Polygon is a popular Layer 2 protocol, solving problems inherent in the Ethereum mainnet — slow and costly. It intends to bring the adaptability and scalability of all chains along with Ethereum’s security, liquidity, and interoperability — allowing for speedy transactions and low fees. MATIC is the network’s native coin, which is used for fees, staking, and more. You can buy or sell MATIC via exchanges like Coinbase.
Here’s a breakdown of how Polygon works:
Parallel Chain Structure: Polygon is a separate blockchain that operates in parallel with the Ethereum mainnet. It uses various technologies to achieve this parallel structure, such as sidechains, Plasma, and rollups. These mechanisms enable transactions to occur on Polygon without congesting the Ethereum mainnet.
Proof-of-Stake (PoS) Consensus: Polygon employs a PoS consensus mechanism. Validators participate in securing the network and validating transactions. Validators are responsible for confirming transactions and adding them to the blockchain. In return, they receive rewards in the form of transaction fees and newly minted MATIC tokens. Validators need to stake a certain amount of MATIC tokens as collateral.
Validators and Delegators: Validators are individuals or entities that run full nodes and actively participate in the consensus process. They stake their own MATIC tokens as collateral and can be penalized for misbehavior. Delegators, on the other hand, stake their MATIC tokens through a validator they trust. While delegators have a lower commitment level, they still face risks if the chosen validator acts maliciously.
Bridging: To use the Polygon network, users need to bridge their assets from the Ethereum mainnet to the Polygon network. This involves locking assets on the Ethereum mainnet and minting corresponding assets on the Polygon network. Popular choices for bridging are stablecoins like USDC. Additionally, a small amount of MATIC is needed for transaction fees.
User Experience: The Polygon network offers near-instant transaction confirmations and significantly lower transaction fees compared to the Ethereum mainnet. This makes it an attractive platform for users to experiment with decentralized finance (DeFi) applications without worrying about high costs.
Applications on Polygon
Polygon supports a wide range of decentralized applications (DApps) and protocols, including decentralized exchanges (DEXs), yield farming platforms, lending and borrowing protocols, NFT marketplaces, and more. These applications leverage Polygon’s high throughput and low fees to provide users with a more seamless experience compared to the Ethereum mainnet.
The Polygon 2.0 proposal
Announced in June 2023, Polygon 2.0 is a set of various upgrades to the Polygon PoS blockchain that will gradually change the protocol from its architecture to governance and the evolution of its token from MATIC to POL. The Polygon PoS chain now has its own roadmap to become the internet’s Value Layer, a network of ZK-powered L2 chains. This transition made Polygon more scalable, secure, and efficient and made it a more attractive platform for dApps.
Check out the link to create your own Blockchain using Polygon Supernet.