Historical development, Polygon technology, Why is it unique?, Its strengths and weaknesses; all in a compact article
Little bit of History + Background
Polygon is based and developed in India and British Virgin Islands. The project started in 2017 originally as a Matic Network, but in February 2021 it was rebranded as Polygon. Its mainnet was firstly released in steps and it was released on May 12, 2020, with the first step being released on May 17, 2020.
Polygon has its own token called MATIC. This token is branded as an ERC-20 token, which means that it is compatible with Ethereum-based digital currencies and Ethereum blockchain. It is being used to secure and govern the Polygon network and to pay network transaction fees.
Polygon platform itself is operating on the Ethereum blockchain. It also connects projects which are Ethereum based. The specially modified proof-of-stake consensus mechanism is being used by Polygon to efficiently operate the platform. Normally, this mechanism needs to process many blocks to achieve a consensus, but in this case, it can be achieved with every block. Also, this method requires participants to stake their MATIC. If they do so, they are rewarded with the right to validate Polygon network transactions and if they are successful, they are rewarded with additional MATIC.
Price and placing in the market
As of today, Polygon is placed at the rank number 17 in terms of market cap, which is $11,2 billion. You can buy one token for price around $1,63. Its circulating supply is 6,8 billion with total supply being 10 billion, so more than half of the tokens are in the circulation.
Polygon hit all-time high 2 months ago, $2,92 and it happened on December 27, 2021. Since then, we have seen a decline by 44%. The all-time low was hit almost 3 years ago, $0,003, which happened on May 10, 2019.
Polygon is designed to facilitate a future where different blockchains no longer operate as closed-off siloes and proprietary communities, but instead as networks that fit into a broader interconnected landscape.
Its long-term goal is to enable an open, borderless world in which users can seamlessly interact with decentralized products and services without first having to navigate through intermediaries or walled gardens. It aims to create a hub that different blockchains can easily plug into, while simultaneously overcoming some of their individual limitations — such as high fees, poor scalability, and limited security.
Polygon uses a variety of technologies to achieve this expanded vision, these include:
- POS Chain: Polygon’s main chain is an Ethereum sidechain known as the Matic POS Chain, which adds a proof-of-stake (POS) security layer to blockchains launched on Polygon.
- Plasma Chains: Polygon makes use of a scaling technology known as Plasma to move assets between the root chain and child chains via Plasma bridges.
- ZK-rollups: An alternative scaling solution used to bundle a large number of transfers off-chain into a single transaction, using zero-knowledge proofs for the final public record on the Ethereum main chain.
- Optimistic rollups: A solution that runs on top of Ethereum to facilitate near-instant transactions through the use of “fraud proofs”.
As you might have noticed, Polygon intends to incorporate more than one scaling solution in keeping with its goal of minimizing barriers to entry by attempting to reduce transaction fees to a bare minimum. By taking a multi-pronged approach to the issue of scaling, Polygon is hedging its bets, should any other scaling solution fail to accomplish its purpose.
Why is it special?
Unlike too many other cryptocurrencies, which exist for the sole purpose of speculation without a real use case, Polygon has a clearly set and ambitious goal and vision, which fundamentally sets it apart. It aims to reduce complexity of scalability and transaction fees (and speed) across Ethereum based sidechains.
Moreover, in the future, according to many community votes and suggestions, the project may expand to incorporate other, not-ETH-based, chains. That would mean a huge step in interoperability as well.
Next, as already mentioned above, Polygon uses customized version of Plasma framework, which is a unique technology based on PoS checkpoints running through Ethereum mainnet, allowing each sidechain on Polygon to achieve up to 65k transactions in a single block.
Last but not least, Polygon is fundamentally designed to support a huge variety of DeFi project, which is making them more accessible and more easily operable, which in turn promotes crypto adoption as a whole.
The project found its mission and place on a market and is currently among the most popular cryptocurrencies.
Advantages and Disadvantages of Polygon
You may be wondering about the major strengths and weaknesses of Polygon. Especially if you are considering buying MATIC, keep reading to understand Polygon’s advantages and disadvantages.
Polygon’s strengths include:
- Ability to process transactions quickly: By using a consensus mechanism that completes the transaction confirmation process in a single block, Polygon can maintain fast transaction processing speeds. Polygon’s average block processing time is 2.1 seconds.10
- Transaction fees are consistently low: Polygon keeps its fees low to use the platform, with a typical transaction fee of around $0.01.11
Among Polygon’s weaknesses are:
- Not an autonomous blockchain: Polygon is a Layer 2 solution that works atop the Ethereum platform. If the Ethereum platform experiences serious disruptions or ceases to exist, then Polygon would likely lose its value.
- Limited use cases for MATIC: The MATIC token is designed to govern and secure the Polygon platform and pay transaction fees. Unlike some digital currencies, MATIC is not generally used for everyday purchases.