Polygon (MATIC): Ethereum’s Right Hand Man
Are you curious about why MATIC coin has been able to rising rapidly and become a popular cryptocurrency lately? What is Polygon, and what is its relationship to MATIC? How does Polygon work? Let’s dive in to learn more about it.
What is Polygon (MATIC)? Polygon, formerly known as Matic Network, is a scaling solution platform designed to connect and build blockchain networks that are compatible with Ethereum.
What problem does Polygon solve, and is it a helper or a killer for Ethereum? Polygon is like adding a hard drive to Ethereum, providing a scalability solution to ease congestion on the Ethereum blockchain.
You may wonder why Ethereum is congested and needs to be scaled. With the rapid development of the cryptocurrency industry and various new projects emerging, the number of users in the DeFi sector has hit a record high. Currently, about 70% of DeFi projects run on Ethereum, and there are over one million DeFi and Ethereum wallet users worldwide, which has brought unprecedented pressure to Ethereum.
Currently, Ethereum only has one chain, and all projects need to run on this blockchain equally, which consume a lot of resources and cause congestion. Ethereum’s TPS (transactions per second) is only 15 transactions per second at its highest, which is insufficient to meet the growing demand of users, causing the Ethereum blockchain to become extremely congested.
For example, CryptoKitties, which was popular at the time, caused Ethereum to crash because of its high traffic of users, accounting for 25% of the entire Ethereum transaction volume at one point.
Transactions are getting stuck on the chain, so gas fees started to increase in order to get faster transaction speeds as miners will definitely prioritize transactions with higher gas fees. As a result, everyone started to increase gas fees to improve transaction speed, and leading to Ethereum’s gas fees to become more and more expensive.
In addition, in 2016, The DAO was hacked and the hackers stole about 3.7 million Ether (ETH). Eventually, Ethereum had to use a hard fork to recover the losses, which had a huge impact at the time.
After experiencing those issues, it is not hard to see that Ethereum currently has several major problems:
- Low transaction throughput: Ethereum’s TPS is currently only up to 15 transactions per second, far from meeting user demand.
- Poor user experience: Currently, Ethereum only has one chain, and all projects run on this chain, causing huge congestion and gas fees to increase.
- No autonomy: All projects depend on a unified network.
To solve these problems, many teams have started exploring solutions, hoping to develop blockchains compatible with Ethereum to ease the scalability issue, while still being able to use Ethereum’s ecosystem. This includes Polygon.
Polygon aims to add value around the Ethereum blockchain, with the goal of helping Ethereum grow and strengthen its ecosystem, rather than replace it.
Development History of Polygon (Matic)
In 2017, three cryptocurrency enthusiasts from India, Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, recognized the scalability issues with Ethereum and founded Matic Network to help address the issue.
Matic Network is a Layer2 scaling solution that utilizes sidechains for off-chain computation to achieve scalability, while utilizing the Plasma framework and decentralized Proof-of-Stake (PoS) validators to ensure keep the assets secure.
The network consists of:
- Plasma Chain: A sub-chain based on the Layer2 scaling solution responsible for handling token transactions, providing a secure and instant transaction experience.
- POS Chain: A decentralized PoS validator that ensures asset security.
On April 21, 2019, Matic Network launched on Binance Launchpad and raised $5.6 million after the release of its token, MATIC.
Due to Ethereum’s transaction congestion and high gas fees, users are in need to search for a solution urgently, and Matic was well-positioned to meet this demand. After two and a half years of effort, Matic Network is officially launched and quickly gained attention in mid-2020.
As the market developed, the team recognized the limitations of using the Plasma chain for scaling because it could not solve all of Ethereum’s scalability issues. Existing scalability solutions on the market could only address some of Ethereum’s issues, each with its own pros and cons. To continue helping Ethereum solve various issues, the team realized that all these solutions had to be integrated into a single framework and interconnected to achieve cross-chain interoperability.
As a result, in 2021, the Matic Network was renamed Polygon to build a universal framework that would make all scaling solutions easily compatible with Ethereum, interconnected with each other, and achieve cross-chain interoperability. The goal is to create a multi-chain network around Ethereum that resembles a polygon.
Polygon’s vision has shifted from “Blockchain Internet” to “Ethereum-compatible Chain Internet” with an aim at providing scalability and aggregation solutions around the Ethereum ecosystem. This will not only help to solve the high transaction costs and congestion issues on Ethereum but also retain users on the platform.
What innovations are there after Matic Network was renamed to Polygon?
