Polygon zkEVM is running at a loss of over $1M annually

Researcher Lorenz Lehmann revealed that Polygon acquired Hermez for $250 million in 2021 and renamed it Polygon zkEVM. Lehmann added that deployment of the zkEVM has never been upgraded to use blobs, and the chain is currently running at a loss of more than $1 million per year.

The organization has revealed its plans to phase out Polygon zkEVM by 2026, marking the end of its zero-knowledge scaling efforts. The Ethereum side-chain also plans to pivot, focusing on the PoS and AggLayer with leadership from CEO Nailwal.

Nailwal becomes CEO of Polygon Foundation

Agglayer will usher in the next phase of the Internet : The Trustless Internet https://t.co/zFjR3LGzAF

— Sandeep | CEO, Polygon Foundation (※,※) (@sandeepnailwal) June 16, 2025

Sandeep Nailwal, CEO and co-founder of Polygon Foundation, believe that with a healthy treasury and several hundred million in cash, Polygon is in a great position to keep building for the long term. Nailwal disclosed that Polygon PoS will focus on stablecoin payments and real-world assets (RWA) while AggLayer will continue in its efforts to build a trustless Internet of Blockchains.

The foundation’s co-founder said the first milestone of the Polygon PoS’s Gigagas roadmap is live in testnet and will push network capacity beyond 1,000 transactions per second in early July, which is only the start. Nailwal disclosed that blockchain already plans to move to zero reorgs and 1-second finality with >5000 TPS achieved in a devnet environment.

“I’ve always stayed away from moving into the CEO role because I’ve been focused on building PF as an institutionally governed foundation. But right now, Polygon needs clear direction and focused execution and that means stepping up.”

–Sandeep Nailwal, CEO and Co-founder of Polygon Foundation.

The firm believes the new upgrade will put Polygon PoS amongst the most performant blockchains by September to October. The company also said it has a clear path to scale to 100k+ TPS over the next few years. According to Nailwal, the upgrades increase the economic viability of the protocol and, thereby, the value of POL stakes.

As part of the company’s plans for AggLayer, the CEO said that AggLayer v0.3, which has been in the pipeline for some time, will launch on June 30 with improved features. Nailwal added that the AggLayer v0.3 is complete except for its fast interop, which the company anticipates will be completed by the end of Q3.

According to the organization, the AggLayer Breakout program will continue to spin off projects, resulting in an increased focus on Polygon PoS and Agglayer and massive airdrops to POL stakers. Nailwal also highlighted that the firm was in the business of building blockchain networks, and ZK is an important tool for bringing internet-level scalability to blockchains.

Polygon hopes to spin out more zero-knowledge research efforts

Polygon noted that it has contributed a lot to ZK and will continue to do so in a more neutral way by spinning out more of ZK’s research efforts. Nailwal unveiled the firm’s next project, Polygon Zisk, which will be led by Jordi Baylina.

Polygon said it was excited to see several large market makers returning to the table recently to make markets in POL after the SEC dropped its investigations and lawsuits related to MATIC as a security. Nailwal added that the Foundation will also engage in educational campaigns to ensure everyone is aware of the upgrade of MATIC to POL.

Nailwal noted that during 2021-22, the company tried to institutionalize the project by laying the foundation for scaling the blockchain through stages. Ethereum later got into an existential crisis that pulled Polygon and the entire Ethereum ecosystem right back to the initial stages. He revealed that POL has been dragging lower as Ethereum layer-2 solutions like Base and Arbitrum increase in TVL