What is Polygon (MATIC)? How does it work?
Matic Network, which is now known as Polygon, is a platform with a variety of resources to expedite transactions on blockchain networks and to cut down on expenses and complexities.
In this article, we will cover everything you need to know.
What is Polygon?
Polygon is a “layer two” or “sidechain” solution that works in cooperation with the Ethereum blockchain, providing quick transactions and small fees.
MATIC is the network’s token, employed for fees, staking and other tasks. MATIC may be purchased or sold on such crypto exchanges as Coinbase or Binance.
The Ethereum blockchain serves as the infrastructure for a broad array of economic activity, including NFTs, games, and the DeFi universe. Ethereum is well-suited for this purpose due to its capability of supporting smart contracts, which are the building blocks for many applications.
The increasing demand for these apps is leading to a surge in transactions on Ethereum blockchain, thereby causing transaction fees (known as “gas”) to become too high for making small or regular investments to be viable financially.
Polygon has arisen as a “Layer 2” scaling solution, otherwise known as a “sidechain,” that offers quicker transactions and more affordable costs for users. It functions as a nimble parallel blockchain running in addition to the main Ethereum blockchain. Polygon desires to increase the growth of Ethereum with regards to size, security, efficiency, and functionality, and is encouraging developers to create new products and services at a faster rate.
You can “bridge” a portion of your cryptocurrency to Polygon, and then you can use a vast range of popular crypto applications that were formerly limited to the main Ethereum blockchain.
Exploring MATIC: What is it?
The Polygon network has its own digital currency, called MATIC, which is used to cover fees, stake, and for the governance process where MATIC holders will be able to voice their opinion regarding any changes on the Polygon network. In short, MATIC is used to pay and settle transactions among those who take part in the Polygon network.
The title MATIC dates from an earlier section of Polygon’s growth. After being unveiled as Matic Network in October 2017, developers gave it a new name of Polygon at the start of 2021.
Who created the Polygon network?
In 2017, Matic Network was created in India and later renamed Polygon. It was a concept developed by experienced Ethereum creators Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic.
In 2020, the Matic Network went live and drew the attention of some of the most esteemed players in the DeFi (Decentralized Finance) space, such as Decentraland and MakerDAO. In February 2021, the Matic Network was rebranded to Polygon.
How does Polygon work?
Similar to an express train on a subway, Polygon goes along the same path as the regular train but has fewer stops and goes much faster. (The main Ethereum blockchain is like the local train in this analogy.)
To create this efficient parallel blockchain and link it with the main Ethereum blockchain, Polygon uses various technologies.
Polygon utilizes a proof-of-stake consensus mechanism to ensure the safety of its MATIC network. As a result, holders of MATIC can gain monetary rewards by participating in the staking process.
Validators
Validators are the ones who do the difficult work — they authenticate new transactions and add them to the blockchain. A benefit for them is that they are able to obtain a percentage of the fees and MATIC that are generated.
To become a validator is a serious commitment that involves operating a full-time node (or computer) and staking one’s own MATIC. If an error is made, malicious activity is done, or there is an unstable internet connection, then part of the staked MATIC can be lost.
Delegators
Delegators entrust their MATIC to a trustworthy validator in an indirect way. This is a much less demanding way of staking. However, it still needs research — if the validator you select behaves maliciously or makes mistakes, you may lose some or all of your staked MATIC.
How could one use the Polygon network?
Using the Polygon network, many of the same activities enabled by the main Ethereum network can be accessed with fees that are often miniscule. The objective of Polygon is to increase the capacities of Ethereum by utilizing a variety of sidechains to decrease the congestion on the main platform in an economical and effective way.
Sidechains are distinct blockchains that are connected to the primary Ethereum blockchain, and are beneficial in aiding the various DeFi protocols accessible on Ethereum.
At the heart of the network stands the Polygon SDK, employed for constructing decentralized applications which are Ethereum-compatible and connecting them to its primary blockchain.
The scalability of sidechains can be bolstered through a variety of construction methods, such as:
- Plasma Chains – Packages a group of transactions into blocks, and then submits them as one unit on the Ethereum blockchain
- zk-Rollups – Facilitates the collection of multiple transfers into a single transaction
- Optimistic Rollups – Akin to Plasma Chains, but also able to scale Ethereum smart contracts.
Decentralized exchanges such as QuikSwap and SushiSwap, yield-generating lending and savings protocols like Aave, NFT markets including OpenSea, and “no-loss prize games” like Pooltogether are all available to explore.
In order to use the Polygon network, one must first send cryptocurrency to a compatible wallet. Then, transferring some crypto to the Polygon network is necessary, and it is recommended to use stablecoins for this purpose.
Additionally, a small amount of MATIC is needed to be transferred in order to make transactions, but even a minimal amount of one dollar is enough since the fees are so low.
The Polygon network is a great option for those wanting to explore the world of DeFi protocols due to its minimal costs and fast transactions. It should be noted, however, that DeFi is a very volatile market, so newbies should take caution and not invest any more than they can afford to lose.
What’s Zookram?
Zookram is the ultimate guide to learning web3 + crypto. We cover everything you need to know, from how to buy each cryptocurrency to how to mint NFTs.