What is Polygon?
Polygon, formerly known as the Matic Network, is a scaling solution that aims to provide multiple tools to improve the speed and reduce the cost and complexities of transactions on blockchain networks. It is a protocol and a framework for building and connecting Ethereum-compatible blockchain networks. Aggregating scalable solutions on Ethereum supporting a multi-chain Ethereum ecosystem.
In short, Polygon is a layer 2 solution that augments Ethereum and drives its scalability. And it works on top of Ethereum's primary blockchain.
What is Layer 2 Solution?
A blockchain that confirms transactions faster than a major blockchain network. Layer 2 chains are often designed to handle small transactions (micropayments) with lower fees or no fees, as well as to reduce traffic on the main network.
Story of Polygon:
Polygon was created in India in 2017 and was originally called the Matic Network. It was the brainchild of experienced Ethereum developers—Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, as well as Mihailo Bjelic. The original idea came from Jaynti Kanani, the now CEO of Polygon. Reaching out to Sandeep Nailwal, a blockchain developer and Anurag Arjun, the three of them would be widely successful in their joint venture. The three partners then went on to start MATIC, where they based their operations in Mumbai. The Matic Network rebranded to Polygon in February 2021.
Purpose of Polygon:
The center of Polygon’s vision is Ethereum. Polygon wants to help Ethereum expand in size, security, efficiency, and usefulness and seeks to spur developers to bring enticing products to market all the quicker.
Working Mechanism of Polygon :
Polygon uses Proof-of-Stake(PoS) consensus mechanism. Polygon relies on a set of validators, who are their operators, to secure the network. The role of validators is to run a full node, produce blocks, validate and participate in consensus and commit checkpoints on the Ethereum Mainnet. To become a validator, one needs to stake MATIC tokens with staking management contracts residing on the Ethereum mainnet.
Rewards are distributed to all stakers proportional to their stake at every checkpoint with an exception being the proposer getting an additional bonus. User reward balance gets updated in the contract which is referred to while claiming rewards. Stakes are at risk of getting slashed in case the validator node commits a malicious act like double signing, validator downtime which also affects the linked delegators at that checkpoint.
As long as ⅔ of the weighted stake of the validators is honest, the chain will progress accurately. Validators stake their MATIC tokens as collateral to work for the security of the network and in exchange for their service, earn rewards.
Polygon can be compared to other competing networks such as Polkadot, Cosmos, and Avalanche.
Architecture:
Polygon architecture consists of four abstract, composable layers.
Ethereum Layer
This layer is implemented as a set of Ethereum smart contracts, in charge of functions like:
Finality/checkpointing, Staking, Dispute resolving, Message relaying
Security Layer
This layer can be implemented as a meta-blockchain that runs in parallel to Ethereum, in charge of functions like:
Validator management(registration/deregistration, rewards, shuffling etc) ,Polygon chains validation
Polygon Networks Layer
Each of the networks serves its respective community, maintaining functions like:
Transaction collation, Local consensus, Block production
Execution Layer
This layer interprets and executes transactions that are agreed upon and included in Polygon networks’ blockchains. It consists of two sublayers: Execution environment(pluggable virtual machine implementation), Execution logic(state transition function of a specific Polygon network, normally written as Ethereum smart contracts)
Transaction Statistics
Transaction per day : 7,432,973
Active validators : 100
Active delegators : 12,565
Matic price : $1.9700
Website : Polygon
Current involvement:
Growing investor interest around MATIC
The growing adoption of Polygon also seems to boost investors' overall sentiment in the crypto market. According to LunarCrush, Polygon's dominance on all the social media platforms has risen by 636% in the last three months. This means that the investors have been taking a more extensive interest in the currency than ever before. Read more..
Big collaborations
Recently, Polygon announced that it would be partnering with the consulting wing of Infosys Ltd. This collaboration is called M-Setu . It aims to enable Infosys to provide disruptive technologies to its clients. M-Setu will act as an open-source bridge that allows enterprises to cross-operate using the ethereum blockchain. Read more..
Mark Cuban backs Polygon
Cuban's investment in Polygon has been a catalyst towards its impeccable growth. As a cryptocurrency backed by the billionaire investor who backed Bitcoin, Ethereum, and other big cryptos, Polygon can expect a higher adoption in future. Read more..
Pros:
- Low transaction fees
- Extremely fast transactions per second
- Can scale and offers staking rewards
- Great for decentralized finance apps
Cons:
- Market Cap/ Total Value Locked Ratio is high (asset may be overvalued when this occurs)
- Competition from other scaling solutions will arise
Future Scope
In the future, Polygon wants to offer a framework for blockchain networks that would allow users to create interconnecting blockchain networks. If this comes to pass, developers will have a lot of liberty for network creation. They will be able to develop standalone, flexible and scalable blockchains.
