecosystem to allow for cross-chain dApps on the blockchain.

Polygon's vision will likely gain more traction as the Ethereum Virtual Machine (EVM) chain has a much larger user base. According to blockchain analytics firm Flipside, in 2023, Polygon acquired 15.4 million users.

Almost 40% of these new users joined the chain in January, followed by a steady decline in monthly user acquisition. However, the L2 solution was still the blockchain that gained the second most users in the industry, just 160,000 users less than Ethereum and almost 5 million more than Bitcoin.

'Aggregation Day', planned for next month, will open the way for more users to join the network and, by doing so, take the vision of a united and uniform Web3 forwards.