Like other “Ethereum Killers” in the crypto space, Polygon earned notoriety through its promise to solve the problems of Ethereum by establishing a better version of it. Ironically enough, Polygon embarked on its journey by creating a blockchain that sits on top of the Ethereum network, the very chain it wishes to replace.
Ethereum has brought forth various kinds of innovation in the crypto world over the past few years of its emergence, including high-interest decentralized applications (Dapps) and smart contracts. Yet, despite the interesting advancements it brought, some shortcomings still need to be addressed.
Ethereum faces three critical challenges, such as:
Low Throughput
Ethereum can only accommodate about 30 transactions every second, which is a pretty low processing speed against its plenitude users. A handful of blockchain alternatives can process more transactions than it in a given timeframe.
Cardano can execute about 257 transactions per second— 8 times faster than Ethereum, Solana can process 1000, and Solana can complete up to 65,000 transactions— about 2166 times faster than Ethereum.
Not User-Friendly
Ethereum is quite a user-hostile network since users are bidding an auction against everyone else on the platform that aims to be included on the few 30 transactions, making it expensive. It could take users $20 to send a friend just $1.
Limited Options
Developers only choose from limited options in Ethereum. The projects the sit on Ethereum run on the same network having similar throughput. Hence, these networks face the same problems as Ethereum has.
However, there’s a blockchain that can leverage the technology that Ethereum already possesses while providing low fee transactions, high throughput, and better options.
Polygon In Essence
Stellar Indian developers named Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun tried to find a solution to Ethereum’s perplexity and ended up creating MATIC, which has now been rebranded as Polygon. At the time of writing, the coin’s name remains to be called MATIC coins.
This Indian-founded blockchain platform is a Layer 2 scaling platform that backs Ethereum-based applications in tackling Ethereum’s major issuers while leveraging Ethereum’s security at the same time. Its primary focus is to increase usage of DeFi applications and tools by linking blockchains together.
Polygon’s second layer solutions help in speeding up transactions within the blockchain but also assist developers in building on Ethereum. Moreover, it makes working with other blockchains simpler and more efficient. Currently, Polygon hosts about 3,000 decentralized applications, whereas 80 big names transferred from Ethereum’s main chain due to the similarity of Polygon to Ethereum.
Several developers that create useful tools move them from Ethereum to other Ethereum Virtual Machine (EVM) blockchains like Polygon to improve their reach and enhance usage. EVM is the code that is used by computers all over the globe to run blockchain’s smart contract.
Binance Smart Chain, Phantom, and other big crypto networks employ Ethereum’s main code, so it’s no surprise that developers can move their projects on a new network without the hassle and without making any changes.
Polygon Proof of Stake Chain
Basically, Polygon’s proof-of-stake (PoS) chain is a side chain to Ethereum, deploying a proof-of-stake consensus mechanism. This sidechain enabled Polygon to operate faster and handle more transactions per second, making it more affordable for users.
Equipping end-users with flexible and user-friendly tools is the central idea of the contrivance of Polygon. This was to hasten Ethereum’s metamorphosis into a multi-chain platform.
Polygon is a side chain, but it isn’t simply the proof-of-stake chain that we often think of. It’s one heck of a chain that can help in the scaling of Ethereum.
When this idea gets achieved, developers will be able to create various scaling solutions that are available on Ethereum. Perhaps, separate chains, ZK Rollup chains, Optimistic Rollup Chains, or any side chain that they take the fancy of. These chains are pretty unique instruments to bundle up data and conserve space on the main chain of Ethereum.
Polygon’s PoS chain is merely one of the alternatives to scale Ethereum, and they are looking for various methods for users to scale it. Although Polygon might seem a pretty simple project at first glance, it actually is not that simple when you look at its internals. There’s a lot more to it than what meets the eye.
To simplify things, Polygon is essentially Ethereum with a way lower gas fees. Early in the article, it was mentioned that it takes $10 to transfer Ethereum from an account to another, but it costs less than a penny to transact in the Polygon network. Hence, developers can test out new applications without paying a significant amount on a token swap.
How does Polygon work?
A Layer 2 scaling solution drives Polygon and the proof of stake protocol, assisting commit chain to the main Ethereum chain. The commit chain serves as the transaction network that operates close to the actual chain. In Polygon’s case, it works beside Ethereum.
Polygon commits chain bundles clusters of transactions and processes them bodily before transferring data back to the Ethereum chain. For instance, rather than sending a whole video of all transactions, Polygon simply uses a single snapshot from time to time so the Polygon network would be able to understand details without having to process tons of data. This is the reason why Polygon can process 65,000 transactions every second like Solana.
Experts say that developers will eventually host thousands that work arm in arm with Ethereum to increase throughput all the way to millions of transactions every second.
Polygon’s Architecture
Polygon runs on a 4-layer system comprising of the Ethereum layer, Security Layer, Polygon Network Layer, and the Execution Layer.
The Ethereum layer is consist of Ethereum-based smart contracts that are in charge of transaction approval, staking, and interaction between numerous Polygon chain and Ethereum blockchain. This layer is the place where Polygon reviews Ethereum every now and then.
On the other hand, the Security Layer works neck in neck with Ethereum to serve validator services. This offers chains an additional layer of security. However, both Ethereum and security are merely optional and are not necessary to make Polygon work.
Another layer is Polygon’s Network Layer which serves as the ecosystem of projects or blockchain networks advanced by Polygon. Each and every project that exists within this ecosystem has its own community where local blocks get created, and consensus gets achieved.
Execution Layer, also known as Polygon’s Ethereum Virtual Machine (EVM), functions to execute smart contracts on the actual Polygon blockchain. This layer smoothens the user experience for developers and programmers through the Ethereum chain.
Polygon Tokenomics
Polygon’s native coin has been trading for about $2 with a market cap of $13 billion. MATIC tokens are dispersed every month, having a cumulative supply of $10 billion tokes, whereas $6.8 is already in circulation.
Developers marketed 3.8% of MATIC’s total supply in their initial private launch back in 2017. Following this is the initial exchange offering, where they had sold 19% of their maximum supply. The remaining supply is distributed to the ecosystem, developers, advisers, staking rewards, and Polygon foundation.
Soon, Polygon will be implementing EIP1559, so base transaction fees will be burned, and MATIC will become a deflationary token.
At the time that Polygon’s funds run out, stakers would still be rewarded through extra transaction fees that users add to prioritize their transactions. Basically, funds earned from these additional fees will be used to incentivize stakes.
