Polygon Crypto (MATIC): How it Works, History, Advantages

Polygon Crypto (MATIC), formerly known as Matic, stands as a burgeoning technology rooted in the Ethereum blockchain. It distinguishes itself by offering heightened scalability through second-layer solutions. Leveraging its multi-chain system, Polygon facilitates the integration of numerous blockchains and networks.

Although the initiative commenced as Matic Network, its evolving scope prompted a rebranding to Polygon, a transformation that mirrors the project’s expansive vision.

The designated digital currency within this network is named Matic. In this article, we delve into the Polygon blockchain network, explore the intricacies of the Matic currency, and provide insights on how to engage in buying and selling.

What is Polygon Crypto (MATIC)?

Polygon, previously known as Matic, is a revolutionary Layer 2 scaling solution designed to address Ethereum’s scalability challenges. At its core, Polygon enhances the functionality and efficiency of the Ethereum blockchain by introducing a framework that allows for the creation of interconnected sidechains. This innovative approach significantly improves transaction speed and reduces costs, mitigating the limitations of the Ethereum main chain.

The journey of Polygon began in 2017 as Matic Network, focusing on solving Ethereum’s scalability and congestion issues. As its scope expanded, the project underwent a strategic rebranding in 2021, becoming Polygon. This transformation marked a broader mission to provide multi-chain scaling solutions, positioning Polygon as a key player in Ethereum’s ecosystem.

The cornerstone of Polygon’s success lies in its unique architecture. By leveraging sidechains, Polygon processes transactions off the Ethereum main chain, enabling faster and more cost-effective transactions. This scalability enhancement has positioned Polygon as a preferred choice for developers and users alike, seeking improved throughput and reduced transaction fees.

Integral to the Polygon ecosystem is the MATIC token, its native cryptocurrency. MATIC serves multiple functions, including facilitating transaction fees, staking to secure the network, and holding future implications for governance participation. With MATIC, users actively engage in securing the network while benefiting from seamless and economical transactions.

Polygon’s impact extends across various sectors, including decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming. Developers find Polygon’s platform flexible and efficient, opening doors to a wide array of blockchain-based applications.

In essence, Polygon Crypto (MATIC) stands as a transformative force, reshaping Ethereum’s scalability landscape and unlocking new possibilities for decentralized applications and blockchain innovation.

History of Polygon Crypto

Among the notable founders of Polygon Crypto, Jaynti Kanani emerges as a particularly compelling figure. His journey from the son of a miner, residing in a modest dwelling on the outskirts of Ahmedabad in Gujarat, western India, to becoming the CEO of a blockchain protocol valued at 6 billion dollars is a testament to the transformative power of dedication and innovation.

Kanani’s early struggles, including challenges in paying school fees, were stark contrasts to his current position. His original aspiration was merely to secure a job that would help settle his father’s debts. However, fate had grander plans for him, leading him to establish and helm a blockchain protocol that has become a significant player in the crypto space.

While serving as a Senior Data Scientist at Housing.com, Kanani identified the scalability and congestion issues within the Ethereum network during an NFT project. Driven by the desire to address these challenges, he embarked on the journey that would culminate in the creation of Polygon. The network officially launched in late 2017, marking the collaborative efforts of Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun.

MATIC Token Overview:

Even with the transformation to Polygon, the MATIC token remains a vital element in the network. Originally an ERC-20 token on the Ethereum network, MATIC now serves dual roles within the Polygon ecosystem:

Payment of Fees:

MATIC is used for transaction fees within the Polygon network, providing a straightforward and efficient means of covering the costs associated with network activities.

Staking and Security:

MATIC plays a crucial role in the staking mechanism, contributing to the security and integrity of the Polygon network. Stakers are incentivized through MATIC rewards for participating in the network’s consensus.

Future Governance Use:

• In the future, MATIC is expected to take on a governance role within the Polygon network. This will empower token holders to propose and vote on network-related decisions, further decentralizing the decision-making process.

