What is Polygon (MATIC)?

Luis Clark
Luis Clark
Luis is a personal finance expert who has been passionate and writing about crypto for more than five years.
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      What is Polygon (MATIC)?

      Dubbed “Ethereum’s Internet of Blockchains”, Polygon is a cryptocurrency and sidechain or layer 2 scaling solution that achieves scale by using sidechains for off-chain computation. Polygon addresses the problems faced by the Ethereum blockchain like poor user experience, low per-second transaction counts, and high fees.

      It ensures asset security by utilizing a decentralized network of Proof of Stake validators and the Plasma framework. The Polygon platform offers scaling solutions to Ethereum-based projects. Using Polygon can boost the sovereignty, scalability, and flexibility of blockchain projects while maintaining the key features of the Ethereum blockchain, like its structure, security, and interoperability. 

      MATIC, an ERC-20 token, is the platform’s native cryptocurrency, which is used for securing and governing the Polygon network, paying transaction fees, and much more. MATIC can be bought or sold through cryptocurrency exchanges.

      what is matic

      Who is the Founder?

      The Polygon project, formerly called the MATIC Network, was a project initiated in 2017 in Mumbai, India by 4 co-founders who are software engineers – Anurag Arjun, Jaynti Kanani, Mihailo Bjelic, and Sandeep Nailwal. MATIC network changed its name to Polygon in February 2021 to extend and expand to the Metaverse.

      How does Polygon (MATIC) Work?

      Polygon is a multichain network that utilizes a network of side chains to quicken transactions cost-effectively and efficiently. The network is bound to the Ethereum blockchain and is capable of handling several protocols including DeFi protocols. Polygon’s multi-level platform exists primarily to unclog the main Ethereum platform in a cost-efficient and effective manner.  That said, Polygon’s functionality is quite similar to other blockchains like Cosmos, Avalanche, and Polkadot. Using the platform, users can develop Ethereum-compatible decentralized applications via sidechain architecture and link them to the primary blockchain.  Now, the core of the Polygon network is the Polygon Software Development Kit (Software Development Kit), which is utilized in building Ethereum-compatible dApps as sidechains and then linking them to the main blockchain. Sidechains are created using the following methods of Polygon:
      • Plasma Chains: This groups transactions into blocks, bundled into one submission on the Ethereum blockchain. 
      • zk-Rollups: Enables many transfers to be grouped into 1 single transaction.
      • Optimistic Rollups: This is just like the Plasma Chains but offers the function of scanning Ethereum smart contracts. 
      Polygon operates on the Proof of Stake mechanism, which enables users to stake MATIC tokens to validate transactions and vote on network upgrades. Polygon also utilizes the Proof of Stake ‘checkpointing’ system, which means that stakers on the network can select a team of block producers and appoint them to all checkpoints.  These block producers make it possible for the network to create blocks fast while maintaining decentralization by delegating Proof of Stake checkpoints to the primary Ethereum chain. Block validation is achieved when the block producers publish periodical proofs of blocks.  Now, while Polygon uses the Proof of Stake consensus, its PoS mechanism is modified as it enables Proof of Stake to be achieved with every block. On the other hand, the traditional Proof of Stake mechanism achieves consensus by processing several blocks. The Polygon network permits users to access the same functions as Ethereum with additional functions but at low costs.

      Key Features of Polygon (MATIC)

      Polygon Zero

      Polygon Zero also known as Polygon zkEVM (zero-knowledge Ethereum Virtual Machine) is a layer 2 scaling solution for Ethereum. It is the equivalent of the Ethereum Virtual Machine (EVM) and it benefits the whole Ethereum ecosystem.  Polygon Zero harnesses advanced cryptography known as zero-knowledge proofs and it works well with all existing smart contracts, wallets, and developer tools. It reduces user friction and eliminates the need for any kind of re-implementation and modification of code.  This simple scaling solution leverages the power of zero-knowledge proofs to increase throughput and reduce transaction costs while using the security of Ethereum.  The ZK-proof technology batches transactions into groups and relays them to the Ethereum network as a single, bulk transaction. The gas fee for the transaction is shared among all the participants. This reduces the individual cost of each transaction. Polygon Zero also enables the smooth migration of Dapps existing on chains that are compatible with Ethereum Virtual Machine to the zkEVM. Developers can easily migrate dApps by simply switching nodes using programming languages like Solidity. Polygon dApps can also easily migrate to zkEVM. Polygon zkEVM supports the creation of NFTs, enterprise applications, and new gaming technologies.  A major feature that distinguishes Polygon Zero from other ZK scaling solutions is Plonky2. Polygon Zero is powered by Plonky2. And it generates ZK proofs faster than other existing techs.  This ZK scaling solution allows polygon zero to scale horizontally. This means that the throughput of the protocol is limited by the total compute available instead of the weakest nodes on the network.

