Ethereum is the home to many dApps that allow users to explore virtual worlds, play games, and make financial transactions. There is just one problem, and that is the network transaction fees. Luckily, polygon hosts some Ethereum DeFi and even leverages the Ethereum blockchain for security. Most importantly, the polygon blockchain network makes it possible to buy, transfer and use your favorite Ethereum-based tokens at a near-zero cost.
What Is Polygon Crypto Network?
What blockchain is polygon helping to scale? What is Polygon, formerly MATIC? How will it help with scaling Ethereum? These are probably the questions on your mind. This article will answer them.
Before the rebranding to Polygon, the network was known as the Matic network. Matic network was founded in 2017 by three founders who were active participants in the crypto community—Jaynti Kanani, Anurag Arjun, and Sandeep Nailwal. The token behind MATIC network MATIC was distributed through the Binance launchpad’s Initial Exchange Offering (IEO) in April 2019. The team was able to raise $5.6 million. After 3 years of work, the MATIC network mainnet went live in mid-2020.
At the beginning of 2021, the Matic network team decided to expand the scope of its project and rebrand, which is how Polygon came to be. Polygon aims at creating a more decentralized scaling solution.
How Does Polygon Work?
Polygon’s network includes a Software Development Kit (SDK) that may be used to create decentralized sidechains and Ethereum-compatible applications. After that, they can be linked to the main blockchain. There are two main ways of doing it: layer-2 scaling and stand-alone chains.
This relies on the security of the main layer of the Ethereum blockchain—plasma sidechains, optimistic rollups, and zk-rollups are the most popular options.
Plasma Sidechain A plasma chain is a blockchain that runs in parallel to the main blockchain. Ethereum is the “parent” or “main” blockchain in this case. Plasma chains connect to the main blockchain and communicate with it, allowing assets to be securely transferred between them.
** Optimistic Roll-ups ** Optimistic rollups use a fraud-proof system when a fraudulent transaction is detected. A fraud-proof protocol self-executes and uses data from the main blockchain to determine the correct transaction.
** Zk-Rollups ** Polygon Matic network is a zk-rollup-based technology used to build and link Ethereum-compatible blockchain networks. It performs off-chain processing of transactions and generates validity proofs, ensuring that each data bundle is correct. After which, the validity proofs are forwarded to the main blockchain.
They usually rely on their security models by having a separate consensus mechanism; the PoS chain is a good example. These networks are fully sovereign, which presents them with the highest level of independence and flexibility, making it more difficult to establish a reliable security model. PoS requires a high number of reliable validators; these kinds of models are usually suitable for enterprise blockchains.
Polygon architecture consists of 4 layers.
The Ethereum Layer.
Polygon chains can use Ethereum as their based layer and leverage Ethereum’s high security. This layer is implemented as a set of smart contracts in Ethereum. It can be used for finality, check-pointing, staking dispute resolution, and messaging between the Ethereum and polygons chain. This layer is optional as polygon-based chains are not obligated to use it.
Another optional layer which provides a service function that allows polygon chains to use a set of validators that can periodically check the validity of any polygon chain. The layer is responsible for validators’ management, registering, deregistering, rewards, shuffling, and polygon chain validation.
Polygon Network Layer
This is the first mandatory layer in the polygon architecture. The layer consists of sovereign blockchain networks where each network can maintain the following functions: transaction collation, consensus, and block production.
A mandatory layer is responsible for interpreting and executing transactions included in polygon chains. It consists of the execution environment and logic. The layer ensures that all transactions are executed safely and quickly and sent to the correct locations for all Polygon chains.
The main takeaway from Polygon’s architecture is that it is deliberately made to be generic and abstract. This allows other users looking for scalability to choose the best scaling solution that perfectly fits their specifications.
What is a MATIC token?
MATIC—the native token of the Polygon—is an ERC-20 token running on the Ethereum blockchain. It can be used
- to pay for gas fees far lesser than Ethereum’s
- by validators to stake the token to receive block rewards
- as transaction fees for verifying blocks.
Polygon’s speed and low cost have made it a popular alternative to Ethereum. Stacking rewards come from network fees and a pool of tokens allocated for staking rewards.
There is a total fixed supply of 10 billion MATIC with 7.7 billion tokens currently in circulation. When writing this article, it is the 17th largest cryptocurrency with a market capitalization of $11.5 billion.
The token distribution is as follows: Ecosystem-23.33% Foundation- 21.8% Launchpad sales-19% The polygon team-16% Staking rewards-12% Advisors-4% The remaining 3.81% is shared between seed and early supporters.
How to Invest in Polygon
Investing in the Polygon cryptocurrency is just like investing in Bitcoin. You just need to find a crypto platform that allows you to purchase the MATIC token. Users can also stake MATIC to earn rewards if it is allowed on the chosen platform.
Where to Buy Polygon Crypto?
Polygon (MATIC) is available for purchase on desktop and web version of Guarda crypto wallet. Here is a step-by-step guide to buying tokens on Guarda.
- Create an account on the Guarda if you are a new user and write down your password. Existing users can just log in by inputting their passwords.
- Once in the ecosystem, add MATIC wallet to your viewing list, download, and save the backup for future use.
- Click on the ‘buy’ button and input the amount you want to buy the MATIC tokens.
- Choose your preferred payment option. On Guarda, you can pay with Visa/Mastercard or SEPA.
- Verify your identity and payment. After verification, click ‘buy’ button. Your coins will appear in your wallet after validation.
Polygon vs. Ethereum
Many dApps have been launched on the Ethereum blockchain. The transaction must be approved before the tokens are created or purchased. The approval of a transaction requires the use of energy, and using an Ethereum blockchain involves the payment of that energy via a mechanism known as the Gas Fee.
The gas fee and demand for crypto have a clear relationship. The higher the demand, the higher the gas fee, and vice versa. Multiple transactions processed on the Ethereum blockchain have caused traffic congestion. That’s why the gas fee is high.
This is where Polygon comes in. Polygon’s speed and low gas fee have made it a popular alternative among crypto enthusiasts.
You might be thinking, “should I buy polygon crypto? You are the only one who can answer that question after researching the project, its developers, and understanding what you are getting into. We can only tell you that Polygon is operating incredibly well. The network distinguishes itself as a layer-2 solution to be reckoned with compared to its competition. And while Polygon is still a new technology, it appears to have the best chance of adequately scaling Ethereum, for example, by maintaining decentralization while scaling without sacrificing security.
Disclaimer: This text is written for information purposes only and never constitutes a call to action. All financial transactions carried out by you are made at your own risk. The Guarda editorial staff reminds you of the risk of speculation in financial markets.