Polygon, previously referred to as MATIC community, is a layer-2 scaling answer created in 2019 to handle a number of limitations within the Ethereum blockchain, comparable to transaction velocity, throughput, and fuel charges.
It was initially designed as a scaling answer, nevertheless it quickly developed right into a multi-purpose ecosystem that’s been receiving a number of consideration. MATIC, its native token, debuted on the Binance Launchpad in 2019 amid the Preliminary Trade Choices (IEO) increase.
However first, let’s see what layer-2 options are if we need to perceive Polygon higher.
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A layer-2 answer is a blockchain that runs parallel to a mainnet — in Polygon’s case, Ethereum — however processes transactions outdoors of the mainnet, leading to an elevated throughput (transaction velocity) and decrease fuel charges.
In different phrases, what layer-2s do is that they construct a communication channel between the 2 blockchains and ship the knowledge package deal (the transaction knowledge) from the mainnet to the parallel blockchain to execute the transaction for a fraction of its value and at a a lot greater velocity, all with out compromising the Ethereum mainnet.
As we all know, Ethereum is the go-to ecosystem for many software program builders trying to launch their dApps (decentralized functions) as a consequence of its huge and safe infrastructure and progressive tooling.
Nevertheless, the excessive demand for dApps and the next provide clogged the community, and its throughput has considerably downgraded—it’s not unusual to see fuel charges rising as much as two or three digits in USD equal, which might be fairly costly relying on how a lot you work together with the community. This leaves the Ethereum blockchain just for the ‘large gamers.’ You need to use Etherscan’s fuel tracker to verify the present fuel charges.
That is why Layer 2 options have turn into important to the DeFi ecosystem. They improve Ethereum’s scalability and throughput whereas nonetheless benefiting from its safety properties.
Polygon works equally to different Proof of Stake (PoS) protocols when it comes to community nodes, governance, staking, and different functionalities.
The platform leverages the Proof of Stake consensus, which depends on a set of node validators to confirm and validate transaction blocks on the community, as an alternative of counting on the basic Proof of Work (PoW), which consumes an unlimited quantity of processing energy to create new blocks.
The primary distinction is available in that as an alternative of getting to do the work (computing work in PoW algorithms), in PoS, token holders validate and confirm transactions.
The PoS ecosystem of Polygon works by rewarding customers with MATIC, the protocol’s native token. To earn MATIC, you possibly can select one of many following choices:
Turn out to be a validator and decide to the community by working a full node to validate transactions on the blockchain. As a node validator, you obtain a lower of charges and a newly created MATIC. Nevertheless, if you happen to act maliciously, make a mistake, or even when your web connection is gradual, your MATIC rewards will probably be slashed as punishment.
Turn out to be a delegator, which is a kind of public node. As a delegator, you obtain different folks’s MATIC and use it to assist the community conduct PoS validation. The bigger the delegated stake, the upper the delegator’s voting energy. That is simpler than being a node validator, nevertheless it additionally comes with its challenges.
If you wish to switch funds from the Ethereum community to Polygon’s, that you must use the PoS bridge, a set of sensible contracts that helps switch belongings from the Ethereum mainnet to the Polygon sidechain.
The PoS bridge is the spine for transferring belongings from Ethereum to Polygon. Customers can then use these funds to work together with the apps and blockchains within the Polygon ecosystem. In fact, a transaction price in ETH might be costly, however when you’re within the Polygon community, transactions are very low-cost—lower than a greenback.
The Polygon Protocol connects all Polygon-based blockchains with one another and the Ethereum community. It additionally permits chains to faucet into Ethereum to inherit its safety mannequin.
In Might 2021, Polygon introduced the Polygon Software program Improvement Package (SDK), a group of plug-and-play software program instruments that enables builders to launch their very own totally customizable blockchains and DeFi apps.
The primary concept is to make Ethereum a fully-fledged multi-chain system, which it already is. Nevertheless, the present limitations and the shortage of construction within the Ethereum ecosystem make it more durable for builders to work on their tasks.
Polygon goals to spice up the ecosystem with the Polygon SDK, which relies on three main ideas: Ethereum compatibility, modularity, and extensibility. This makes it a versatile framework for builders eager to work on Ethereum scaling and infrastructure options.
Polygon SDK is split into two iterations. The primary model helps Ethereum-compatible stand-alone chains, that are sovereign blockchains in control of their modules and safety. These chains can use the Polygon bridge to speak with Ethereum (e.g., transferring belongings or sending arbitrary messages) whereas preserving their independence.
On the second model, we’ll see assist for different sorts of chains, comparable to Layer 2, with their very own set of modules and instruments to additional empower builders.
Polygon permits you to do just about all the pieces you do on Ethereum however with out the excessive fuel charges or the low throughput.
Polygon went from being a easy scaling answer to changing into a extra broad and sophisticated ecosystem the place customers and builders alike have a large set of use instances, together with launching Ethereum-compatible blockchains, utilizing Ethereum-based decentralized functions (DApps), minting non-fungible tokens (NFTs), changing into node validators and delegators, stake MATIC, and way more.
Quite a few profitable tasks work on Polygon, comparable to yield-generating protocols like Aave or Curve Finance, decentralized exchanges like SushiSwap, and the most well-liked decentralized NFT (Non-Fungible Token) market, OpenSea.
You need to use Polygon as the bottom blockchain on these protocols as an alternative of Ethereum. For instance, OpenSea permits you to select Polygon as an alternative of Ethereum as the principle community and use it each time you commerce NFTs — you simply have to have a Polygon-compatible pockets like MetaMask or Coinbase Pockets and join it to OpenSea.
It’s additionally value noting, although, that not all protocols which might be constructed on Ethereum have their Polygon iterations, and to this extent, there are particular limitations.
The MATIC token is an ERC-20 token that powers the whole Polygon ecosystem. It pays fuel charges, facilitates staking, and governs. Based on CoinMarketCap, the present circulating provide of MATIC tokens is 7.48 billion, with a most provide of 10 billion.
After being rebranded to Polygon and implementing new options for builders and customers within the ecosystem, the MATIC token noticed explosive progress in worth as a consequence of an elevated use case. As of July 2024, it’s the twentieth largest cryptocurrency by complete market capitalization.
The MATIC token provide distribution is as follows:
Polygon was created by 4 software program engineers with a robust background in software program growth:
Polygon is without doubt one of the most fun DeFi tasks in existence. Its future for the DeFi neighborhood relating to scalability and blockchain interoperability is promising.
With its huge set of developer instruments, progressive mechanism and modules, and full assist for the Ethereum Digital Machine (EVM), the Polygon ecosystem may quickly see an unlimited influx of tasks thriving.
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