Polygon Token Distribution:

• The total supply of MATIC tokens is ten billion, with the following distribution:
  • 3.8% for private sales.
  • 19% for the initial offering on the Binance exchange.
  • 16% allocated to the team.
  • 4% for consultants.
  • 12% for network operations.
  • 21.86% for the foundation.
  • 23.33% for the ecosystem.

Polygon Team Overview:

Polygon’s founding team has deep roots in the Ethereum ecosystem, with their involvement predating the inception of the project. As Matic Network evolved into Polygon, the original team of four Indian developers continued their efforts, and new members joined the team. The original founders are:

Jaynti Kanani (CEO):

Key figure in recognizing Ethereum scalability challenges, initiating the Matic Network, and now steering Polygon’s growth.

Sandeep Nailwal (COO):

Instrumental in operations and strategy, contributing to the overall development and expansion of Polygon.

Anurag Arjun (CPO):

Holds a key role in procurement, contributing to the strategic development of Polygon.

Mihailo Bjelic (Vice Head of Engineering Team):

Head of the engineering team, playing a crucial role in the technical aspects of Polygon’s development.

Advisors:

• The project has enlisted prominent developers and influencers as advisors, including individuals from the Ethereum Foundation, Mythos Capital, EthHub, Coinbase, and former ConsenSys team members. This advisory board brings diverse expertise and perspectives to guide Polygon’s strategic decisions.

Polygon’s approach has drawn comparisons to Polkadot’s work on Ethereum, reflecting its commitment to interoperability and scalability. While not an official title, this comparison captures the essence of Polygon’s mission within the broader blockchain landscape.

Reasons for the Polygon Crypto Project’s Name Change

In 2021, as the Ethereum network grappled with issues related to congestion, prompting a surge in user adoption, the Matic team made a strategic decision to amplify the development of their project. This transformative phase led to the renaming of the network to Polygon, accompanied by a broadened mission. Simultaneously, Polygon unveiled a new roadmap, signaling a commitment to integrating cutting-edge technologies such as rollups and Valdium. These advancements aimed to enhance the overall user experience within the network. Notably, despite the rebranding, Polygon retained the name of its proprietary digital currency, Matic, which continues to serve as the payment and settlement unit among network users.

How the Polygon Crypto Network Operates

Polygon transcends being a mere scaling solution for Ethereum; it functions as an interface connecting various blockchains to the Ethereum ecosystem. To grasp its role, one must consider the promises of Ethereum 2.

Ethereum 2 envisions an interconnected network of independent blockchains known as shards, each possessing distinct data, features, and characteristics. These shards essentially operate as individual blockchains supported by the Ethereum network. However, with the full deployment of Ethereum 2 still on the horizon, Polygon steps in to bridge the existing gap between Ethereum 1 and Ethereum 2. In doing so, Polygon offers users today a glimpse into Ethereum’s future promises through two integral components:

1. Polygon Framework
2. Polygon Protocol

Polygon Framework:

The Polygon Crypto platform simplifies the process of launching Ethereum-compatible blockchains with a user-friendly, one-click solution. As this segment evolves, it provides an extensive set of modules for deploying blockchains with customized features, staking capabilities, and more. The Polygon SDK (Software Development Kit) empowers developers to effortlessly launch their own Ethereum-linked blockchains. Comparable to WordPress for website creation or Canva for graphic design, Polygon SDK streamlines the blockchain implementation process, making it accessible to a broad audience.

Polygon Protocol:

Polygon serves as a web or internet network that interconnects disparate blockchains. Additionally, the Polygon protocol allows any blockchain to leverage the Ethereum blockchain for security or opt for its own security modules. The strategic advantage of utilizing Ethereum for security lies in its large decentralized pool, which is already valued at billions of dollars. This integration ensures a robust security framework for the interconnected blockchains within the Polygon network.

Polygan Network Architecture

The Polygan network operates on a comprehensive four-layer system, comprising two mandatory layers and two optional layers:

Execution Layer:

This layer involves the implementation of the Ethereum Virtual Machine (EVM), responsible for executing smart contracts within the Polygan network.

Network Layer (Polygon Network Layer):

Encompassing existing blockchain networks, this layer is tasked with block generation, internal consensus, and transaction integration within the Polygan network.

