What is Polygon?
Polygon, formerly known as the Matic Network, serves as both an Ethereum Layer 2 solution and a cryptocurrency.
Polygon is an intuitive Plasma-based sidechain solution running alongside the Ethereum network. It provides all of the necessary tools needed to build decentralized applications (dApps). At the moment, Polygon’s sidechain houses over 50 unique dApps.
On top of that, Polygon enables the creation of other solutions such as zero-knowledge rollups, optimistic rollups as well as API and SDK.
Polygon is the native currency powering the platform. It’s based on the ERC-20 token standard. There is a total supply of 10,000,000,000 Polygon coins. When referring to the native token of Polygon, the term Polygon is used, although its official name is MATIC. This means Polygon and MATIC are used interchangeably.
MATIC is the utility token of Polygon. It’s used to pay transaction fees and serves as a settlement currency. Moreover, the Polygon token grants governance rights. It can even be staked.
Just like the majority of digital assets, Polygon price experiences volatility. If you want to delve deeper into the MATIC price, check out the graph above.
What are the Main Features of Polygon?
The key goal of Polygon is to tackle Ethereum’s scalability problem and facilitate mass adoption of crypto.
It also hopes to address block-related concerns such as block confirmation time and block size. In the future, the project aims to resolve scalability issues on multiple blockchains. Some of the main selling points of the Polygon network are extremely fast transactions, enhanced security, and low transaction fees.
Polygon is a decentralized platform that elevates this aspect through an additional layer of block producers.
When explaining what is Polygon, it was briefly mentioned that the solution uses the Plasma framework. This customized framework was implemented in order to enhance the security of digital assets. Most importantly, it enables Polygon’s sidechain to process over 65,000 transactions per block. In addition, the Proof-of-Stake (PoS) consensus mechanism facilitates transaction processing. Various DeFi protocols are supported by these Plasma-based sidechains across Ethereum.
The Plasma framework was initially brought forward by one of Ethereum’s founders - Vitalik Buterin. It greatly benefits Polygon in many ways. For instance, with this framework and the PoS consensus mechanism in place, Polygon can effortlessly accommodate countless dApps.
Polygon enables staking. In order to join the PoS consensus mechanism and become a validator, you must put forward your Polygon tokens as collateral or delegate your tokens to another validator. The staking rewards come in the form of MATIC tokens.
Polygon is supported by Coinbase and Binance.
There are various decentralized platforms providing sidechains or Layer 2 solutions such as Liquid Network, Loom Network, Raiden Network, or Lightning Network. Therefore, Polygon has its work cut out for it when it comes to the market share.
Who Developed Polygon?
The Matic Network was founded by a team of 3 Indian nationals - Sandeep Nailwal, Jaynti Kanani, and Anurag Arjun in October of 2017.
Sandeep Nailwal began as a software engineer and has been working with blockchain technologies since 2015. He holds an MBA in Technology, Finance, and Supply Chain Management from the NITIE. Sandeep co-founded a crypto-related project called ScopeWeaver.com. He’s currently working as a blockchain programmer.
Before the launch of the Matic Network, Jaynti Kanani worked as a data scientist at Housing.com. He went to the Dharmsinh Desai Institute of Technology where he gained a Bachelor’s degree in Information Technology. When the Matic Network was launched, he took the role of CEO up until late 2021.
Co-founder Anurag Arjun takes care of the business side of things when it comes to Polygon. He successfully completed his Bachelor’s studies at the Nirma Institute of Technology and gained a Bachelor’s degree in Computer Engineering. Anurag is the sole member of the core team without a programming background. Besides Polygon, he has also co-founded a consulting company called Dexter Consultancy where he worked as a product manager for 4 years.
In its early days, the Matic Network played a significant role in the development of the Ethereum blockchain. Some of their most notable contributions include Dagger - the Ethereum event notification engine, the WalletConnect protocol, and Plasma MVP.
One of the main goals of the Matic Network team was to address the elephant in the room - Ethereum’s scalability problem.
It was rebranded to Polygon in April of 2021.
Ethereum’s EIP-1559 Upgrade and the London Hard Fork
Ethereum Improvement Proposal (EIP) 1559 revolves around the calculation mechanism of transaction fees. It’s part of the London Hard Fork.
London Hard Fork went live on the Ethereum network in August of 2021. Next year, it was officially activated on Polygon in January of 2022.
The transaction fee calculations will no longer be processed on the first-price auction. A base fee model has been implemented in its place. This means that Polygon tokens will be burnt as base fees.
EIP-1559 upgrade enforces stability. Most importantly, it allows network participants to roughly calculate the transaction fee. This way they don’t lose significant amounts of tokens by overpaying.
As a consequence of this upgrade, MATIC tokens will become more deflationary. This is due to the fact that these tokens will no longer be distributed among miners, but instead will be burned. Around 27,000,000 MATIC tokens will be burned every single year. In turn, this could also mean an increase in the Polygon price.
Unfortunately, EIP-1559 doesn’t bring anything to the table when it comes to decreasing the transaction fees across the Ethereum network.
Don't forget to check the MATIC price via the graph above before making purchase decisions.