Matic was only a single scaling solution that could not address all of Ethereum’s scaling issues, while Polygon is a Layer2 aggregator that allows all scaling solutions to easily and seamlessly integrate with Ethereum while also supporting more features.
Polygon is a modular and flexible framework that supports building and connecting two main types of solutions:
- Stand-alone chains
Stand-alone chains rely on their own security, have their own validation nodes, and can have their own consensus models, such as Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS).
Stand-alone chains are independent blockchains that do not use Ethereum’s consensus mechanism, so they can provide the highest level of independence and flexibility, but sacrifice some security, requiring a balance between flexibility and security in their use.
The architecture of these chains can be flexibly adjusted to inherit some of Ethereum’s security. The Matic PoS chain utilizes this architecture, using Ethereum for validator staking and periodic checkpoint finality.
Stand-alone chains are usually very suitable for:
- Enterprises
- Projects that do not require the highest level of security
- Projects with strong communities (able to establish a sufficiently decentralized and secure validator pool)
2. Secured chains
Secured chains rely on Ethereum’s security instead of building their own validator pools.
In addition to the currently supported Plasma chains, Polygon will also support other major Layer 2 solutions such as Optimistic Rollups, zkRollups, Validium, etc., becoming a unique “Layer 2 aggregator.”
Secured chains are well-suited for:
- Applications that require the highest level of security
- Startups, i.e. young projects and communities (unable to establish sufficiently decentralized and secure validator pools)
Using stand-alone chains and secured chains, Polygon can be compatible with almost all Ethereum scaling solutions, just like the internet of Ethereum, with the existing scaling solutions of Polygon being easily accessible to Ethereum.
How does Polygon work?
For developers, the deployment of stand-alone chains and secured chains is straightforward, providing developers with more flexible solutions to adapt to the needs of different users, benefiting from Polygon’s infrastructure.
Polygon’s infrastructure consists of four parts:
- Ethereum layer
- Security layer
- Polygon network layer
- Execution layer
1. Ethereum Layer
Polygon utilizes the Ethereum layer as the foundational layer of its architecture, consisting of a set of smart contracts on the Ethereum network. By leveraging Ethereum as its final checkpoint, Polygon inherits top-level security similar to Ethereum but with less flexibility.
The Ethereum layer serves as an optional component and is responsible for:
- Validation nodes
- Staking nodes
- Dispute resolution
- Information transfer and settlement between Polygon and Ethereum
2. Security Layer
Polygon employs the security layer to provide “Verification as a Service” functionality. This layer allows Polygon validation nodes to act as the on-chain consensus mechanism. Developers can utilize various security solutions to validate transactions, such as utilizing PoS sidechains or fraud proofs, to ensure transaction security.
Currently, PoS sidechains are the preferred security solution. PoS sidechains employ a set of approximately 100 validation nodes to secure the blockchain (with a certain validation fee) and manage the validation nodes. Additionally, this layer can also rely on Ethereum miners (final validators) to achieve consensus.
The security layer is the second optional architectural layer, offering more flexibility than the Ethereum layer and significantly improving transaction throughput while addressing congestion issues. However, its security may be slightly lower.
Not all projects require the highest level of security. For example, gaming projects prioritize user experience, and settlement speed is of utmost importance to them, often willing to sacrifice some security.
3. Polygon Network Layer
Polygon network layer is a network composed of independent blockchains responsible for transaction finalization, block production, and consensus within their respective chains.
These chains can be independent chains or security chains. Block producers of these chains group their respective transactions and, based on the security solution, the network layer publishes a Merkle root as the first-level checkpoint.
4. Execution Layer
Lastly, there is the execution layer. The execution layer interprets and executes transactions determined by the Polygon network layer. This layer consists of two components:
- Execution environment: Implemented by a virtual machine similar to the Ethereum Virtual Machine (EVM), it can track the state of the blockchain.
- Execution logic: Implements specific state transitions for a particular Polygon blockchain. This logic is used to define the transition to the next blockchain state, where Ethereum can be seen as an “infinite state machine” (as opposed to a finite-state machine or FSM, a mathematical computational model that represents a finite number of states, transitions, and actions).
However, among all these layers, security layer is the key value proposition for developers as it enables the true flexibility of the Polygon framework. Developers can choose the security solution that suits their projects and have the option to switch solutions if needed. The aim is to provide developers with a toolkit to customize their blockchain projects.
Conclusion
So, what are your thoughts on Polygon (MATIC)? Are you interested in adding some into your portfolio? Or are you already a holder of MATIC token? Let us know in the comment section!
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