The Polygon network — formerly known as the Matic Network — is a platform developed in India, and it presents itself as a second-tier solution that intends to solve any and all scaling issues the Ethereum blockchain faces. The Polygon network addresses some specific problems regarding Ethereum’s inefficiencies, and works to increase network scalability and also transaction speeds. Polygon’s native token is the MATIC token, also known as the Polygon token, brought over from the previous Matic Network platform. According to Coinmarketcap, the Matic coin is already among the top 20 crypto tokens globally, as of May 2021.
The Polygon network’s central component is the Polygon SDK, which is a flexible and modular framework that helps developers create a range of decentralized applications with relative ease. In this post, we take a detailed look at the Polygon network’s background, underlying architecture, and working.
Matic Network: What’s It About?
The Matic Network primarily dealt with two of Ethereum’s biggest problems. The first is, of course, the scalability issues. Ethereum is so far not capable of enough scalability to keep up with the advanced requirements of developers within the modern blockchain and crypto space. This inevitably has led to network congestion, the lagging of the Ethereum blockchain, and high transaction costs. Therefore, Ethereum’s scalability problems have made it impossible for the community to make full use of dApps, or decentralized applications.
The Matic Network was introduced in 2017, which was also the beginning of the age of DeFi (decentralized finance). At that time, Matic brought a layer-2 solution that talked about using side chains to increase Ethereum’s scalability. These side chains, while admittedly could not magnify the capacity of the blocks on the primary Ethereum chain, could definitely work to use their own set of blocks to share the load on the main blockchain.
Additional benefits of these side chains: with them, the Matic Network could facilitate quick and cost-effective transitions on Ethereum, and also make connecting with other blockchains easy. Blockchain developers also get to build high-performance decentralized applications on the Matic Network blockchain.
As for the second problem with Ethereum the Matic Network solved, that was its complicated UX design. Matic brought forth a far more simplified user interface that made things easier for users with various decentralized platforms and applications. Further, the Polygon SDK makes the development of decentralized applications easier, and more efficient. The platform’s security was ensured by a Proof-of-Stake consensus mechanism, where users could use the MATIC coin for staking or delegating.
The Shift to Polygon: What’s New?
Very recently in February 2021, the Matic Network rebranded to the Polygon Network, which is essentially an upgraded version of Matic. The Polygon network comes up with a suite of solutions to improve Ethereum’s scalability, that’s where the ‘poly’ part of its name comes from.
Polygon Network describes itself as a second-level security-as-a-service (SaaS) protocol that provides frameworks for developing blockchain networks compatible with Ethereum, free of the issues Ethereum currently faces, such as network congestion, high transaction costs, and low bandwidth. Polygon’s mission is still the same as that of the Matic Network’s- to build a better scaling architecture for the Ethereum platform. Polygon is merely expanding on Matic’s objective and capacities, with a more expansive scope and technological aspirations.
The main distinction between the Polygon Network and Matic is that now the protocol has a multi-faceted approach. The Polygon Network aims to bring mass adoption to Ethereum, and it satiates the requirements of app developers by providing instruments for creating decentralized applications that put the same importance to all aspects — including security, user experience (UX), and performance. Polygon still peruses the technical architecture of its Proof-of-Stake (PoS) Commit Chain and its More Viable Plasma (MoreVP) layer 2 scaling solution.
What the Commit Chain does is basically bunch together batches of transactions and validate them before sending them back to the main blockchain. The Polygon network’s PoS blockchain acts as a Commit Chain to the primary Ethereum blockchain, and allows more than 80 dApps to perform transactions without falling prey to Ethereum’s network congestion.
Polygon’s new scaling solutions or the additions are entirely based on those cornerstones from the Matic Network. The expanding toolbox of the Polygon network includes further layer-2 solutions like zkRollups and Optimistic Rollups, standalone sidechains, enterprise chains, shared security chains, and even interchain communication protocols. With a multi-chain ecosystem, Polygon intends to make Ethereum out to be an ‘Internet of Blockchains’ with scalable infrastructure.
The Team Behind Polygon:
The Polygon network’s core team consists of three Indians — Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, all three co-founders of the platform, along with Mihailo Bjelic. Polygon now also has major Ethereum developers, as well as other famous names from the crypto industry,, joining in advisory roles; there’s Hudson Jameson from the Ethereum Foundation, Anthony Sassano from EthHub, Pete Kim from Coinbase, and Ryan Sean Adams from Bankless.
Polygon Network Architecture:
The Polygon network consists of four composite layers which can help blockchains with a broad range of activities. Below we have discussed these four layers:
- The Ethereum Layer: This layer contains a set of Ethereum smart contracts which help with staking and resolve disputes between different blockchains.
- The Security Layer: This second layer is a conditional layer which supervises the group of validators in charge of the verification of blocks and network security. It can work in parallel with the Ethereum blockchain.
- The Polygon Networks Layer: This layer is a collection of autonomous blockchains which bring interoperability, including the production of blocks and the consensus between networks.