      Polygon Edge

      polygon edge framework

      Polygon Edge is a modular and extensible framework that enables developers to build sidechains, Ethereum-compatible blockchain networks, and general scaling solutions. This scaling solution enables users to run their blockchain network with customizable features. The blockchains built are compatible with Ethereum smart contracts and transactions. 

      Polygon Edge also supports communication with different blockchain networks. With the help of its centralized bridge solution, both ERC-721 and ERC-20 tokens can be easily transferred across the blockchains. 

      Polygon Edge uses the Istanbul Byzantine Fault Tolerance (IBFT) consensus and is supported as both Proof of Stake and Proof of Authority. Node operators can perform different functions on the nodes using the gRPC protocol. Standard crypto wallets can interact with Polygon Edge through the JSON-RPC endpoints.

      Polygon Supernets

      Polygon Supernets enables Polygon users to easily set up custom blockchain networks. Polygon Supernets is powered by Polygon Edge. 

      It makes the building of blockchain networks easy by providing the required support needed by developers to build their blockchains. Polygon Edge eliminates the complexity of blockchain development and maintains blockchain infrastructure. 

      Polygon Supernets gives users access to premium tools and services while providing high security and decentralization. It is also designed to function in different modes, this gives developers the ability to customize it to their preference. 

      Other benefits of Polygon Supernets include:

      • Premium support for code issues and troubleshooting infrastructure
      • Infrastructure set up that is constantly updated with the latest security updates in the industry
      • Third-party engineering and consulting services
      • Low gas fees

      Polygon Nightfall

      Polygon nightfall

      Polygon Nightfall is a simple scaling solution launched by Polygon to reduce the cost of privately transferring tokens. It is designed to lower the transaction cost of private transfers of ERC-1155, ERC-20, and ERC-721 tokens

      Polygon Nightfall uses Optimistic Roll-up technology to reduce cost while achieving privacy through the leverage of zero-knowledge proofs. 

      A roll-up allows off-chain aggregation of transactions in Ethereum smart contracts. This leads to an increase in the throughput of the blockchain from 15 transactions per second to more than 1000 transactions per second. This results in lesser congestion and reduced transaction fees. 

      While Polygon Nightfall is part of Polygon’s suite of scalability solutions, its feature as a privacy roll-up created for enterprise use cases, differentiates it from other solutions like Polygon Zero and Polygon Miden. 

      Polygon Nightfall does not just use Roll-ups, it also uses Zero-knowledge (ZK) cryptography to offer scalable and private transactions. With Nightfall, the value or destination of transactions cannot be traced back.

      Polygon Improvement Proposal

      Polygon Improvement Proposals (PIPs) are design documents submitted to the Polygon community that describe a new feature for Polygon, its process, or its environment

      This is the primary method for proposing new features and getting Polygon’s community technical input on the proposed addition to the network. PIPs are also a method of documenting the previous decisions that have been implemented in the Polygon ecosystem. 

      PIPs enable Polygon ecosystem implementers to track the progress of their implementation. Each implementation maintainer on the network is expected to list the PIPs that they have implemented. This will enable Polygon users to know the status of each implementation and library. 

      Each PIP submitted to the community must provide a concise technical specification of the feature and also detail the rationale for the feature. The author is also expected to build consensus within the Polygon community and document dissenting opinions. 

      PIPs are grouped into the following categories:

      • Contracts: PIPs in this category focus on the improvement of the core contracts that are deployed on Ethereum. 
      • Core: This focuses on the improvement of core components like Bor and Heimdall. It also covers changes that do not affect consensus but are relevant to core components. 
      • Informational: Informational PIPs focus on Polygon design issues. These types of PIPs do not propose a new feature, all they do is provide general information or guidelines to the community. Community members can follow the advice of informational PIPs or ignore them because they do not represent the Polygon community consensus. 
      • Interface: Interface PIPs focus on client API/RPC specifications and standards improvements. They also focus on some language-level standards like contract ABIs and method names. 

