On Wednesday, October 11, 2023, cryptocurrency exchange Bitfinex announced the enablement of Tether Gold (XAUt) transactions through the Polygon zkEVM transport layer. The new functionality, which became effective from 03:00 PM UTC on the said date, allows Bitfinex customers to deposit and withdraw Tether Gold on the platform utilizing this advanced Layer-2 (L2) Rollup solution.
Following the integration of XAUt onto Polygon zkEVM, this initiative embodies a significant stride toward enhancing transaction efficiency and security. Polygon zkEVM, being in its Beta phase, is acclaimed for its Zero Knowledge (ZK) scaling solution, akin to the Ethereum Virtual Machine (EVM). This equivalency implies that the extensive array of existing smart contracts, developer tools, and wallets can function seamlessly on this layer, thereby broadening the horizon for digital asset transactions and applications.
Polygon zkEVM is engineered to drastically reduce transaction costs by leveraging the prowess of ZK proofs, an aspect that is crucial for the XAUt transactions on Bitfinex. The reduction in transaction costs is achieved through a minimized zkSNARK footprint size in L1, which in turn lowers the total cost of usage for end-users, culminating in an enhanced user experience.
Moreover, the framework promises high performance marked by fast network finality and frequent validity proofs, courtesy of Polygon Zero technology, which is termed as the fastest ZK proof in the world. The Recursive STARK protocol further propels extreme scalability, enabling developers to create a diverse array of decentralized applications (dApps) for varied user experiences.
The security facet of Ethereum is inherited in the L2 realm with an added advantage of L2 batching for scaling. ZK proofs play a pivotal role in ensuring transaction validity and shielding user funds from potential threats. The assurance that the stored information remains immutable adds another layer of trust and reliability to the framework.
The XAUt-Polygon-zkEVM contract address for these transactions is 0xa7Bd526e698a7EE6261982607D7B64cc8e7be0ef. The contract serves as a bridge for these assets on the Polygon zkEVM, devoid of issuance or redemption by Tether. Bridged versions of Tether tokens are categorized as third-party services and technology as per Tether Gold’s Gold Token Terms of Sale and Service.
Despite the correlation, Polygon PoS and Polygon zkEVM are distinct chains. Users are urged to exercise caution and ascertain the accuracy of the token contract address and the chain used for transactions to avert potential complications.
In essence, the collaborative endeavor between Bitfinex and Polygon aims to streamline and secure Tether Gold transactions, reflecting the ongoing efforts to foster a more flexible and secure digital asset ecosystem.
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