What is polygon?
Polygon is a cryptocurrency that uses the symbol MATIC, as well as a platform that helps Ethereum blockchains scale and connect.
Polygon was formerly called Matic Network when it first launched in 2017. It was created by Jaynti Kanani, Sandeep Nailwal and Anurag Arjun — Kanani is Polygon’s current CEO.
Polygon has some major investors behind it like billionaire Mark Cuban, who owns the Dallas Mavericks.
The platform was initially envisioned as a scaling solution for a variety of blockchains but with the rebrand to Polygon, the focus moved to Ethereum. Polygon operates over top of the Ethereum blockchain and uses a modified proof-of-stake consensus mechanism.
Polygon is not in competition with Ethereum — Polygon is dependent on Ethereum, and vice versa.
The MATIC cryptocurrency is an ERC-20 token and is used for payments between network participants. MATIC is capped at 10 billion tokens and many of these – about 7.53 billion – have already been issued. MATIC tokens traded for less than five cents for much of the cryptocurrency’s history, however the price has recently increased.
Polygon also launched a subsidiary called Polygon Studios in 2021. It focuses on blockchain gaming and non-fungible tokens, which are cryptographic tokens with unique identification codes that can be used to represent real-life items such as art.
Table of Contents
How does Polygon work?
Polygon is a “Layer 2 solution,” which means it works on top of the Ethereum platform — it aims to improve on Ethereum and bring mass adoption to the platform.
A key challenge for Ethereum is scalability. Polygon addresses some of the limitations of Ethereum, such as high transaction fees and slow transaction processing speeds.
Polygon accomplishes this by using a modified proof-of-stake consensus procedure, which sees the transaction confirmation process completed in a single block.
In comparison, the traditional proof-of-stake method requires many blocks to reach consensus. The result is transactions that can be processed quicker and cheaper.
“Commit chains” are important to the functioning of Polygon.
These are unique transaction networks that operate adjacent to the main blockchain and work by bundling transactions and approving them all together. These commit chains — also known as “side chains” or “child chains”— are useful for supporting the many DeFi protocols available in Ethereum. The Polygon software developer kit is the core of the network.
It allows developers to create Ethereum-compatible, decentralized apps as side chains that can be connected to the main blockchain.
At this time, Polygon focuses on Ethereum blockchains, but there are plans to develop the product to support other blockchains in the future.
What are some of the advantages of Polygon?
- Quick transaction speeds. Polygon’s average block processing time is 2.1 seconds thanks to its modified proof-of-stake consensus procedure.
- Low transaction fees. The average transaction fee is $0.01.
- Polygon is a good fit for decentralized finance (DeFi) apps
What are some of the disadvantages of Polygon?
- Polygon functions parallel to the Ethereum blockchain, which poses risks. If Ethereum was to experience serious problems, Polygon would also be impacted
- The MATIC token doesn’t have many uses outside managing and securing the Polygon platform. Unlike other cryptocurrencies, MATIC isn’t used for everyday transactions
- Polygon is facing competition from similar scaling solutions
How do you buy MATIC?
MATIC can be bought on cryptocurrency exchanges like Coinmama, in the same way other cryptocurrencies. MATIC can typically be purchased with a bank transfer, credit card, debit card or buy using fiat currencies on a cryptocurrency exchange.If a cryptocurrency exchange offers staking services, users may also be able to earn interest on MATIC. The official Polygon Bridge can also be used to deposit and withdraw MATIC.
What are some common DApps that use Polygon?
Thousands of DApps use the Polygon network, here are some common examples.
– Opacity is a decentralized service for storing files. Bitwarden is used to manage passwords and Opacity uses end-to-end encryption to keep files secure.
– Mai Finance is a service that allows users to borrow stabelcoins without having to sell their cryptocurrency assets and without having to pay interest.
– Quickswap works in a similar way to Unisawp — users swap tokens from liquidity pools and are able to earn transaction fees.
Does Ethereum 2.0 eliminate the need for Polygon?
Ethereum 2.0 is an upgrade to the Ethereum blockchain that aims to improve speed, scalability and efficiency. The main difference is that Ethereum uses a proof of work mechanism and Ethereum 2.0 uses a proof of stake mechanism.
This update begs the questions — will Ethereum 2.0 eliminate the need for Polygon?
Many experts say, no. Polygon is still expected to be faster and cheaper than Ethereum 2.0.
As DApps start using on-chain solutions like Ethereum 2.0, it is possible scalability potential will be pushed to the limit. The network could experience the same load conditions and gas prices as before. Polygon will remain essential to the Ethereum blockchain by adding an extra layer in scalability.
Conclusion
Polygon is a cryptocurrency as well as a protocol and framework that connects Ethereum blockchain networks. The Polygon platform operates over top of Ethereum and addresses some of the limitations of Ethereum, such as high transaction fees and slow transaction processing speeds. This is achieved through Polygon’s modified proof-of-stake consensus procedure, which sees the transaction confirmation process completed in a single block.
MATIC is Polygon’s ERC-20 token, which is used to secure and govern the Polygon network, as well as to pay transaction fees.
Polygon was recently the only blockchain company chosen to be included in Disney’s 2022 Accelerator, which provides companies with guidance and mentorship in business development.
