What Is Polygon MATIC and How Does It Work? | OWNR Wallet
What Is Polygon (MATIC) and How Does It Work?
While Ether is considered to be one of the major blockchains out there, the Polygon network has become a great alternative that addresses some of its major technical issues. A sidechain of the Ethereum blockchain, Polygon is a scaling solution that boosts transaction processing speed, improves safety, and powers Web 3.0 games. Find out how Polygon aims to replace old-generation blockchains like Ethereum (and whether it is possible), what makes it different from other networks, and what are the future plans of the team behind it.
What Is Polygon (MATIC)?
Polygon (ticker MATIC) is both a crypto coin and a platform for connecting and expanding blockchain networks. Also tagged as “Ethereum's internet of blockchains,” it was introduced as Matic Network back in 2017.
The Polygon platform links Ethereum-based projects and runs on the namesake blockchain. While maintaining the security, interoperability, and structural advantages of Ether, the Polygon platform boosts the flexibility, scalability, and sovereignty of the blockchain network.
MATIC, Polygon's native cryptocurrency, is an ERC-20 token, which may be used with other cryptocurrencies supported by Ethereum. The Polygon network is governed, protected, and network transaction fees are paid using MATIC.
Who Created Polygon?
The Polygon blockchain was developed in India in 2017, being initially called “The Matic Network.” The people behind the project are experienced former Ethereum engineers: J. Kanani, S. Nailwal, A. Arjun, and M. Bjelic.
In April 2019, the team raised over 1.9 bln MATIC tokens ($5.6 mln in ETH) within less than three weeks. The network itself was launched in 2020 and has drawn some of the biggest names in the DeFi sector, such as MakerDAO and Decentraland. In February 2021, The Matic Network changed its name to Polygon.
How Does Polygon Work?
With the use of several sidechains (special blockchains tied to the major network), Polygon is a multi-level platform that intends to scale Ethereum by offloading the main platform in a more efficient and less expensive manner. It makes Polygon comparable with similar competing networks (Cosmos, Solana, Polkadot, and Avalanche).
The Polygon software development kit (SDK) is the backbone of the network and is used to create sidechains for decentralized apps that are compatible with Ethereum and link them to its main blockchain. The blockchain leverages several scalability methods to run transactions:
Plasma Chains (bundling transactions into blocks);
zk-Rollups (multiple transfers within a single transaction);
Optimistic Rollups (the same as Plasma Chains, but with scaling of Ether smart contracts).
Here are some other technical properties of the Polygon network.
Framework for Blockchain Networks
Future decentralized frameworks from Polygon will enable users to create an interconnected blockchain, or an "Internet of blockchains." This will enable developers to craft independent, adaptable, and scalable blockchains that can still be a part of a bigger ecosystem.
Ethereum Virtual Machine Compatibility
Ethereum Virtual Machine is used by plenty of developers to create dApps because it is comprehensive and easy to handle. Polygon makes it simpler for developers to design and connect dApps thanks to its EVM interoperability. SushiSwap and Aave are among the numerous Ethereum applications that developers have released on Polygon.
Why Use MATIC?
The Polygon Network's capacity to scale Ethereum is what attracts supporters, and developers can utilize this technology to create more user-friendly dApps on its blockchain. Polygon's Layer-2 scaling solution enables faster and more cost-effective transactions, making it ideal for decentralized applications. It also provides a bridge to the Ethereum network, allowing developers to leverage the security and ecosystem of Ethereum while benefiting from the enhanced scalability of the Polygon blockchain.
Advantages and Disadvantages of Polygon
Now, let’s weigh the pros and cons of the Polygon network for both end users and developers.
The advantages of Polygon include:
Fast transaction processing. The network is able to maintain swift transaction processing speeds by utilizing a consensus method that completes the confirmation procedure in a single block. Processing of a single block takes an average of 2.1 seconds.
The cost of transactions is always low, with the average price being around $0.01.
At the same time, the blockchain is not devoid of drawbacks:
It is not fully autonomous because Polygon is a Layer 2 solution that runs on top of the Ethereum network. It could lose value if the Ether platform gets severely disrupted or disappears.
Limited MATIC use cases. Polygon tokens are intended to control, safeguard, and cover transaction costs for the platform. However, MATIC is not typically utilized for everyday operations, in contrast to other blockchain networks’ native currencies.
Polygon vs. Ethereum
While Ethereum is a standalone network, Polygon is one of its supplementary scaling solutions. The goal of Polygon is to make Ether a better development platform. By offering extra capabilities in the areas of security, blockchain sovereignty, user and developer experience, Polygon enhances Ethereum.
A modified proof-of-stake technique is used by both Ethereum and Polygon to execute transactions rapidly and affordably. But while Polygon enhances Ether’s technical capabilities, it cannot function separately, being a Layer-2 solution.
Future of Polygon
In 2021, Polygon established Polygon Studios as a division with a focus on blockchain games and non-fungible tokens (NFTs), so creators are focusing on the Web 3.0 gaming sector. Right now, Polygon is one of the major blockchains hosting blockchain games, and the team behind it continues moving in the direction of decentralized gaming.
How Can I Buy MATIC?
