- Polygon’s (POL) AggLayer is getting its first native stablecoin support.
- The move promises significant benefits for chains, applications, and users that connect to the protocol.
- The AggLayer promises to connect all of Web3 on top of Ethereum.
The AggLayer, the Polygon (POL)-backed interoperability solution, is increasingly gaining traction as the Ethereum ecosystem seeks to tackle fragmented liquidity and user experience.
Following support from Movement Labs and, most recently, Magic Labs, the project has now received support from leading stablecoin issuer Agora, a move that promises to bolster accessibility and liquidity.
“A Major Leap Forward”
Polygon’s (POL) AggLayer is getting its first native stablecoin support. In a Monday, November 11 announcement at the ongoing Aggregation Summit in Bangkok, Agora disclosed that it was bringing native AUSD support to the AggLayer, allowing connected chains and projects to seamlessly utilize it for payments, trading, collateral, as a store of value, and more. This move makes the AggLayer more easily accessible for users while providing projects with deep liquidity.
As highlighted by Agora, native AUSD support will allow AggLayer projects to avoid the typically lengthy process of getting stablecoin support on a chain.
Commenting on the development, Polygon (POL) Labs CEO Marc Boiron described it as a “major Leap forward” for the interoperability protocol.
"AUSD is a major leap forward for the AggLayer community, bringing liquidity and interoperability to a whole new level," he asserted. "By making AggUSD [sic] native to every chain in the AggLayer, developers and users across the community can easily transact, store value, and build applications without needing to manage fragmented liquidity. This is a critical step toward realizing the vision of a fully interconnected, seamless Web3 experience."
Meanwhile, beyond the standard stablecoin benefits, AUSD also promises projects significant revenue boosts, a point that Agora co-founder Nick van Eck highlighted.
"Unlike models that funnel profits to a single exchange or partner, AUSD is about building a more egalitarian economic network. Income from AUSD is shared across network participants, and we’re teaming up with businesses and chains to let them use this cash flow in the manner that suits their business," van Eck disclosed.
Agora argues that this extra cash flow will enable projects to create better products and user experiences.
Polygon’s (POL) AggLayer
The AggLayer is an interoperability solution at the core of Polygon’s (POL) 2.0 architecture, which aims to horizontally connect as many chains as possible on top of Ethereum using zero-knowledge technology.
According to Polygon (POL), the AggLayer would offer near-instant, atomic, and fungible asset transfer across chains in its finished state. However, the protocol only provides a unified bridge to projects built on Polygon’s (POL) tech stack, the Chain Development Kit (CDK). Plans to roll out version 0.2 with broader EVM chain support are set for December 2024.
The AggLayer secures chains using “pessimistic proofs,” cryptographic guarantees designed to allow chains to share a bridge without additional trust assumptions. The mechanism tries to prevent chains from withdrawing more assets than they have deposited in the bridge by checking the state of the chain, chain accounting, and the accounting of all connected chains before allowing transfers.
On the Flipside
- Despite AUSD’s claimed advantages, it has yet to achieve mass recognition and adoption in the crypto space, with an estimated market cap of $70 million. For context, market leader Tether USDT has a market cap of over $120 billion.
- No date was disclosed for when AUSD will go live on the AggLayer.
Why This Matters
Native AUSD support offers yet another key piece required to make Polygon’s AggLayer goals a reality.
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