Simple Summary
Polygon zkEVM is an open-source ZK-Rollup that provides EVM equivalence for a frictionless user experience and to benefit from the security of Ethereum.
This proposal recommends launching Lyra on Polygon zkEVM by integrating with Quick Perps.
Abstract
Polygon zkEVM is an open-source ZK-Rollup that provides EVM equivalence for a frictionless user experience and to benefit from the security of Ethereum. Essentially all existing smart contracts, developer tools, and wallets work seamlessly. The zkEVM harnesses the power of ZK proofs to reduce transaction costs and massively increase throughput, all while inheriting the security of Ethereum. The mainnet beta was launched on March 27, 2023.
zkEVM currently crossed $15m TVL and has grown 50% in the last 7 days, and unique wallets have crossed 60K. Transactions have increased 8x over the last two weeks.
This just marks the beginning of growth of TVL, users and transaction growth as many new protocols launch in the next phase of growth.
This proposal recommends launching Lyra on Polygon zkEVM by integrating with Quick Perps, which is a Perps protocol with advanced features like trailing orders.
Assuming a passed proposal and successful integration, there will be ways to further integrate Lyra Protocol into the Polygon zkEVM ecosystem.
Motivation
Deploying early on Polygon zkEVM Mainnet Beta will solidify Lyra’s position as a leader in the multi-chain EVM ecosystem. Increased users and assets will help accelerate Polygon zkEVM’s growth, introducing Lyra’s unique user base to the new blockchain ecosystem. In tandem, increased volume through Lyra grows the protocol and expands Lyra to a new suite of ZK enthusiasts.
Increased users and assets will help accelerate Polygon zkEVM’s growth, introducing Lyra’s unique user base to the new blockchain ecosystem. In tandem, increased volume grows the protocol and expands Lyra to a new suite of ZK enthusiasts.
Specification
Delta Hedging-Lyra aims to keep the exposure of liquidity providers close to delta-neutral. It does this by either opening a long or short perpetual futures position through QuickPerps.
QuickPerps is QuickSwap’s new decentralized Perpetual Exchange built on Polygon zkEVM mainnet Beta, allowing users to trade spot & perpetual swap contracts for $MATIC, $ETH, $BTC, $USDC, $USDT, and $DAI with up to 50x leverage.
Given QuickPerps’ decentralized and permissionless nature, spot and perpetual swap contract trades are powered by a liquidity pool called QLP. When users deposit liquidity to the QLP pool, they receive QLP tokens, which represent their total stake in the pool - they can then borrow up to 50x the value of their collateral from this pool to go long or short.
The current liquidity on Quick Perps is $4.5 mn, with immediate plans to scale.
The Polygon zkEVM Mainnet Beta is EVM equivalent, with technical specifications on block-times and timestamp required on part of the Lyra technical team.
Polygon Labs
This proposal is being made by Jack Melnick, Senior Manager, Growth BD, an employee of Polygon Labs. Polygon Labs is a legal entity focused on the ecosystem growth and maintenance of the suite of Polygon networks.
Legal
The legal entity that is supporting this proposal is Polygon Labs Services (Switzerland) AG, a Swiss corporation known as “Polygon Labs”.
Conflict of Interest Declaration
There are no existing financial or contractual relationships between Polygon Labs and any of Lyra’s legal entities, including Lyra, Lyra tokens, nor investments of Lyra.
Risk Profile
Deploying on Polygon zkEVM should pose minimal risks, relative to deploying on alternate blockchains. As an Ethereum Layer 2, it uses Zero Knowledge proofs to inherit Ethereum’s core safety, while allowing developers to easily deploy existing EVM codebases. The bridge has been disintermediated, and Lyra can expect reputable oracle providers to be available as data providers. Polygon’s zkEVM testnet has been running for the past six months. Additionally, the deployment has been audited multiple times, by auditors including Spearbit and Hexens. Risks are outlined in detail here: https://wiki.polygon.technology/docs/zkEVM/
## Protocol security
Please address the following questions if you’re proposing a cross-chain deployment:
Does the bridge support arbitrary message passing? Yes
Is the bridge secured by a trusted entity, by a multi sig, or a protocol/set of incentivized nodes? No trusted entity, multi-sig, or a protocol/set of incentivized nodes, only L1 and L2 security. Pure smart contract interactions only.
Does the bridge leverage the security of the source chain (e.g. Ethereum L1) or destination chain, or is security provided by another third party entity? All based on L1 and L2. L2 security is based on the L1.
Is it possible for a fraudulent message to be passed to the destination chain? If so, are there any recall mechanisms? There are two ways to use the bridge, which do not allow for a fraudulent message to be passed to the destination chain:
· Native supported messages: Allow only bridging of ERC-20 and ETH. There is no fraudulent message that can be passed.
· Custom Messages: Custom receiver logic on the other side of the bridge. When you send a message, the message needs to be received by a smart contract, so you have to build the receiver smart contract, which is specific to the logic of that smart contract. The security is up to the person building the receiver smart contract. These custom messages do not take custody of any funds. All that is known is that the message will pass the bridge if implemented correctly. The bridge is just the message carrier.
What are the ramifications of fraud to the malicious actor? There is no ramification to contemplate due to there being no possibility of passing a fraudulent message to the destination chain, as described above.
Has the bridge code been audited? By a third party? As part of the main zkEVM audits, the bridge code was audited.
