How does Polygon MATIC work?

Imagine Ethereum as a growing metropolis, teeming with innovation and growth. Yet, as the city expands, its infrastructure strains under the increasing demand, slowing down the pace of progress. Enter Polygon, not the caped crusader you might expect, but a dynamic partner ready to tackle the challenges alongside Ethereum.

Polygon steps into the scene, not with a flashy cape, but as a practical collaborator poised to address the scaling challenges of Ethereum. It’s time to dig into what makes Polygon a game-changer, from its cutting-edge technology and vibrant ecosystem to its strategic partnerships that are too good to miss. Let’s dive right in.

What is Polygon MATIC?

Let’s kick things off by unpacking what Polygon is all about.

Envisioned as a solution to alleviate congestion, Polygon works in tandem with the Ethereum blockchain. Its standout feature, the Polygon POS (Proof of Stake) sidechain, is designed to enhance the throughput of transactions within the Ethereum network.

Imagine Ethereum as a busy expressway, overwhelmed by the sheer volume of traffic. Polygon emerges as a swift underpass, providing a bypass for some of the traffic to flow smoothly, thus easing the load on the main Ethereum thoroughfare.

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In essence, Polygon processes transactions on an auxiliary blockchain that’s compatible with Ethereum, subsequently integrating the processed transactions back onto the Ethereum mainnet. This ingenious method significantly reduces the burden on Ethereum’s network.

By implementing this strategy, Polygon not only accelerates transaction speeds but also cuts down on transaction fees. To put Ethereum’s scaling problems into perspective, consider the sky-high gas fees that once soared to $190, with an average hovering around $40.

Ethereum was definitely having scaling issues. So there was definitely a need for a platform to provide low fees. - Sandeep Nailwal, Co-founder of Polygon

Now, this is usually driven by the relatively limited number of transactions that can be facilitated using a single block. Miners, in such a scenario, choose the highest-priced transactions as their priority. So, the result is an increase in effective gas prices.

In direct response to Ethereum’s problems, Polygon provides an easy framework for new and existing blockchain projects to build on Ethereum without scalability issues. It is important to note that Polygon has grown into a more complex platform that allows developers to build and launch fully interpolable blockchains.

In fact, presently, one of the goals of Polygon is to make Ethereum an internet of blockchains similar to ecosystems like Cosmos and Polkadot.

How does Polygon Work?

Alright, so let’s get a little bit more technical and find out how Polygon generally works. So, let’s go back to our highway analogy where we mentioned that Polygon decongests Ethereum by providing an underground passage for cars. But this is not the only solution, right? We could also build overhead roads, for example.

Similarly, Polygon uses a variety of L2 solutions to create a speedy, parallel blockchain and link it to the main blockchain. Some of these solutions include the Plasma Chain, which provides a framework for building dApps off-chain, benefiting from Ethereum’s secure infrastructure and zero-knowledge roll-ups based on zero-knowledge proof, meaning that it executes the transactions off-chain, only submitting the proof of validity to the main Ethereum chain.

Now, it is named roll-ups as it basically rolls up transactions into batches that are executed off-chain.

There are other scaling solutions and more are continuing to be developed as Polygon is trying to prepare Ethereum for mass adoption by boosting its transaction throughput, all without sacrificing the network’s security and user experience.

Let’s zoom in a little bit further and focus on Polygon’s main sidechain, their proof-of-stake chain that runs parallel to Ethereum.

Now, the chain has its own set of validators. who do the heavy lifting by staking their MATIC tokens and verifying transactions to secure the network in exchange for receiving a cut of fees, which is also in the form of MATIC. Delegators can also stake their MATIC indirectly via a trusted validator to get a share of the rewards.

This chain is also Ethereum Virtual Machine compatible, allowing Ethereum-based dApps to migrate their smart contracts to the Polygon network. This also allows the transactions to happen on Polygon’s sidechain, where users will be paying fees in MATIC, which will be a fraction of what they would have paid on the mainchain. Polygon would then need to update Ethereum on what happened off-chain by posting the transaction data back to the mainchain.

Let’s look at some of the biggest DeFi projects already on the network. So, Polygon has seen widespread adoption from users and developers alike.

Some of these protocols include Aave, one of the most popular crypto lending platforms, and decentralized exchanges like Quickswap, which use the scaling solution to offer users faster and cheaper trading.

While the most popular projects on Polygon are the traditional dApps, Polygon provides scaling solutions to other spaces like blockchain gaming by helping developers and gamers build and play games more effectively. Top gaming and NFT dApps like AAVEGOTCHi and Sandbox have scaled their user experiences with Polygon.

Its timing in the gaming industry is perfect as the fast-growing NFT industry has been integrated into blockchain gaming. Basically, gamers can buy, sell, and trade different types of in-game assets as NFTs.

Now, Polygon has not only been excelling from a technology point of view, but also from a business point of view.

One of the biggest Polygon partnerships is with Disney. The media and entertainment company chose the scaling solution as one of six companies to be a part of its program to develop AR, NFT, and AI experiences. Polygon has also partnered with social media giants Reddit and Meta.

The latter was announced in May 2022 when Meta was testing a new feature on Instagram that allows creators to share NFTs on their feed by directly connecting their account to a Web3 wallet. Shortly after, Reddit announced a partnership with Polygon for their new NFT avatar marketplace that allows users to purchase NFT PFPs. Now, this feature does not need a crypto wallet.

Instead, users can purchase the NFTs via credit or debit cards. The NFTs are minted on Polygon and can be stored on Reddit’s own crypto wallet, Vault.

So then what does the future look like for Polygon? Well, this is a question that has been asked a lot in light of Ethereum’s upgrade.

So, one of the co-founders of Polygon, Sandeep Nailwall, addresses these comments in an interview with Cointelegraph, stating that he believes Ethereum’s switch to a proof-of-stake network will not change much in the way of transactions per second.

Ethereum has 13 transactions per second [TPS] right now, maybe it will go to 20 TPS [after PoS], but not more than that. So that does not add anything to scalability. And let’s say in three to five years, even if the sharding comes, we’ll have a projection of 64 shards. And with each acting at 20 transactions per second, but that’s still 1,280 transactions per second overall, right? That’s still not enough for the entire world. - Sandeep Nailwal, Co-founder of Polygon

Sandeep notes that the Ethereum upgrade might succeed in increasing throughput, which will still be low, and that wouldn’t change that much, even when sharding finally happens in 3–5 years.

As more Ethereum-native DeFi protocols are starting to migrate to Polygon, plus the network’s committed goal of developing additional scaling infrastructure, the extent to which Polygon can help scale the Ethereum network remains to be seen.

Now, all-in-all, as a project, it is definitely one of the most interesting ones to watch in the future. So, what do you think? Is Polygon one of the projects on your watchlist? Is it a good investment?

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