      PIP editors are tasked with the responsibility of ensuring that every PIP submitted is sound and complete. The ideas on the PIP must make technical sense and the title must accurately describe the content. The editor must also check for spelling and grammatical errors. If there is any need for revision, the editor will send the PIP back to the author for revision with specific instructions.

      Weaknesses of Polygon (MATIC)

      A major weakness of Polygon is the competition it is facing from other blockchain technologies. Blockchains like Chainlink and Polkadot are already focused on providing the same features and scalability solutions as Polygon

      Another weakness of Polygon is that it is not an autonomous blockchain. It is a Layer 2 solution that works on the Ethereum platform. This means that if Ethereum experiences a problem, Polygon will also be affected and if Ethereum ceases to exist, Polygon will also fade out. This dependence on Ethereum is a major issue that most investors consider when deciding whether o to make a long-term investment in Polygon MATIC token. 

      There is also the problem of the limited use of the Polygon MATIC token. The token is designed to be majorly used in the Polygon ecosystem. Unlike other cryptocurrencies like Bitcoin, It does not have any real-world use. 

      Finally, Polygon’s Market Cap to Total Value Locked ratio is more than 1, this ratio is considered high. This means that the value of the asset outweighs, the value of the asset locked in the network. The implication of this is that, if the ratio remains higher than 1, the token may become overvalued soon.

      how to stake matic

      How is Polygon (MATIC) Created?

      Polygon (MATIC) is a Proof of Stake coin so new MATIC tokens are issued when delegators stake their held tokens to validators who run nodes and approve transactions in exchange for rewards in new MATIC tokens.

      Mining Polygon (MATIC)

      You cannot mine MATIC token as it is a Proof of Stake coin. This means that instead of having to solve complex computational problems to gain rewards you simply need to stake your tokens with a validator of your choice and share in their risks and rewards. You can also choose to become a validator by renting a community node or using your own. So in exchange for verifying transactions and adding new blockchains, you’ll earn rewards. 

      That said, there’s an option to mine coins like Polygon by mining wETH and then converting it to MATIC.

      Which Blockchain does Polygon (MATIC) Use?

      Polygon uses the Ethereum blockchain and connects to Ethereum-based projects.

      How to Use Polygon (MATIC)?

      MATIC is the native cryptocurrency of the Polygon Network. It has different uses in the Polygon ecosystem, which includes governance. MATIC token holders can participate in the network’s governance by voting on Polygon Improvement Proposals. MATIC holders can also vote on network upgrades. Each user’s vote is proportional to the amount of MATIC they stake. 

      MATIC is used to pay transaction fees within the network and can be staked to earn rewards. Users who execute smart contracts and validate transactions on the network are rewarded with the Token.

      How to Buy Polygon (MATIC)?

      how to buy polygon matic

      MATIC is available for trade on common cryptocurrency exchanges like Coinbase, Huobi Global, and Binance. It is also available for sale on decentralized exchanges like Uniswap

      It is important to choose an exchange with good security and high liquidity for MATIC. 

      To buy MATIC, you will need to create an account with your preferred exchange and fund your account. Once your exchange wallet has been funded, you can buy MATIC on the exchange.

      How to Store Polygon (MATIC)?

      MATIC tokens can be stored in software wallets like Polygon Wallet Suite, Alpha Wallet, Binance wallet, Crypto.com wallet, and Coinbase wallet

      Hardware wallets like Ledger Nano X and Trezor Model T also support the storage of MATIC tokens.

      Best Place to Stake Polygon (MATIC)?

      The best place to stake MATIC is on the platform itself.

      From the official Polygon platform, you can choose whether you want to stake your tokens as a delegator or a validator. If you intend to stake as a validator simply click the purple “stake as a validator” button.

      Once you do, you’ll be directed to the staking page where you will see a list of over 100 validators that you can delegate your tokens. Each validator has a fee that they charge, some take 10% in fees while others require 8% or even 1% or 0%. 

      If you want to set up a node simply click the white “Setup a Node” button. You’ll be directed to this page, which contains the full instructions on how to do so.