Security Layer:

Focused on providing essential services for authentication and transaction confirmation, this layer reinforces the security infrastructure of the Polygan network.

Ethereum Layer (Ethereum Layer):

Serving as a collection of Ethereum smart contracts, this layer assumes responsibility for the final control and verification of staking, dispute resolution, and message transmission within the Polygan network.

Polygon Grid Features

The Polygan network is versatile, capable of generating various types of chains such as Optimistic Rollup, ZK Rollup, stand-alone rollup, or any other type required by developers. Additionally, Polygon transforms Ethereum into a comprehensive multi-chain system, often referred to as the Internet Blockchain. This multi-chain system shares similarities with other frameworks like Polkadot, Cosmos, Avalanche, etc. However, it uniquely benefits from Ethereum’s security, active ecosystem, and open-source nature.

Key Features of Polygon Crypto include:

Scalability:

Facilitates fast, low-cost, and secure transactions on sidechains, contributing to the overall scalability of the Polygan network.

High Throughput:

Supports a remarkable throughput, accommodating up to 7 thousand transactions per second in each side chain.

User Experience:

Offers a seamless and user-friendly interface, ensuring a smooth transition from the main chain to various sidechains, mobile apps, and SDKs.

Security:

Involves the participation of on-chain operators in the Proof-of-Stake (PoS) system, enhancing the overall security posture of the Polygan network.

Public Sidechains:

Sidechains within the Polygan network are inherently public, devoid of licensing requirements, and compatible with multiple protocols. This openness supports a diverse ecosystem, aligning with the principles of decentralization and inclusivity.

Polygon Applications Beyond Scalability

While Polygon’s primary purpose is to enhance the scalability of Ethereum, its utility extends far beyond, finding applications in various real-life scenarios. Some notable applications include:

Lending Platforms:

Polygon serves as a fundamental component in lending platforms, offering users the ability to secure loans and borrow capital. Users can apply for loans on the Polygon platform, leveraging Polygon’s collateral. Lenders, utilizing specific protocols within the network, assess users’ creditworthiness and extend loans if approved. Polygon acts as a trusted third party in this process, eliminating the need for additional intermediaries such as traditional banks. The online nature of the platform facilitates a faster and more efficient lending process.

Games:

The integration of blockchain into the gaming industry has introduced transformative changes in recent years. While blockchain games are still working towards achieving the widespread popularity of traditional computer and console games, Polygon plays a crucial role in overcoming some of the limitations. With its Commit Chain technology, Polygon provides game creators with the tools to develop more effective and popular games. This addresses issues related to speed and performance, enhancing the overall gaming experience.

Fast Payments:

Polygon serves as an optimal platform for decentralized applications (DApps) to execute transactions with higher speed and lower costs. Its architecture and infrastructure make it well-suited for facilitating fast and efficient payment processes within the decentralized ecosystem. This feature contributes to the broader adoption of DApps that require swift and cost-effective payment mechanisms.

In essence, Polygon’s versatility expands its impact beyond blockchain scalability, influencing diverse sectors such as finance, gaming, and decentralized applications, ultimately contributing to the broader adoption and integration of blockchain technology into everyday life.

Projects Developed on Polygon

Polygon has become a preferred scalability solution for numerous projects, elevating its status above competitors. Some noteworthy projects developed on Polygon include:

EasyFi:

A lending platform that specializes in supporting low collateral loans. EasyFi leverages Polygon’s infrastructure to provide users with a seamless and efficient lending experience, contributing to the broader adoption of decentralized finance (DeFi) practices.

Cometh:

A DeFi game operating on the Ethereum blockchain, Cometh introduces a unique gaming experience where players can earn valuable tokens by predicting the movement of various in-game objects. By utilizing Polygon’s scalability solutions, Cometh enhances the overall performance and speed of its decentralized gaming platform.

Aavegotchi:

A DeFi trading game centered around non-fungible tokens (NFTs). Aavegotchi incorporates Polygon’s capabilities to create a decentralized and engaging trading environment, enabling users to interact with NFTs in a secure and efficient manner.

