Polygon

Polygon, formerly known as Matic Network, is a scaling solution designed to provide tools to increase speed and reduce the cost and complexity of blockchain network transactions. At the center of Polygon’s vision is Ethereum, a platform with a range of decentralized applications where you can join virtual worlds, play games, buy art and participate in a range of financial services. However, so much activity on the blockchain makes Ethereum almost unusable due to rising transmission costs and traffic congestion.

In short, Polygon calls itself a layer 2 network, meaning it acts as an additional layer to Ethereum and does not attempt to change the original blockchain layer. Like its geometric namesake, Polygon has many sides, shapes, and uses, and promises to provide a simpler framework for building interconnected networks. Polygon wants to help Ethereum achieve scale, security, efficiency, and utility, and seeks to incentivize developers to bring enticing products to market faster.

Following the rebrand, Polygon retains its MATIC cryptocurrency, Polygon’s native cryptocurrency and an ERC-20 token created on the Ethereum blockchain. The token is used to manage and secure the Polygon network and to pay the network’s transaction fees. Unlike some other cryptocurrencies that have unlimited supply, MATIC has a limited supply, with approximately $7.4 billion in circulation. There will never be more than 10 billion coins in circulation. MATIC serves as a payment and settlement unit between interacting participants within the network.

History of Polygon

Polygon has firmly established itself as the most promising Ethereum scalability project thanks to its highly qualified development team. The expertise behind the team continues to be the driving force behind Polygon’s growth.

Co-founder Jaynti Kanani is the current CEO of Polygon. He developed the project along with co-founder and COO Sandeep Nailwal and co-founder and chief product officer Anurag Arjun. The trio founded Polygon in 2017. At the time, it was called Matic Network.

Initially, they helped support the venture with funds from friends and family in Mumbai. But while Polygon has its roots in India, the platform continues to attract investors from across the globe. Polygon raised more than $450,000 in two rounds of startup funding in 2019. The venture has received approximately $450 million in funding from various investors. Angel investor Balaji Srinivasa and billionaire Mark Cuban are among Polygon’s growing list of backers.

How Does Polygon Work?

The Ethereum blockchain can perform a limited number of transactions per second. The base layer has a throughput rate of approximately 14 transactions per second. Every transaction has a transaction cost, which on Ethereum is called a gas fee. During periods of high network congestion, gas fees increase, and Ethereum gas fees can quickly rise to over $50 to $80. this is a big problem. Having to pay a one-time payment of over $50 per transaction puts Ethereum completely out of reach for most users.

Network congestion also slows down Ethereum blockchain processes, preventing users from participating in smart contracts on the blockchain. For anyone using decentralized finance (DeFi) applications and protocols, trading or buying non-fungible tokens (NFTs), and exchanging, buying or transferring tokens on Ethereum, these questions can quickly add up to hundreds USD fee.

So how does Polygon make it cheaper? To reduce gas costs, scaling solutions like Polygon process transactions on sidechains. Polygon has the potential to process up to 65,000 transactions per second, while Ethereum can only process around 17 transactions per second at best.

And, Polygon is able to offer these to users for pennies on the dollar. Compare that price to Ethereum’s average transaction fee of around $15 per transaction. Since Polygon includes a suite of different protocols, including zero-knowledge (zk) proof varieties, users can choose the scaling options that best suit their use.

In cryptography, a zk proof is a cryptographic primitive used to verify to another party (the verifier) whether a specific statement is valid. At the same time, the prover does not need to provide any additional information other than the fact that the claim is true.

Of the multiple options that project teams can choose to integrate using Polygon, the most popular are Plasma sidechains, proof-of-stake (PoS) blockchain bridges, zk rollups, and optimistic rollups. Matic starts with Plasma sidechains, which are lighter and more secure sidechains.

Like sidechains, Plasma chains are independent blockchains that run alongside the main blockchain. In this case, Ethereum is the “main” or “parent” blockchain. The Plasma chain connects to and communicates with the main blockchain to allow assets to be securely transferred between them.

Due to high demand from developers, Polygon has introduced Blockchain Bridge in its product lineup. PoS bridges allow developers to create DApps on one platform without having to sacrifice the advantages offered by other platforms. Processing batch transactions on its own PoS blockchain eliminates the need for Ethereum to handle all the files itself. Polygon makes Ethereum lighter and faster by batching transactions off the main chain.

Zk aggregates and processes off-chain transaction packages and creates validity certificates to verify the accuracy of each data package. These validity proofs are then sent to the main blockchain. Each validity proof acts as a proxy for the bundle it represents, reducing the amount of data on the main chain. In effect, this approach reduces the time and gas fees required to verify blocks of transactions.

Optimistic rollups use a different type of proof system called fraud proofs. Once a fraudulent transaction is detected, fraud prevention protocols automatically execute and determine the correct transaction based on the data available on the main blockchain. Those who update transaction data on the system need to stake ETH. Therefore, if someone uses optimistic rollups to submit a fraudulent transaction to the Ethereum main chain, their stake will be slashed.

Polygon recognizes that there is no single best solution for every application. Every scaling solution requires trade-offs between security, sovereignty, transaction fees, and transaction speed. Developers should be able to choose the scaling solution that best suits their application. And, Polygon offers the most complete suite of scaling solutions.

Uses of MATIC

MATIC is Polygon’s native cryptocurrency token. Polygon Plasma Chain runs on the PoS consensus mechanism. MATIC will be used to pay for all transactions on the Plasma chain. Therefore, the more projects that use Polygon as an extension, the greater the need for MATIC.

Additionally, MATIC acts as a governance token by granting holders voting rights to decide which of several planned scaling solutions should actually be launched. If the community likes a new layer 2 scaling solution and wants Polygon to integrate it, token holders can vote on whether the solution becomes part of the Polygon product line. Governance voting therefore allows MATIC token holders to vote on the future of Polygon.

Advantages of Polygon

Wide Range of Uses

Polygon successfully uses features such as Plasma, ZK-rollups, PoS, Polygon Edge, and Polygon Supernets, while some of its competitors failed to incorporate these features. The Heimdall architecture helps Polygon remove bottlenecks and make it more scalable. Polygon Edge and Polygon Supernets enable developers to easily launch modular blockchains tailored for specific use cases while still ensuring security.

High Security

Polygon is extremely secure thanks to regular checkpoints that ensure consistency throughout the transaction lifecycle. In addition, there is a local consensus mechanism. Polygon adds an extra layer of security to the architecture, using PoS and Heimdall architecture to make it more secure than its competitors.

Customized

Polygon is highly customizable, enabling developers experienced in Ethereum-based application development to use the programming language of their choice. Additional Ethereum layers and security layers are optional. Therefore, solution providers using Polygon have complete independence to customize it to their needs.

Ethereum Optimization Solution

Polygon is designed to take full advantage of the Ethereum network. With its decentralized approach, Polygon enables the Ethereum blockchain to complete a thousand times more transactions.