What is Polygon (MATIC)?

Polygon (previously known as Matic Network) is a popular blockchain scaling solution that aims to enhance the scalability and interoperability of existing blockchain networks, particularly Ethereum. Launched in 2017, Polygon has gained significant attention and adoption within the blockchain community due to its focus on addressing major blockchain platforms’ fundamental limitations.

As a layer-two scaling solution for Ethereum, Polygon is an organization that was built by Jayanti Kanani, Sandeep Nailwal, Anurag Arjun and Mihailo Bjelic. Scalability problems on the part of Ethereum were always experienced with the resultant congestions and high transaction fees. Polygon was initially known as Matic Network. It then changed to Polygon in February 2021 to reflect its ambitions to become an across-chain network.

Architecture:

The architecture approach of Polygon is modular and flexible, such that developers can create any number of blockchains to combine them with Polygon. Scalability is achieved securely with the help of a mix of plasma systems, side chains, and the Ethereum blockchain primary network.

Sidechains: Polygon processes transactions on a sidechain not linked with the main Ethereum blockchain, thus reducing transaction traffic and costs. The sidechains comply with Ethereum, which facilitates the movement of assets between the mainchain and the sidechains.

Plasma Framework: Plasma refers to an infrastructure that enables developers to create decentralized applications (DApps) that are scalable as well as safe. Polygon employs Plasma to quicken transaction validation and boost throughput in one fell swoop, thus taking advantage of economies of scope.

POS (Proof of Stake) Consensus: However, the polygon blockchain uses the POS chain that boosts its energy efficiency in contrast with other poW blockchains. The process of new block creation is based on the “amount of staked cryptocurrency” that validators stake as “collateral.”

Polygon’s Components

Polygon PoS Bridge: It bridges the Polygon PoS chain and the Ethereum, which helps quickly transfer assets.

Polygon Validator: Validators are very important since they verify transactions and create more blocks for the network.

Interoperability and Compatibility:

An excellent advantage that Polygon has is how compatible and integrable it is with Ethereum. The Polygon PoS Bridge allows easy transfer of assets between the Ethereum mainchain and the Polygon PoS chain. For this reason, the project should use polygon scalability while maintaining connectivity with Ethereum’s users and its existing environment.

Use Cases and Adoption

Polygon has gained significant traction across various industries, and its versatile architecture makes it suitable for a wide range of use cases:

Decentralized Finance (DeFi): The scalability problem coupled with exorbitant Ethereum gas fees has prompted many DeFi initiatives to use Polygon instead. Platforms such as Aave, SushiSwap, and Curve Finance have been deployed on Polygon to give users an economically viable and effective encounter.

Non-Fungible Tokens (NFTs): Adoption has also been witnessed in the NFT world, with projects like OpenSea and Decentraland moving into the polygon platform. The low transaction costs give Polygon an edge over other platforms supporting NFT enthusiasts and artists.

Gaming: Polygon is currently one of the solutions the gaming industry looks up to handle in-game transactions and develop blockchain games. These lower fees and faster transaction speed add to the general experience of playing the game for users.

Enterprise Solutions: The Polygon does not operate exclusively in the DApps arena but also attracts attention to corporate solutions. It is an excellent choice for business enterprises looking into blockchain technology due to its scalable structure and interoperability with Ethereum.

Polygon’s Token (MATIC):

MATIC is the native utility token used by Polygon. It serves various purposes within the ecosystem, including:

Transaction Fees: The transaction fees paid on Polygon are made using MATIC. It creates a new application for the token besides merely being a form of speculation.

Staking: MATIC token holders can vote and decide the network’s consensus process. As a reciprocation, they can be rewarded for protecting the network.

Governance: The holders of MATIC can vote for proposals and upgrade protocols that they find more efficient.

Challenges and Competition:

The Polygon platform has gone a long way in solving the scalability concerns, but its competitors make it even more challenging considering the emergence of new blockchains. Other Layer 2 solutions, such as optimistic rollups, zk-rollups, etc., focus on achieving the same scalability objective, and the area keeps changing.

Moreover, is Ethereum 2.0 in progress within Ethereum itself. It intends to transition Ethereum from a Proof-of-work to a Proof-of-stake consensus mechanism, increasing scalability and long-term viability. Whether Ethereum 2.0 succeeds significantly might affect Layer 2 solutions like Polygon’s acceptance.

How does Polygon work?

Polygon is like a bullet train in a subway moving at fewer stops that are comparably less than regular trains. This parallel blockchain is very fast. It links back to the main Ethereum chain (that can be thought of as the local train in this analogy).

Polygon employs a proof-of-stake consensus mechanism to generate new MATIC and maintain the network’s security. As such, you can also make money by simply leaving your MATIC idle.

However, it is a validator that does all the work – it checks the transactions and adds them to the blockchain. They, in return, get a share of fees created by MATIC. Running a full-time node or computer and stamping your MATIC is a promise that comes with becoming a validator. For instance, some of your staked MATIC may be erased for any mistake or fraudulent activities, even with lousy net access.

Through a validator, delegators stake MATIC indirectly. It entails a less binding form of staking. However, it would help if you researched beforehand; otherwise, a malicious or erroring validator may steal your staked MATIC tokens.

What Are Some Ways In Which You Can Use The Polygon Network?

Like on the leading Ethereum network, users can execute smart contracts and transactions cheaply. Most times, it is only a few cents. Try using decentralized exchange platforms like QuikSwap or SushiSwap, get involved in yield-producing lending and saving protocols such as Aave while at it, have a look at NFT markets like OpenSea and finally join “no-loss prize games” like

Start by sending some bitcoins to a Wallet Compatible with Polygon Network, such as Coinbase Wallet. After that, “mint” some of your crypto, including most commonly stablecoins, into the Polygon network. To this end, you should also set aside a bit of MATIC to transact, in which even one dollar is enough because of the minuscule transaction charges.

Low-fee transactions and instantaneous ones make the Polygon network the perfect environment for practicing with various DeFi protocols at a minimal cost. Always remember that there is lots of uncertainty around DeFi. Start small. Invest an amount you are willing to lose, especially if you’re new here.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.