Polymarket Announces In-House L2, Is Polygon's Ace Up?
Original Title: "The Economic Account Behind Polymarket's Exodus from Polygon"
Original Author: Azuma, Odaily Planet Daily
On December 22, a piece of news about the leading prediction market Polymarket sparked widespread market attention. Polymarket team member Mustafa confirmed in the Discord community that Polymarket plans to migrate from Polygon and launch an Ethereum Layer 2 network called POLY, which is the project's current top priority.

An Not-so-Surprising "Breakup"
Polymarket's decision to leave Polygon is not particularly surprising. One is a leading application layer representative, and the other is a fading old base layer. The mismatch between the market heat and expected value of the two has existed. As Polymarket gradually grows into a new giant, Polygon's unstable network performance (the most recent failure occurred on December 18) and relatively weak ecosystem have objectively restricted the former.
For Polymarket, building its own gateway means a win-win choice in both product and economic dimensions.
On the product side, in addition to seeking a more stable operating environment, building a Layer 2 network can help Polymarket customize the underlying features based on its platform needs, making it more flexible to adapt to future platform upgrades and iterations.
The more important significance lies in the economic aspect. Building its network means that Polymarket can consolidate the economic activities derived from its platform and peripheral services into its own system, preventing related value from spilling over to external networks, and gradually solidifying into its own systemic advantage.
Explicit and Implicit Economic Contributions
As an application layer, Polymarket's skyrocketing popularity once brought Polygon objective direct economic contributions. Data analyst dash's data history compiled by Dune shows:
· Polymarket has 419,309 active users this month and a total of 1,766,193 historical users;
· This month's total number of transactions is 19.63 million, with a total historical number of transactions of 115 million;
· This month's total transaction volume is $15.38 billion, with a total historical transaction volume of $14.3 billion.
As for how to evaluate Polymarket's contribution to the Polygon ecosystem, Odaily Star Daily found a coincidental ratio when compiling data on the two.
· First, in terms of TVL, Defillama data shows that the current total value locked across all Polymarket is approximately $326 million, representing about a quarter of Polygon's total locked value of $1.19 billion;
· Secondly, in terms of gas consumption, Coin Metrics previously reported that transactions related to Polymarket were estimated to have consumed 25% of Polygon's total gas last October;
· Considering the potentially outdated nature of the data, we examined recent changes, data analyst petertherock's analysis on Dune showed that Polymarket-related transactions in November consumed approximately $216,000 in gas, while Token Terminal statistics indicated that the total gas consumption on the Polygon network that month was around $939,000, a proportion also close to a quarter (approximately 23%).
While there may be coincidences due to statistical methodologies and timeframes, similar results across dimensions can also serve as a reference for estimating Polymarket's significance to the Polygon economy.

In addition to quantifiable metrics such as active users, total value locked, trading volume, and gas contribution, Polymarket's economic significance to Polygon is also reflected in a series of more difficult-to-measure yet equally real implicit contributions.
First is the activation of stablecoin liquidity. All of Polymarket's transactions are settled in USDC, and its high-frequency, continuous trading activity objectively enhances the circulation demand and use cases of USDC on the Polygon network; second is the ancillary value of retained users. Aside from the prediction market itself, these users may also potentially switch to using other DeFi products in the Polygon ecosystem out of convenience, thereby enhancing the overall ecosystem value of the Polygon network. These contributions, although challenging to quantify with specific data, constitute the most highly valued and scarce "real demand" at the base layer of the network.
Why Now? The Answer Isn't Hard to Guess
In fact, simply from the perspective of user base, data performance, and market presence, Polymarket has fully demonstrated the confidence to stand alone. It is no longer a question of "whether to leave," but a question of "when to leave."
The reason for choosing to start the migration at this particular moment lies in the proximity of the Polymarket TGE. On the one hand, once Polymarket completes its token launch, its governance structure, incentive system, and economic model will relatively solidify, and the cost and complexity of subsequent underlying migrations will significantly increase; on the other hand, upgrading from a "single application" to a "full-stack system of application + underlying layer" itself implies a change in valuation logic, and building a Layer 2 undoubtedly opens up a higher ceiling for Polymarket in terms of narrative and capital.
Overall, Polymarket's departure to Polygon is essentially not just a simple underlying migration, but a microcosm of a structural change in the crypto industry. When top-level applications begin to have the ability to independently support users, traffic, and economic activity, if the underlying network cannot provide additional value, it will inevitably be "betrayed."
Nothing else, just for profit.
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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions
The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.
There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."
No. The difference lies in where the keys are stored.
In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.
X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.
This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.
The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.
The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.
After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."
From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.
In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.
As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."
Not continuous monitoring, but a clear access point.
For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.
This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.
There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."
X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.
In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.
WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.
X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.
These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.
This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.
X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.
Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.
The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.
X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.
The help page sentence has never been just technical instructions.

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