The simplest way to purchase MATIC tokens is through one of the major cryptocurrency exchanges. You can open an account and then fund it with local currency via platforms like Coinbase, Binance, Bybit or Kraken. Some decentralized wallets like Metamask also allow purchasing tokens with a debit card through mediators.
However, hot wallets by centralized exchanges leave a lot to be desired from the security standpoint, so you should consider a safer alternative – OWNR Wallet. This is more than just a storage solution. OWNR Wallet has the following advantages:
In-built exchange feature – swap cryptocurrencies within a few seconds.
Buying crypto with fiat – use your bank card to purchase dozens of tokens OR sell it and get fiat transferred to your bank account.
Accessibility – manage your assets at home (Linux, Mac and Windows versions are available) or on the go via the mobile app.
Over-the-counter transfers of any volumes.
The possibility to restore any of your HD wallets with a seed phrase.
Customizable fees – you can set up your own fee for exchange to temper sudden spikes or to speed up the transaction.
Is Polygon Crypto a Safe Investment?
Since all cryptocurrencies tend to be volatile, MATIC cannot be called a 100% safe haven for investors because its price depends on a number of factors and can change pretty quickly. Let’s observe them.
The Plus Side of Polygon
Polygon seems to be a pretty viable project. They hired a lot of people during a time when many other cryptocurrency companies, like Coinbase and BlockFi, filed for bankruptcy and were laying off personnel due to the crypto winter.
Numerous well-known collaborations (Dolce & Gabbana, Macy's, Adidas, Prada, Stripe, Adobe, and Meta) could contribute to the project’s success.
By March 2023, Polygon had hosted more than 53,000 dApps in total. The platform should remain useful for a very long time due to the enormous number of applications it supports.
Negatives Associated With Polygon
Polygon is an Ethereum layer, so it cannot function without this network. Its rivals include other currencies and Ethereum itself, on which it also depends.
Developers of Polygon dispute this, claiming that despite The Merge, their network will still be useful since it delivers faster transactions and enables connections between Ethereum and other networks. However, Ethereum may be replaced by another programmable blockchain in the future, which would knock Polygon off the top.
Is Polygon a Good Long-Term Investment?
The MATIC token’s volatility is on par with what you would anticipate from any other cryptocurrency. The inventors may have more ambitious ideas for the future, but there is no guarantee that competition from Ethereum or other networks won't make the coin less valuable and popular. In addition, the currency has so far been unable to maintain its price during the ongoing crypto winter, suggesting that the price may still be decreasing.
Main Competitors of Polygon
Polygon (MATIC) faces competition from several blockchain networks:
The main Ethereum blockchain is the primary competitor, known for its smart contract capabilities and decentralized applications. It has a vast developer community and widespread adoption.
BNB Chain offers low transaction fees and fast confirmation times, making it a strong competitor in the DeFi and dApp sectors.
Solana's high throughput and low fees have attracted projects in the gaming and NFT sectors, posing a competitive alternative for Web 3.0 applications.
These networks challenge Polygon's position in the market, each offering unique features and benefits for blockchain developers and users.
Polygon (MATIC) is a versatile Layer-2 scaling solution for the Ethereum blockchain. It aims to address Ethereum's scalability issues, providing faster and cheaper transactions while maintaining compatibility with Ethereum's ecosystem. Polygon offers a range of sidechains and tools, making it a popular choice for developers seeking to build decentralized applications and improve the overall user experience on the Ethereum network. Its flexibility, security, and commitment to decentralized innovation position Polygon as a key player in the world of blockchain technology and DeFi.
What does Polygon MATIC do?
It serves as a Layer-2 sidechain for the Ethereum network, adding to its scalability and transaction processing speed. Polygon is used to create dApps and blockchain games.
Is Polygon MATIC a good investment?
Just like any cryptocurrency, the MATIC token’s price is volatile and depends on a large variety of factors. However, the project proves to be viable, and creators plan to make it one of the top blockchains for Web 3.0 gaming.
Why is Polygon MATIC so popular?
This blockchain has become widely adopted thanks to superb technical capacities: better scalability than on Ethereum, faster transaction speed, and minor transaction fees. Hence, Polygon serves as a cheaper and more efficient solution than the Ethereum and Bitcoin blockchains.
Is Polygon better than Solana?
Polygon and Solana serve different purposes. Polygon is a Layer-2 solution for Ethereum, enhancing scalability and interoperability, while Solana is a standalone blockchain with high throughput. The choice depends on the specific use case, with Polygon excelling in Ethereum compatibility, and Solana offering high-speed transactions and low fees for diverse applications.
How much are MATIC coins worth?
At the time of writing this article (October 2023), 1 MATIC costs $0.56, with Polygon’s total market cap being around $5.2 bln.
How many Polygon Coins are there?
At the time of writing this article (October 2023), the circulating supply is 9,299,803,031 MATIC, while the total supply is 10 bln MATIC.
DISCLAIMER: None of the authors, contributors, administrators, or editors connected to OWNR Wallet encourage readers to invest in Polygon (MATIC) or other cryptocurrency without doing proper research on their own. This article is purely for educational purposes only.