Polymarket:

A prediction market platform where users can earn money by speculating on real-world events. By leveraging Polygon’s scalable infrastructure, Polymarket enhances the speed and cost-effectiveness of its prediction market, providing users with a seamless and responsive experience in the world of speculative trading.

These projects illustrate the diverse applications of Polygon across lending, gaming, decentralized finance, and prediction markets. The successful implementation of these projects highlights Polygon’s effectiveness as a scalable and versatile blockchain solution, attracting developers and users alike to explore the possibilities of decentralized applications on its network.

Polygon Platform Competitors

Polygon distinguishes itself from competitors by prioritizing compatibility with the Ethereum Virtual Machine (EVM), making it an appealing choice for developers proficient in the Solidity programming language. This approach positions Polygon as an attractive option, leveraging Ethereum’s strengths to win over developers and users from other competing blockchains.

Key Competitors:

Polkadot:

Considered one of Polygon’s primary competitors, Polkadot operates as a multi-chain network designed to address issues of interoperability, scalability, and slow transactions. Polkadot aims to connect different blockchains to overcome the existing gaps in the digital currency space.

Cosmos:

Cosmos functions as a decentralized network comprising independent yet interoperable blockchains. Similar to Polkadot and Polygon, Cosmos seeks to eliminate barriers between different blockchains, promoting seamless communication and collaboration.

Avalanche (AVAX):

An open-source platform enabling the development and implementation of smart contracts and decentralized applications. Avalanche boasts high transaction speeds and avoids scalability challenges, positioning itself as a competitor to Polygon in the blockchain space.

Important Polygon Collaborations:

Polygon’s strategy of offering higher speed and lower costs has led to collaborations with significant projects, further solidifying its position in the blockchain ecosystem. Some noteworthy collaborations include:

Cooperation with Decentraland:

Decentraland, a prominent Metaverse project on the Ethereum network, faced challenges with high fees and slow transaction speeds. In response, Decentraland integrated Polygon into its supported networks, reducing disruptions and enhancing the efficiency of transactions.

Cooperation with the Opera Browser:

To enhance user access to decentralized applications, the Opera browser integrated with Polygon. Users of the Opera browser can conduct transactions with Polygon’s native token, MATIC, alongside support for other blockchains like Bitcoin and Solana.

Cooperation with OpenSea:

OpenSea, a leading NFT buying and selling platform, integrated with Polygon to address the increased transaction volume and rising costs. This collaboration streamlines peer-to-peer transactions of NFTs, making them more accessible and efficient.

Supernet Polygon:

Polygon introduced the Supernet chain as a feature to improve its standing and attract users. The Supernet chain facilitates the creation of new blockchains beyond Ethereum, providing developers with a streamlined process. The SX network, a specialized DeFi network, was developed using the Polygon Supernet platform, showcasing Polygon’s commitment to innovation and adaptability.

Polygon Roadmap

Polygon’s roadmap reflects its multifaceted nature, offering a versatile platform that facilitates the development of interconnected networks. The core objectives outlined in Polygon’s roadmap include:

Communication Protocol:

Polygon is positioned as a communication protocol that connects blockchains, simplifying the exchange of data between them. It acts as a facilitator for seamless communication and data sharing, enabling the execution of smart contracts across interconnected networks.

Security and Scalability Solutions:

Utilizing its plasma structure and decentralized validation model, Polygon prioritizes asset security while providing substantial scalability solutions for the Ethereum blockchain through its side chains. This approach addresses the challenges associated with congestion and transaction speeds on the Ethereum network.

Ethereum Development and Efficiency:

Polygon’s ultimate goal is to contribute to the development, security, and efficiency enhancement of the Ethereum blockchain. By creating an environment conducive to swift and secure development, Polygon aims to incentivize developers to deliver compelling products within shorter time frames.

Impact of Ethereum 2 Launch on Polygon:

The launch of Ethereum 2, a significant upgrade to the Ethereum network, has notable implications for Polygon:

First Scaling Solution:

Polygon is recognized as the first scaling solution for Ethereum, earning widespread acceptance from users. The substantial influx of billions of crypto dollars from prominent players in DeFi has elevated Polygon into a formidable blockchain in its own right, shaping the future of the Matic currency.

