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Polygon started in 2017 through the efforts of CEO Jaynti Kanani, COO Sandeep Nailwal, and CPO Anurag Arjun. From its humble beginnings, where funds from family and friends helped support the venture, Polygon has reached great heights.
Polygon attracts global investors and has raised massive funds in two startup funding rounds in 2019. This venture has funding worth around $450 million from several investors.
Something even more interesting – Billionaire investor Mark Cuban features among the growing list of backers of Polygon.
With all this in context, it is certainly necessary for all crypto enthusiasts to be aware of Polygon.
Dive in to know more about this Indian-origin crypto.
Formerly known as the Matic network, Polygon is a stack of protocols engineered to fix the scalability issues of Ethereum. To address the network’s challenges, it handles transactions on a separate blockchain compatible with Ethereum.
Then it returns transactions to the main Ethereum blockchain after processing. This approach helps reduce Ethereum’s network load. And in doing that, Polygon can reduce transaction costs to less than one cent and speed up transactions.
In other words, Polygon offers an easy framework for existing and new blockchain projects to develop on Ethereum without any scalability issues.
Polygon was known as Matic network before it changed its name in February last year. Plasma sidechains were the primary offering of the Matic network.
Plasma chains are somewhat similar to side chains except that they provide higher security in exchange for convenience. These chains publish their “root” on the Ethereum layer 1 and will function depending on the assumption that its consensus mechanism might fail. This design is unlike sidechains, and it affords higher security. However, it renders these chains incapable of running complex operations.
After expanding the project, Polygon chose to keep the ticker MATIC for its native token. Hence, the Matic network became Polygon. This subsequent rebranding and change of name may confuse you, but you must note that they are indeed the same project. You can consider Polygon as the new umbrella for several projects, including the Matic network. However, the MATIC token is the native cryptocurrency of Polygon.
Polygon uses different technologies to develop a speedy parallel blockchain and link the same to the main Ethereum blockchain.
Polygon uses a proof-of-stake (PoS) consensus mechanism to create new MATIC and secures the network. This implies that staking is one way you can earn money on the MATIC you hold.
Validators add new transactions to the blockchain after verifying them. They may receive newly created MATIC and a cut of fees in exchange.
To be a validator, you must run a full-time node or computer and stake your MATIC. If you act maliciously, don’t have a proper internet connection, or make an error, you can lose some of the staked MATIC. So becoming a validator is a commitment.
Delegators indirectly stake their MATIC through a trusted validator. However, research is still necessary – if your chosen validator makes errors or acts maliciously, you can lose all or some of your staked MATIC.
You can buy Polygon (MATIC) on popular crypto exchanges like Binance and Coinbase. All you need is to set up an account, find MATIC tokens and buy them.
If you are an experienced crypto user, you can purchase Polygon tokens through DEXs (decentralised exchanges) like Uniswap. You can do so by using wETH (wrapped Ethereum), an ERC-20 token that enables you to trade Ether on decentralised platforms.
A Polygon wallet enables users to receive and send cryptocurrency assets, access the Polygon bridge to withdraw and deposit between blockchains and stake MATIC on the Polygon network to earn interest.
You will receive a non-custodial web wallet from the Polygon project. This wallet will allow you to manage your tokens on Polygon. Non-custodial wallets provide a user with exclusive control of the private keys. However, any ERC-20-compatible wallet can hold MATIC.
Considering the constant cryptographic advancements, partnership announcements, and the project’s massive scope, Polygon is performing exceptionally well.
It has built a strong reputation, and the MATIC token has set itself apart from numerous other projects on Ethereum.
Notably, Polygon’s list of partners is also growing rapidly. These include Atari, Coinbase, Ocean, and Chainlink.
Until ETH 2.0 launches completely, it isn’t easy to discern how promising this project will continue to be. However, with this project evolving, the market cap can undoubtedly expand.
But again, there is something that remains to be seen. And that is, whether this project would start stealing away a portion of the TVL that is presently locked on the Ethereum base layer.
Compared to its competitors, Polygon stands out as a layer-2 solution worth looking at. And, even though Polygon is still an emerging technology, it appears to be auspicious when scaling Ethereum successfully – for instance, by sustaining decentralisation and scaling without compromising security.