      What You Need to Know About the Future of Polygon (MATIC)

      In 2021, Polygon launched a subsidiary of the network that focuses on NFTs and blockchain gaming called Polygon Studios. If this project is successful, it could place Polygon as a leader in the NFT and decentralized crypto gaming space. This is even more compelling considering that Polygon recently appointed a new CEO, Ryan Watts who was formerly the head of gaming at YouTube.

      In addition, digital media giant Instagram has recently launched NFTs on Polygon. This is after Prada and Adidas Originals launched their NFT collections on the network.

      Conclusion: Should You Put Your Money in Polygon (MATIC)?

      Whether you should put your money in Polygon (MATIC) is strictly dependent on what you intend to achieve by holding the token. This is because there are very limited use cases for MATIC.

      The MATIC token was created to secure and govern the Polygon platform (formerly MATIC network) as well as part of transaction fees. This is not like some other cryptocurrencies like Bitcoin which is primarily used for day-to-day purchases.

      So if you want to put money in Polygon because you believe in the objective of the network and want to help secure and govern the community as a result, Polygon would make a great investment. However, if you intend to just invest in the token for outside network use cases, it may not be a worthwhile investment.

      Risks in Investing in Polygon (MATIC)?

      Polygon is a cryptocurrency asset, which means it is a volatile one in so many ways. First, the price value of the token isn’t stable for extended periods, as it can fluctuate between extreme highs and lows in a day. Also, the network can simply stop supporting the project which will result in its price value plummeting. So only invest money you can afford to lose in the worst-case scenario.

      FAQ

      Most frequent questions and answers

      Polygon is a digital asset and technology network developed to help grow and connect Ethereum-based blockchains and projects. Its native token, MATIC, is used to secure and govern the Polygon network as well as pay transaction fees. Investors are also able to purchase MATIC on cryptocurrency exchanges like Kraken and Coinbase. 

      Polygon isn’t a competitor or rival to Ethereum as the platform is dependent on the latter and vice versa. Rather, Polygon’s goal is to offer an infrastructure that will result in the massive adoption of Ethereum by ensuring increased scalability and performance. In summary, Polygon exists to improve Ethereum. 

      Ethereum focuses primarily on providing security and needed features but Polygon’s primary focus is on scalability, low costs, and quicker transaction speeds. Costly gas fees and slow transactions will result in a terrible user experience, which will ultimately affect the platform’s adoption.

      Crypto enthusiasts await the introduction of Ethereum 2.0 as it promises to boost network speeds and lower transaction costs. So there are questions concerning the necessity of platforms like Polygon after its unveiling. The fact is that layer 2 platforms like Polygon will keep being supported because they enhance Ethereum chain utility.

      Plus, as more dApps come into the scene, Ethereum 2.0 may struggle with the restrictions of scalability. This will push gas fees higher and ultimately end the network where it was before. So platforms like Polygon will continue improving the experience of Ethereum 2.0 as any Ethereum update can be enhanced for speed using Layer 2 solutions. Moreover, the recent Polygon partnerships both in the crypto space and beyond show that the Ethereum sidechain isn’t going to become obsolete anytime soon.

      Polygon is currently the leading blockchain to launch an NFT project if you intend to sell your NFTs at an inexpensive price but at a high frequency. Also, unlike with Ethereum, on Polygon you don’t have to pay high gas fees to mint your NFTs. There are zero gas fees directly related to using Polygon on OpenSea. But if you intend to purchase NFTs on Polygon to resell, you’ll need to pay gas fees indirectly as NFTs on the Polygon network can only be bought via Polygon ETH. You’ll also need to pay a one-time initialization fee even if you choose to sell NFT on Ethereum through OpenSea

      Polygon is a multi-level platform that uses a network of side chains to quicken transactions.

      Polygon was previously known as the MATIC network. The Matic Network went live in 2020 but the network’s name was changed from Matic network to Polygon in February 2017

      The Polygon Software Development Kit is used to build Ethereum-compatible dApps as sidechains and links them back to the Ethereum blockchain.

      Skrumble.com provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade or sell cryptocurrency or use any specific exchange. Please do not use this website as investment advice, financial advice or legal advice, and each individual’s needs may vary from that of the author. This post includes affiliate links with our partners who may compensate us. 

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