Polygon shuts down zkEVM after $1.06M in annual losses, shifting focus to scaling PoS and AggLayer for higher performance and utility.
CEO Sandeep Nailwal leads Polygon’s reset by prioritizing 100K TPS scalability, stablecoin payments, and POL staker incentives.
With zkEVM deprecated and SEC pressure lifted, Polygon accelerates PoS upgrades and AggLayer rollout to rebuild user and investor trust.
Polygon has announced the deprecation of its zkEVM chain as part of a major strategic shift led by its new CEO. Sandeep Nailwal, co-founder of Polygon, has taken over leadership of the Polygon Foundation. This is a pivotal move aimed at realigning the protocol’s direction. The focus now turns to enhancing Polygon PoS and scaling its interoperability layer, AggLayer.
Polygon zkEVM Faces Shutdown After Prolonged Losses
Polygon acquired Hermez in 2021 for $250 million and rebranded it as Polygon zkEVM. However, development stalled soon after. The platform failed to integrate Ethereum’s EIP-4844 "Blob" upgrade. It also incurred yearly operational losses exceeding $1 million. From July 2024 to June 2025, zkEVM generated only $286,590 in revenue against $1.34 million in costs. This resulted in a net loss of $1.06 million and a negative 370.1% profit margin.
August 2024 posted the steepest single-day loss at $30,000. Revenue peaked in late 2024, especially in November and December. However, daily income dropped sharply from February 2025 onward. By June 14, zkEVM posted just $36.43 in revenue, incurring $571.47 in daily costs.
Polygon PoS and AggLayer Become Central Pillars
Sandeep confirmed that Polygon PoS and AggLayer will now anchor the ecosystem. Polygon PoS targets stablecoin payments and real-world asset tokenization. Its Gigagas upgrade, now in testnet, boosts network capacity beyond 1,000 transactions per second. The final goal is to hit over 100,000 TPS in the coming years.
Meanwhile, AggLayer v0.3 launches during the week of June 30. This version is nearly complete, with fast interoperability scheduled for Q3. AggLayer will soon unify the Polygon brand and support massive airdrops for POL stakers through its Breakout Program.
Polygon Rebuilds with Sharp Focus
The Polygon Foundation is shifting from institutional governance to startup-style agility. Sandeep believes the crypto space now favors rapid execution over bureaucracy. Besides, the recent clearing of SEC charges on MATIC boosts POL liquidity and market confidence.
Additionally, the Foundation will educate users on migrating from MATIC to POL. Polygon’s strategic reset reflects a bold pivot toward performance, user focus, and protocol-wide scalability.
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