FLOAT on Layer 2s

The Layer2 space is heating up, if it isn’t hot enough already. During the periods of high Gas fees as ETH approached all time high there was a mass migration to Layer2s, such as Polygon (formerly known as Matic), by defi users to reduce their Gas costs while obtaining the highest yield on their precious crypto assets. Here at Float Protocol we aren’t adverse to Layer2s.

We are here to build the decentralised monetary of the future and for that to occur $FLOAT needs to be an asset which is used in as many different places as possible for it to be viewed as true crypto money. We note the word decentralised however; by moving to Layer2s such as Polygon there is a slight pragmatic tradeoff of decentralisation for the sake of excellent usability.

To use $FLOAT on L2s comes with a number of questions such as:

  1. Do we just transfer $FLOAT and $BANK tokens over via existing bridges e.g. Polygon’s PoS bridge?
  2. What if we built a decentralised bridge Float Protocol controlled bridge? This would allow us the ability to have “canoncial” FLOAT on a different Layer 2.
  3. Do we want a copy of the full Protocol on L2 (incl. Basket and Auctions)?
    1. What will be in the Basket initially, MATIC or WETH, potentially both?
  4. If we start with a bridge then bring the Protocol, how do we deal with duplicate tokens as the FLOAT and BANK will then be mintable on L2?
  5. What sort of integrations would we like to see on L2?

These are all questions to be discussed plus many more not listed here. It will be interesting to hear the community’s thoughts, suggestions and contributions to this discussion.

Keep Floating,
John L

need to share this in discord. until now, know this forum. here is something about my thinking.

actually why L1 is subjected to Matic. maybe arbitrum is a better choice. but time is short. because arbitrum is going to launch its mainnet. i think, we can deploy it to new L2, just use some existed cross-chain techs such as mulitichain.xyz or anyswap or offical bridge in arbitrum etc. no need to spend so lots time to re-construct a decentralised bridge.

i think one basket in ETH L1 is enough. there will be some arbitrige traders to smooth price difference in different L2. that will be more simple and accurate. as for diffent tokens of bank and float, it is already a common situation with so many existed and cross-chain tokens like eth/sushi. maybe there has existed some mature solutions.

to deploy on L2, that can bring some cooperations with other L2 dapp. i think, a Float and bank token can use in L2,that is enough, no need to spend so many time to re-construct.

a mature solution and steady price history is important of Float’s useage. the key is to improve the solutions, to launch V1.1, to write more improvements in other protocol forums to use Float. if market go well, deversifi the basket is also a good option. wbtc is a good choice, not simply matic. because basket colleral really need some verified cryptos, not a bullish token for just several months.

This is not the right time to migrate to sidechains like Polygon and seems like a distraction to me.

Focus on adoption by integrating to other protocols and utilizing the basket by leveraging other protocols.

Can migrate to real layer-2s like Arbitrum and Optimism later.

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I share the same opinion. We should wait before moving to a L2. There are several projects coming which might be a better fit than Polygon (=sidechain + extra token).

Contrary to public opinion here, I would suggest to prioritize Polygon deployment for a multitude of reasons -

  1. DeFi composability - Defi is all about users and projects benefiting from all the protocols being on one chain, so yields can be accumulated and distributed without hassle. Of the blue-chips, Polygon already has SushiSwap, AAVE and Curve. Soon to be launched include Balancer (LM post out), C.R.E.A.M. (sneek peak on twitter), Kyber and mStable . These partnerships and collaborations have been achieved due to users moving funds from Ethereum as well as BSC.
    Compared to other L2s, Polygon is at least 2-3 months ahead of its competition (strictly in this regard) and Float should prioritize go-to-market accordingly.

  2. Small-cap native projects - Polygon DeFi summer has come at the right time, giving lot of DeFi dapps the playground to tinker and launch new products. For instance, Curve v2 (tricrypto pool) is live only on Polygon, as the team wanted to test out the parameters before launching and ETH L1 was prohibitively expensive. Many small-mid cap like ForceDAO, Teller Finance,Pods Finance, Good Ghosting, BarnBridge and Frax Finance will be launching exclusive features or port entirely to Polygon.

  3. User statistics - Polygon currently has over $6B in TVL and over 110k DAU - both numbers going higher with big integrations coming soon. QuickSwap and SushiSwap (Polygon) are consistently among top 5 DEXs across chains. Addresses holding $1M+ have increased from 5% to over 65% over 2 months showing faith of whales and funds in Polygon’s security. More statistics here.
    Polygon-Ethereum PoS bridge is one of the top 10 wallets by ETH value locked in. You can find the ETH locked here. So for FLOAT’s longevity and success on the chain, its unlikely that this dries up anytime soon because of DeFi activities and Polygon’s alignment with Ethereum.

  4. Security - There’s a lot of discussion about Layer 2s in general and what other rollup based solutions provide to the security side. To start off all of the “current” rollup solutions have a central singular node operator, funds are on the onus of that operator. Gas fees on these rollups will not be as low as what people are imagining - mid single digit numbers at least. Similar to current Ethereum L1 fees.
    On the other hand, Polygon is a suite of Ethereum scaling solutions including Plasma, PoS commit chain (live) and Rollups (very soon). The commit chain has over 100 validators deployed on Ethereum and with over $2B of MATIC staked on them. PoS commit chain architecture has 2 layers - Bor (block producer) and Heimdall (validator layer). Every 256 blocks by BOR, a merkle tree is created of hashes and the root is commited to Heimdall that lies on ETH L1 and seats the validators. All the checkpointing, slashing, commit logic lies on Ethereum. So in the case of validator collusion, as in any PoS chain, the community can come together and fork out to create a new Heimdall layer.
    TLDR on security - Yes, Polygon PoS chain is less secure than true rollups but that comes at increased battle-tested nature over 1 year, more than 1M wallets and increasing blue-chips moving over.

TLDR of post - In its nascent stage of iteration, finding product market fit and allowing users to play with the product with small amounts - Float needs a low gas solution to scale. Polygon is live today with solid network effects and helping scale DeFi.


not sure what you mean by “real layer-2s” ?

actually Polygon is just a side-chain. there are aleady logts of discussion about it in twitterr.

Sorry, I’m novice to L2. But below are my thoughts, please feel free to correct me if I’m wrong.

  1. BANK and FLOAT can always be transferred to Polygon using Polygon bridge.
  2. Is there any demand for these assets on Polygon and not on ETH, I believe this is not the case.

Once a project/token is established and there are people want to use it, they are free to use it on any chain. Take USDC for example.

Another angle to think is, if we lift and shift this project from Ethereum to Polygon, would there be more users/adoption on Polygon vs. Ethereum ? Personally I don’t believe it will make a difference until more people knows about the project and participate, Ethereum and Polygon are just a matter of choice at that time.

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In my opinion, Float and the Polygon space’s nascent qualities might well represent a good opportunity to interact with a smaller group of parties pioneering a less crowded area than Ethereum L1.

For example, a Polygon project that might pair well with Float’s ambition to become a crypto unit of account is SuperFluid, a smart contract framework that allows for realtime streaming of tokens for the purpose of, say, subscriptions or ongoing payments for services rendered. While one might argue that L2 could be a distraction, joining an as-yet smaller network could also potentially provide access to a less heavily tapped body of fledgling projects with which to form integrations with a good chance of future returns.


you might want to check this tweet.

The current version of rollups are more centralized than your so-called “sidechains”. Polygon has 100 validators whereas Arbitrum and OP have only 1 central sequencer run by the company.