Flexibility and Scalability:

The flexibility and scalability inherent to Polygon have positioned it as an attractive alternative for blockchain projects seeking to overcome Ethereum’s limitations. This potential for expansion extends beyond Ethereum’s ecosystem, fostering the consideration of Polygon for various decentralized financial applications.

Decentralized Finance (DeFi) Leadership:

The analysis of Polygon suggests that it is emerging as a leading platform in the decentralized finance (DeFi) sector, poised to sustain its operations well into the future. Its ability to adapt, scale, and foster innovation makes it a prominent player in the evolving landscape of decentralized finance.

In summary, Polygon’s roadmap underscores its commitment to facilitating seamless communication between blockchains, ensuring asset security, and addressing scalability challenges. The platform’s strategic positioning and adaptability suggest a promising trajectory within the decentralized finance space, with a continued impact on the blockchain ecosystem.

Polygon-Ethereum Interchain Bridge:

The interaction between Polygon and Ethereum is facilitated by an interchain bridge, serving as a robust two-way channel. This bridge incorporates Proof of Stake (PoS) and Plasma security mechanisms, ensuring the secure transfer of tokens between the two networks. By leveraging this bridge, users gain the ability to seamlessly move their tokens without reliance on intermediaries and without the associated risks of market liquidity constraints.

Key Features:

• High Transaction Speed: The interchain bridge enhances transaction speed, providing users with efficient and swift token transfers.
• Decentralization: The bridge contributes to decentralization, aligning with the principles of blockchain technology.
• Low Cost: Transactions conducted through the bridge are associated with low costs, making it an economical choice for users.
• Flexibility: The bridge offers flexibility in transactions, accommodating various user needs within the interconnected Polygon and Ethereum ecosystems.

Token Transfer Process:

• Locking Tokens (Ethereum to Polygon): To transfer tokens from Ethereum to Polygon, users initiate the process by locking their tokens in a smart contract on the Ethereum blockchain.
• Minting Tokens (Polygon): Corresponding tokens are then minted on the Polygon network, maintaining a one-to-one ratio with the locked tokens on Ethereum.
• Withdrawing Tokens (Polygon to Ethereum): To withdraw tokens from Polygon, users engage in the process of burning tokens within the Polygon network, followed by the unlocking of equivalent tokens on the Ethereum blockchain.

Recommended Bridge:

• Within the PoS Bridge and Plasma Bridge options, Polygon Network suggests utilizing the Proof of Stake Bridge for enhanced efficiency and reliability.

Transfer Times:

• The approximate duration for transferring assets from Ethereum to Polygon is 22-30 minutes. Conversely, withdrawing from Polygon using the PoS bridge may take between 30 minutes and six hours. These timeframes may vary based on network conditions.

It’s advisable to consult Polygon’s official documentation or announcements for the latest and most accurate information, as protocols and features in the cryptocurrency space can evolve over time.

Introduction to Polygon Solutions and Services

Polygon Crypto employs a range of solutions and services to enhance scalability, catering to various stages of development, testing, and ongoing innovation. As of now, Polygon has introduced nine solutions, each serving specific purposes. Here’s an overview of these solutions:

Polygon PoS:

An Ethereum Virtual Machine (EVM)-compatible Ethereum sidechain. It is secured by a set of Proof of Stake (PoS) validators in a permissionless manner, contributing to increased scalability and faster transaction processing.

Polygon zkEVM:

The first zero-knowledge scalable open-source solution fully compatible with the EVM. It derives its security from Ethereum, offering enhanced privacy and scalability through zero-knowledge proofs.

Polygon Supernets:

Polygon’s point-to-point service designed to empower users to build their own blockchain. This solution aims to simplify the complexity of blockchain development, enabling users to create tailored blockchain networks.

Polygon Avail:

A modular and public blockchain providing access to transaction data for independent chains and off-chain scaling solutions. It emphasizes modularity to facilitate customization and scalability.

