Polygon is a second-layer solution developed on Ethereum with the aim of solving this blockchain’s scalability challenge. Ethereum is a popular blockchain with a large number of decentralized applications and transactions. This has increased the cost of running smart contracts on Ethereum and has also decreased its speed. Polygon as a second-layer solution has come to solve this problem. In this article, we are going to cover everything about Polygon, its functions, its purposes, its native token called MATIC, and its wallets. Stay with us.
What is Polygon?
We previously mentioned that Polygon is a second-layer solution for Ethereum. Second-layer solutions are protocols built on the main blockchain. Without making any changes to the blockchain, and without threatening its security and decentralization, they increase the number of transactions it can process per second.
One of the most famous second-layer solutions in the blockchain world is the Lightning network. Lightning lets its users make micropayments off-chain and only record the first and the last transaction on the blockchain.
Polygon is another sample that belongs to Ethereum. Polygon is a framework for creating blockchain networks and second-layer solutions compatible with Ethereum. It’s usually said that Polygon is a second-layer solution itself, but the truth is that Polygon isn’t only a second-layer solution. It is a protocol consisting of a number of solutions. For example, it provides its users with a Software Development Kit (SDK) that helps them in the process of developing Ethereum-compatible second-layer solutions.
Polygon is a proof-of-stake sidechain working in parallel with Ethereum. Exactly like Lightning, Polygon eliminates the need for recording all transactions on the main blockchain. It has a much higher speed and much less fees in comparison with Ethereum. Because Polygon is compatible with the Ethereum Virtual Machine (EVM), developers can easily transfer their decentralized applications to it. This way, they can benefit from Ethereum’s features in a more scalable way. In 2021 and along with users’ increasing demand for more scalable services, Polygon’s popularity increased.
Who created Polygon?
Polygon was developed in October 2017. It was named MATIC at that time, and it was founded by three Indian developers called Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. Their purpose was to solve Ethereum’s scalability problem. The initial idea belonged to Jaynti Kanani. While playing the popular game, Crypto Kitties, he figured out Ethereum’s low scalability. Ethereum at that time had more than 12,000 users and it really wasn’t able to handle that large number of transactions. With the help of Sandeep Nailwal and Anurag Arjun, they developed a network whose token is now among the 20 largest cryptocurrencies by market cap (at the time of writing).
On February 9, 2021, MATIC was renamed to Polygon. While working on Ethereum, Polygon aims to become a communication bridge between different blockchain networks. This is what we need for the blockchain revolution and its global adoption. Polygon is no longer a simple scalability solution, but a protocol designed for developing different scalability solutions and connecting them.
How does Polygon work?
In the previous parts, we talked about Polygon’s main purposes and the reasons for its popularity among users. In this part, we will go through its technical details and its unique innovations for achieving these purposes in more detail.
Compatibility with Ethereum
One of Polygon’s most interesting features is its multilayer design. The Polygon network consists of four layers, namely “the Ethereum layer”, “the security layer”, “the Polygon network’s layer”, and “the execution layer”. The Ethereum layer lets it access Ethereum’s advantages including the security and the coding ability. It is actually a collection of smart contracts that does functions like finalizing the transactions and staking.
In the previous parts, we have repeatedly referred to Polygon’s scalability. Polygon owes its scalability to its proof-of-stake consensus algorithm. Like all other PoS networks, Polygon users can stake their MATIC tokens and earn rewards. For this purpose, they have to send their MATIC tokens to a contract called the Staking Management Contract and become a Polygon full node. Polygon full nodes are responsible for validating the transaction and building the blocks.
Polygon fees are significantly lower than Ethereum’s. The fee for conducting an Ethereum transaction is sometimes more than 10 dollars, while Polygon’s fee equals 0.0009 dollars.
The Polygon team claims that increasing scalability in this network wasn’t at the cost of victimizing security. Polygon provides its users with two sets of sidechains, namely the stand-alone chains and the secured chains. The stand-alone chains have their unique consensus mechanism and are not reliant on Ethereum. Running a stand-alone chain and ensuring its security is not an easy task for a wide range of users. Therefore, secured chains are better options for them. Secured chains use a unique model called security-as-a-service, whose security is provided either by Ethereum directly, or by a group of trusted validators. A great amount of Polygon’s activity is done on this layer. It manages the pool of validators. It can act as a meta-blockchain in parallel with Ethereum, or it can run directly on Ethereum and make use of Ethereum’s miners as its validators.
One of Polygon’s other interesting features is its independence from Ethereum. A report from the blockchain development platform called Alchemy revealed that the number of decentralized applications on Ethereum is growing so fast, and is becoming independent from Ethereum. At the time of this report being published, 3,000 applications were run on Polygon, and it’s interesting to know that the number of applications being run on Ethereum independently was more than the number of apps being run on Ethereum and Polygon.
Polygon provides a wide range of modules that developers can use to build their unique customized blockchains. Some of these modules include consensus, governance, different execution environments, and various methods for running the virtual machine. In general, by Polygon’s modular design, we mean the ability to develop independent customized blockchains with diversified functions.
With all the features we previously covered, it’s obvious that Polygon provides a comfortable pleasant user experience. Near-zero fees, higher speed, and immediate finalization of the transactions are all provided to increase the quality of the user experience. Polygon has also provided the developers with an easier-to-use environment and has minimized the complexities. Developing projects on Polygon doesn’t require much technical knowledge and is permissionless.
Everything about the MATIC token
MATIC is Polygon’s native token. Like all other cryptocurrencies, MATIC can be bought and held as a store of value. Besides, it is used for paying the fees on Polygon, and also as the staking reward. At the time of writing, each unit of MATIC is being traded at $0.49. MATIC’s all-time high goes back to May 2021 when its price reached $2.46. At the time of writing, Polygon has a market cap of more than 3.9 billion dollars. MATIC has a maximum supply of 10 billion units, of which nearly 8 billion units have been issued.
Polygon (MATIC) wallets
Like all other cryptocurrencies, you need digital wallets to store Polygon (MATIC). Since Polygon is completely compatible with Ethereum, you can use all Ethereum wallets to store MATIC. Some of the best wallets for storing MATIC include:
- Ledger (hardware)
- Trezor (hardware)
- Trust Wallet (software)
- MyEtherWallet (software)
- MetaMask (software)
- Atomic (software)
In this article, we tried to go through Polygon and its functions, and also take a look at its native token called MATIC. After reading this article, you have definitely figured out that Polygon’s main goal is to overcome Ethereum’s scalability challenge. By the way, Polygon has gone one step further and has designed a protocol others can use to develop their own scalability solutions. What do you think about Polygon and its purposes? Do you find it successful in achieving its goals?