What is Polygon (MATIC)? Its Architecture, Working & Application
What is Polygon (MATIC)?
Polygon, symbolized by MATIC, functions as both a digital currency and a platform for networking. It acts as a scaling solution called “layer two” or “sidechain” alongside Ethereum, enabling fast transactions and reducing fees. With over 7,000 decentralized applications (dApps), MATIC supports operations without intermediaries. In simpler terms, Polygon, previously known as the Matic network, provides a streamlined framework for blockchain projects, both new and existing, to utilize Ethereum without facing scalability issues.
Polygon, formerly recognized as Matic Network, emerged in 2017 as a prominent cryptocurrency frequently ranked among the top 25 in terms of market capitalization. MATIC, the native digital currency of Polygon, was developed on the Ethereum blockchain as an ERC-20 token.
In 2021, Polygon Studios became a subsidiary of Polygon, specializing in blockchain games and non-fungible tokens (NFTs). The total supply of MATIC tokens is 10 billion, with the majority, equivalent to 8.73 billion tokens, already in circulation. Polygon not only provides a secure and dependable platform for decentralized applications but also offers an efficient way for users to transact with each other.
History of Polygon (MATIC)
In October 2017, Polygon MATIC made its debut as a test network before transitioning to the mainnet. Its founders, Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic, have since witnessed over 7,000 blockchain-based projects being supported by Polygon. Initially known as Matic Network, the platform underwent a name change in February 2021. The Matic network primarily focused on plasma sidechains, which prioritize security over simplicity. Unlike traditional sidechains, plasma chains publish their “root” on Ethereum layer 1 and acknowledge the potential for consensus process failure. This distinctive approach enhances security while limiting the complexity of operations for these chains.
Working Of Polygon
Polygon is a platform that aims to address congestion on the Ethereum network by utilizing multiple sidechains, offering a quick and cost-effective solution. While still adhering to the core principle of PoS, Polygon takes a unique approach compared to other blockchain networks. The implementation of PoS on Polygon differs in the following ways:
Validators on Polygon are chosen based on their reputation, performance history, and the amount of tokens they have staked. Unlike traditional PoS systems, validators are not required to lock up a specific number of tokens as collateral. Polygon provides a more flexible staking system, allowing users to stake any amount of tokens and receive corresponding benefits. In a typical PoS network, token holders influence network governance based on their token holdings.
In terms of governance, Polygon adopts a more democratic structure, ensuring that every stakeholder has a voice in the decision-making process. In contrast, validators in a typical PoS network are rewarded based on their token ownership and level of participation in the consensus process. High-performing validators are incentivized while underperforming validators receive fewer rewards.
Architecture Of Polygon
To establish a connection between Ethereum-compatible sidechains and Polygon’s main blockchain, the software development kit (SDK) can be utilized. There are various approaches to constructing scalable sidechains:
1. POS Chain: Make use of the Matic POS Chain, which offers a proof-of-stake (POS) security layer for blockchains operating on Polygon, acting as the primary chain.
2. Plasma Chains: Utilize Plasma bridges to facilitate asset transfers between the root chain and child chains on Polygon, employing the scaling technology of Plasma.
3. ZK-rollups: Implement the ZK-rollups scaling technique, which utilizes zero-knowledge proofs to create a definitive public record on the Ethereum main chain.
4. Optimistic rollups: Implement a system that takes advantage of “fraud proofs” to enable near-instantaneous transactions, running on top of Ethereum.
Application Of Polygon?
Polygon has created a thriving environment for the gaming industry. Dapps like Aavegotchi, Neon District, Zed Run, and Cometh have utilized Polygon’s capabilities to enhance user experiences. MATIC is the fuel that powers the Polygon network, enabling governance, security, and payment of transaction fees. Swift settlement times provided by Polygon are crucial for decentralized exchanges (DEXs) to offer fast and cost-effective trading options. DEXs such as Quickswap, Dfyn, and ComethSwap have experienced significant user engagement and trading volumes. If you’re interested in decentralized exchanges, consider exploring QuikSwap and SushiSwap. Additionally, there are exciting opportunities in yield-generating loan and savings protocols like Aave, NFT markets like OpenSea, and “no-loss prize games” like Pooltogether. Following in the footsteps of Meta, Disney has recently embraced the platform and plans to experiment with digital collectibles and showcase NFTs on its Instagram platform.
Trading & Buying MATIC
Similar to many other well-liked cryptocurrencies, MATIC can be acquired on cryptocurrency exchanges like Coinbase or Gemini. These exchanges enable users to purchase MATIC using traditional currencies such as dollars. To conduct transactions on decentralized platforms, users have the option to utilize Wrapped Ethereum (wETH), an ERC-20 token that facilitates the exchange of ETH. Alternatively, MATIC tokens can be stored in a Polygon wallet. Additionally, MATIC functions as a governance token, empowering holders to decide on the implementation of various scaling options from a selection of planned choices.
Future of Polygon (MATIC)
Polygon’s bright prospects stem from its solid base, extensive usage, growing appeal, investments, and the positive outlook for its native digital currency, Matic. The blockchain platform is experiencing a rise in the creation of decentralized applications, with an estimated total of 37,000. Cryptocurrency experts have conducted a comprehensive analysis and forecasted that MATIC will reach a minimum price of $2.15 and a maximum price of $2.61 by 2025. The anticipated average trading price for MATIC during that time is projected to be approximately $2.21.
End Note
With the utilization of Polygon MATIC’s capabilities, this platform has made significant progress in tackling the issues of blockchain scalability. Additionally, developers in the blockchain field can utilize the features and tools provided by the Polygon platform to construct their own decentralized networks, allowing for customization possibilities.
The Polygon network also presents an avenue for individuals to experiment with DeFi protocols, offering cost-effective and almost instantaneous transactions, thereby facilitating real-life testing. Considering these factors, now may be an advantageous moment to invest in Polygon, as it is poised for substantial growth in the coming years. As a result, numerous investors are turning to Polygon to take advantage of its potential for appealing returns. With its strong foundation, wide-ranging usefulness, and projected price increases, Polygon is undoubtedly a contender to keep an eye on in the future.