- The Execution Layer: Finally, this is the layer that facilitates the coordination and execution of the many transactions. The Execution Layer further has two sub layers, the names being the execution environment (EVM) and the execution logic (Ethereum smart contracts).
Polygon Tokenomics:
The native token of Polygon is called the MATIC token (also the Polygon token) which is borrowed from the previous Matic Network. The Matic coin is a token that abides by the ERC-20 token standard.
The Polygon token has multiple use cases. The Matic coin is used for payments on Polygon so that users, software developers, and ecosystem contributors can operate on top of the Polygon network. The Matic token is used as both the settlement currency, and for the transaction charges. The Matic coin, with the help of the validator and delegators, also maintains the security of the Polygon network ecosystem and its individual networks on the basis of the principle of SaaS or security as a service. Users can also trade the Polygon token for other crypto tokens when using the platform.
The maximum supply of the Matic token is capped at 10 billion. As of 2021, there are over 5 billion of these tokens in circulation.
Real World Use Cases of Polygon:
- Facilitating Payments: The Polygon network is capable of enabling instantaneous payment settlements with the help of special API or application programming interface and software development kit (SDK) integrations. This way, the Polygon network can allow decentralized applications to quicken their payment procedure. The network will further let dApps, users, and merchants participate in trades with a varied range of cryptocurrencies and the ERC-20 crypto tokens.
This particular system will have three clear phases, the first being Ethereum and other ERC-20 crypto token payments, the second being cross-chain, multi-asset transactions where atomic swaps could be used in association with the LPs or the liquidity providers, and finally, the third being a fiat currency-based payment system where fiat liquidity providers would be required.
2. Decentralized Exchanges: Decentralized exchanges usually lag behind centralized exchanges because of low transaction throughput, as well as high wait times. However, with the Polygon network, decentralized exchanges can facilitate faster and more cost-effective transactions for the users. The Polygon network enables trustless and far easier crypto trades.
3. Keep Personal Data Safe: Armed with PoS side chains and an advanced version of Plasma, Polygon can keep the users’ personal data secure while allowing instant transactions. Plus, using an Open-Identity system, the Polygon network ensures the users get to have control over their own private keys without having to worry about the security of their personal data.
4. Lending and Borrowing: The Polygon network is developing a system that would allow merchants to assess the credit scores of potential borrowers by looking through their transaction histories. This particular usability of the Polygon network is provided in association with the Dharma Protocol. Notably, Aave, one of the leading DeFi lending and borrowing protocols, has over $1 billion in liquidity locked on its Polygon markets, that too with over eight thousand users.
5. Blockchain-Based Gaming: Blockchain-powered gaming platforms tend to perform poorer than the usual PC or console gaming systems, mostly due to slower transaction speeds and high network latency. However, the Polygon network’s layer 2 side chain scaling solutions can definitely make blockchain-based gaming platforms perform better, with far more efficiency. What’s more, with Polygon and Ethereum working together, developers and gamers alike would have a far smoother experience on the gaming platforms.
Some of the top gaming and NFT (non-fungible token) decentralized applications to make use of the Polygon network’s underlying architecture include Aavegotchi, Neon District, Zed Run, and Cometh.
Projects That Have Already Adopted the Polygon Network Architecture:
The Polygon network is already used by many well-known platforms within the crypto space. Some of these projects include:
- Aavegotchi: This is a blockchain-based crypto collectibles game.
- Polymarket: Polymarket is a popular prediction market within the world of cryptocurrencies.
- Curve Finance: Curve Finance is an exchange liquidity pool on the Ethereum platform, not much unlike Uniswap.
- Chainlink: This is a decentralized oracle network that comes up with reliable off-chain information for the use of smart contracts on any blockchain.
- MetaMask: MetaMask is a software cryptocurrency wallet which interacts with the Ethereum ecosystem.
- Decentraland: This is a digital game world with NFTs which is run by the users.
- Aave: Aave, as mentioned before, is an open source, non-custodial liquidity platform that lets users generate interest income on their deposits, and borrow assets.
- 1Inch: 1Inch is a DEX (decentralized exchange) aggregator with the most liquidity and the best rates on both the Ethereum and Binance Smart Chain ecosystems.
Notably, Ethereum is also supported by quite a few high-profile public figures. Mark Cuban, the famous American entrepreneur and investor, has recently made a strategic investment in Polygon.
Future Potential of Polygon:
There have been quite a few solutions created so far for Ethereum’s scalability issues, however, the Polygon network has been the most successful one yet. The rapid growth of the platform as well the rising Polygon price both attest to that fact. If everything goes according to the developers’ plans, in the very near future, Polygon will have thousands of blockchains scaling together to increase throughput, and attached to a main blockchain like Ethereum, it shows the potential to facilitate millions of transactions per second (TPS).
Further, the Polygon network also has plans to expand beyond Ethereum and provide scalability-focused product offerings for other blockchains aside from Ethereum. It’s true that Polygon has a quite ambitious roadmap, but it also has the technology and experience to keep true to its promises. We at Giottus are very excited to see where this made-in-India blockchain platform goes next!
You can find out the Polygon price and perform MATIC/INR trades on the Giottus platform here!
