What is Polygon (Matic) and how does it work?

Polygon (Previously called as Polygon Matic) is a layer 2 scaling solution over the main Ethereum blockchain that aims to provide faster transaction speed to the users. With the growing popularity of the Ethereum network, it became a platform for minting and selling NFTs, building decentralized applications, and a base for decentralized finance as a whole.

Ethereum network relies on a consensus mechanism known as 'Proof of Work'. Due to this, it becomes difficult on the platform to increase the speed of transactions which in turn leads to high fees (also known as gas fees) on the platform. A high gas fee restricts users from performing operations on the blockchain. 

To solve this problem, Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic decided to build a platform called Polygon which would act on top of the main Ethereum network. The chain (or sidechain) works on the Proof of Stake consensus mechanism which enables faster transactions and lowers fees on the main network. For eg. To mint an NFT on the Polygon chain, there is no fee.

What is Matic?

The chain has its own native currency known as the “Matic” token which can be used for paying fees, staking, etc. Matic, which is an ERC -20 token, a standard token protocol on the Ethereum network, is currently tradable and available on most leading crypto exchanges. The total supply of the Matic token is fixed at 10 billion tokens. 

How does Polygon Blockchain work?

Over the last few years, Polygon has become one of the most famous blockchain-based solutions in the market. It functions just like any other blockchain. Every transaction happening on the Polygon chain is further settled and stored over the Ethereum network. This is because Polygon as a blockchain uses the same source code as that of Ethereum. The core idea is to enable developers to build projects fast and covert the blockchain into a multichain platform. 

The Polygon blockchain, as it functions alongside the main Ethereum chain, it groups all the data together on the chain and then processes them together to send it to the Ethereum blockchain. This is the main reason why Polygon can process 65000+ transactions per second as compared to Ethereum which can process up to 30 transactions per second. 

Polygon’s architecture is built upon -

• The Ethereum Layer
• Security Layer
• Polygon Network Layer
• Execution Layer

Polygon - Ethereum Layer

As the name suggests, Ethereum Layer is made up of multiple smart contracts that help in the execution, and transactions on the blockchain.

Polygon - Security Layer

The Security Layer working alongside Ethereum provides security to the blockchain.

Polygon Network Layer

Thirdly, the Polygon Networks Layer is the storing place of all the applications and projects being built on the Polygon blockchain.

Polygon - Execution Layer

Fourthly, the Execution Layer is responsible for executing smart contracts in sync with Ethereum’s source code. 

Advantages of Polygon Blockchain 

1. As it aims to address all the problems on the Ethereum network, it has reduced the transaction time. It only takes 2 seconds to mint a block on the Polygon blockchain. 
2. Due to lower costs, it has made the features of Ethereum and allied technologies such as Smart Contracts accessible to a majority of the users which in turn has led to developments and a rise in adoption of the main Ethereum network. 
3. Polygon, as a platform, is highly scalable and offers great staking rewards to its validators. 

Disadvantages of Polygon Blockchain 

1. The blockchain is entirely dependent on the main Ethereum network to work. If the network closes or breaks down, Polygon as a blockchain doesn’t have the independence to work. 
2. As Polygon is addressing some of the common problems of the Ethereum network, there are a lot of similar scaling solutions doing the same. It has led to increasing competition for the same. 
3. The sidechain might face a major threat from the main Ethereum network which is all set to upgrade to Ethereum 2.0. 

Conclusion 

Polygon, as blockchain technology has revolutionized the way decentralized finance works. It has made accessible all the technological advancements on the main Ethereum blockchain. The reduction in gas fees has led to its wide adoption which in turn has created the demand for Ethereum blockchain technology across the market. As the technology and markets are becoming mature, Polygon though ahead of its competition, may face some, especially from its own Ethereum network which is all set to upgrade very soon.