One of the biggest milestones in the Web3 space was the introduction of Ethereum, which led to a surge of demand for decentralized applications (also referred to as dApps). Ethereum soon became the most popular network for developers to build, now hosting around 3000 different dApps.
And with popularity, came congestion. With most developers across DeFi, NFTs as well as games all looking to build on Ethereum, using the service became expensive. For example, one Ethereum user reported spending $44,000 USD to mint an Otherdeed NFT back in May. During this period, overall gas fees for the Ethereum network reached an all-time high.
Enter Polygon: a layer-2 interchain scaling solution for the Ethereum network. Built to solve the congestion problem, Polygon helps Ethereum expand in size, security and efficiency. Since its launch, the network has attracted some of the biggest names in DeFi including Aave, Decentraland and OpenSea. It has also enticed big investors, having recorded investments from the likes of Binance, Coinbase and Mark Cuban Companies.
Polygon, formerly Matic Network, was developed in 2017 and launched in 2020 as a layer-2 solution focused on the Ethereum blockchain. Aiming to “bring the world to Ethereum”, Polygon helps alleviate the network’s congestion and allow more users to access Web3.
Supporting Polygon’s speed, low cost and security is the Proof-of-Stake (PoS) consensus mechanism which invites users to contribute and participate in the network’s operations. This framework was designed with developers and their diverse range of needs in mind – providing the optimal tools for building, developers can build scalable, user-friendly dApps all with low cost, high security and interoperability.
The network now hosts over 19,000 dApps and 130M+ unique users, with an infrastructure designed to complement Ethereum’s decentralized security. As of date, Polygon has recorded over 3.4B transactions, proving to be one of the leading platforms for launching Web3 projects to a global audience.
As mentioned, the three key features of the Polygon network are speed, security and scalability. To understand how it achieves these features comes with understanding the underlying infrastructure supporting the overall network.
The Polygon network functions like any other PoS-based blockchain in terms of structure, tokens, applications and validator nodes. The main factor allowing Polygon to operate on low cost and high transaction speed (which in turn allows scalability), is its adoption of Commit chains. Commit chains are transaction networks which work adjacent to the main chain (in this case, Ethereum). They basically bundle transactions together and confirm them before returning the data to the main chain. This helps build throughput on the main chain and spread evaluating proficiency across the network.
Polygon’s high level of security can be attributed to its consensus mechanism, PoS, as well as its use of a Plasma bridging framework. The use of PoS as a consensus mechanism allows for PoS validators, who are responsible for running validator nodes by verifying transactions and adding them to the blockchain. PoS validators ensure a high level of security as its compensation structure makes malicious attacks on the network less advantageous and ensures validators work in good faith.
Additionally, its Plasma bridging framework, one which supports the moving of assets from the main chain to the side chain, also plays a role in the guarantee of security. This is possible due to the Plasma exit mechanism which creates exit NFT tokens of equal value to deposited assets, and places the NFT in a minimum 7-day challenge period where users are unable to access their funds. Although this sounds tedious, it is essential to guarantee security – however, understanding user concerns, the Polygon team has come up with an option for users to sell the NFTs in a secondary marketplace for higher liquidity.
Driving the Polygon network is its native token $MATIC, which can be used to pay transaction fees, stake or govern. $MATIC is the medium of exchange for two main groups helping to operate the network: validators and delegators. Anyone can become a validator by staking their $MATIC, which gives them access to running validator nodes – essentially verifying new transactions and adding them to the blockchain. In return, validators receive a cut of transaction fees and newly created tokens. Delegators on the other hand, are users who do not want to run validator nodes themselves. Requiring lower commitment, they can stake $MATIC indirectly by delegating their assets to a trusted validator. They are still critical to the ecosystem as they are responsible for choosing validators.
So why exactly are projects like Polygon essential to the Web3 space? How has it reeled in big investments and attracted DeFi juggernauts like SushiSwap, Aave, Curve Finance and 1inch?
Projects like Polygon provide the crucial infrastructure in scaling Web3, and eventually leading it to mainstream adoption, which has been difficult despite its rapid development over the past few years. Polygon’s considerable success can also be attributed to its consistent efforts in piecing together ways to improve what’s already there. Ethereum is a big name, but there are clearly ways it can do better in terms of security, efficiency and scalability. Polygon provides a fundamental gateway to scaling it further and eventually embedding it into the broader economy.
And Polygon’s work doesn’t stop here. It aims to expand beyond the scope of Ethereum and eventually become the trusted infrastructure for blockchain networks – almost like the “internet of blockchains”. On top of that, it continues to form strong Web3 partnerships, kickstart environmental initiatives, and build a tight knit community around their ecosystem. Becoming the ultimate framework for all blockchains seems ambitious, but it seems entirely possible based on the progress Polygon has been making since inception.