Polygon Zero:

A highly scalable, fully Ethereum-compatible zero-knowledge rollup solution. It leverages a fast recursive proof-of-concept system to achieve scalability while maintaining compatibility with the Ethereum network.

Polygon Miden:

A Turing-complete virtual machine based on zk-STARK, offering a high level of security and supporting advanced features not currently available in Ethereum. Miden aims to expand the capabilities of smart contracts.

Polygon Nightfall:

A scalability solution utilizing optimistic rollups to reduce costs and zero-knowledge cryptography to implement privacy. Nightfall enhances transaction efficiency and introduces privacy features to blockchain interactions.

Polygon Edge:

A modular and extensible framework for building Ethereum-compatible private or public blockchain networks. It provides flexibility for developers to construct customized blockchain solutions based on their specific requirements.

Hermez:

An open-source zero-knowledge rollup solution used to increase security and enable low-cost token transfers on Ethereum. Hermez achieves scalability through group processing of transactions within a single transaction, reducing congestion and costs.

In addition to these solutions, Polygon has introduced a privacy solution through Polygon ID. This is a blockchain identity system featuring programmable privacy, enabling reliable interactions with Web 3 services while ensuring user privacy. These solutions collectively showcase Polygon’s commitment to addressing scalability challenges and advancing the capabilities of blockchain technology.

MATIC Wallet

Hardware Wallets:

1. Ledger:
   • A popular hardware wallet that provides a high level of security by keeping private keys offline. Ledger supports a wide range of cryptocurrencies, including MATIC.
2. Trezor:
   • Another reputable hardware wallet known for its security features. Trezor also supports MATIC, making it a safe option for storing larger amounts of tokens.

Software Wallets:

1. Trust Wallet:
   • A mobile wallet that supports a wide range of cryptocurrencies, including MATIC. It is user-friendly and suitable for everyday use.
2. Atomic Wallet:
   • A multi-currency wallet available for desktop and mobile platforms. Atomic Wallet allows users to manage, exchange, and stake various cryptocurrencies, including MATIC.
3. MyEtherWallet (MEW):
   • A web-based wallet that allows users to create and manage Ethereum wallets. MEW is compatible with MATIC since it’s an ERC-20 token.
4. MetaMask:
   • A popular browser extension wallet that allows users to interact with decentralized applications (DApps) on the Ethereum network. It also supports ERC-20 tokens like MATIC.

These wallets offer varying degrees of security, accessibility, and user-friendliness. Hardware wallets are generally considered more secure, especially for long-term storage of significant amounts of cryptocurrency. On the other hand, software wallets are convenient for everyday use and easy access to your tokens. It’s important to choose a wallet based on your specific needs and preferences.

Polygon Crypto: A Unique Cryptocurrency

Scalability and Operational Capacity:

Polygon Crypto stands out for its emphasis on scalability and operational efficiency. As a layer two scalability solution, it addresses challenges associated with blockchain scalability, focusing on facilitating quick and efficient transactions.

Security and Technology:

The network employs a custom version of the Plasma framework, utilizing the Ethereum main chain’s Proof of Stake algorithm checkpoints. This unique technological approach enhances the security standards within the Polygon ecosystem.

Transaction Throughput:

Utilizing its custom Plasma framework, Polygon Crypto achieves an impressive transaction throughput, allowing for 65,536 transactions per block for each sidechain. This is a significant advancement, particularly benefiting decentralized finance (DeFi) protocols within the Ethereum system.

MATIC Token and Governance:

The MATIC token plays a pivotal role in the security and management of the Polygon system. Beyond being a utility token for transaction fees and staking, it holds future implications in the governance structure of the network.

Future Blockchain Support:

While currently supporting the Ethereum basic blockchain, Polygon Crypto has ambitious plans to expand its compatibility with other base blockchains. This strategic decision positions Polygon to evolve into an interactive platform for layer two decentralized blockchains, providing flexibility for developers and users.

In summary, Polygon’s unique focus on scalability, security, and adaptability distinguishes it as a promising solution within the broader blockchain ecosystem. Staying informed with Polygon’s official announcements and developments will offer the latest insights into its progress and future plans.