Polygon (previously Matic Network), a leading Layer 2 solution, was developed to enable interoperability among EVM-compatible blockchains, including Ethereum. In this article on Layer 2 Daily, let’s dive into the Polygon ecosystem and discover why its native token, MATIC, is one of the market’s top Layer 2 cryptocurrencies.
What Is Polygon (MATIC)?
Polygon (formerly known as Matic Network) is a blockchain platform designed to address scalability challenges while maintaining decentralization, allowing the existing developer ecosystem to be fully leveraged. Decentralized applications (Dapps) have been built on this platform, emphasizing its critical significance to the Ethereum ecosystem by expanding and improving the user experience.
Polygon functions essentially as a Layer 2 scaling solution, leveraging sidechains for off-chain computations while assuring asset security via the Plasma framework and a Proof-of-Stake (PoS) decentralized validation network. Consequently, it can provide user security and safety. Furthermore, the platform is planned to enable near-instant payments with a variety of crypto assets.
Polygon originally released its testnet in September 2018. Many projects have currently developed apps and integrated with this network, taking advantage of its various specialized utilities. Polygon promises to be a platform where a large number of developers may deploy and run Dapps.
Significant Features of Polygon (MATIC)
Main Features
- Polygon successfully employs features such as ZK-rollups, Polygon PoS, and Polygon Supernets that some of its competitors have not.
- Polygon PoS is an EVM-enabled sidechain that utilizes the Heimdall layer to support Polygon to eliminate bottlenecks and become more scalable.
- Polygon Supernets allow developers to quickly deploy modular blockchains customized for particular use cases while maintaining security.
Security
- Polygon’s operators are also stakers in the PoS system, playing as regular checkpoints that ensure security and consistency throughout the transaction life cycle, so Polygon is extremely secure.
- There are also approaches for achieving local consensus. Polygon adds an additional security layer to the network architecture, and its use of PoS in conjunction with Heimdall architecture makes it more secure than competitors.
Customization
- Polygon is easy to customize, allowing Ethereum-based Dapp developers to utilize their preferred programming language.
- The security layer and the additional Ethereum layer are not required. As a result, solution providers who employ Polygon have the entire freedom to customize to their own demands.
Ethereum Enhancement
- Polygon has been developed to utilize the Ethereum network fully.
- Polygon’s decentralized architecture allows the Ethereum blockchain to process 1000 times more transactions.
Others
- Scalability: Transactions on the Polygon network are fast, low-cost, and secure, with the same level of security as the main chain and Ethereum, the first compatible layer-1 database.
- High Throughput: Polygon can achieve up to 65,000 TPS (Transactions Per Second) much faster than Ethereum (around 10 to 15 TPS).
- Public Sidechains: Polygon sidechains are basically public, permissionless, and capable of supporting numerous protocols.
How Does Polygon Work?
Polygon is an Ethereum sidechain that runs in parallel to the Ethereum mainchain architecture and supports Ethereum Virtual Machines (EVMs).
Matic Network began as a scalability solution designed for Ethereum-based Dapps. Plasma chains, initially used to transfer crypto assets between the mainchain and the sidechain, are independent blockchains with their own consensus mechanism.
In 2021, Matic Network rebranded to Polygon and utilizes the ZK-rollups approach to improve Ethereum scaling. Its goal is to become the aggregator for all Ethereum Layer 2 scaling solutions and to transform Ethereum into a multi-chain network.
Polygon Architecture
Polygon is composed of four layers, each responsible for specific functions.
- Ethereum Layer: The Ethereum Layer functions as a chain for smart contracts with functions such as Dispute settlement, verification, and staking.
- Security Layer: The Security Layer operates as a super blockchain parallel to the Ethereum Blockchain. It is in charge of validator management, registration, Polygon chain validation, and incentives. Furthermore, this layer can be deployed by a variety of entities and organizations. Each Security Layer may retain its own specific features while being validated by Ethereum miners and deployed on the Ethereum Blockchain.
- Networks Layer: The Networks Layer consists of a series of independent Blockchain networks aiming to serve their own user base and community. Its role is block production and local consensus. The networks can link to each other using the Polygon protocol.
- Execution Layer: Once any Blockchain in the Polygon network has agreed on a transaction, the Execution Layer is utilized to interpret and execute the transaction. It is formed by two sub-layers.
Polygon Products
Polygon PoS
Polygon PoS, similar to BNB Chain, Fantom, and Avalanche C-Chain, is an EVM-based sidechain. It is the first and most popular product of the Polygon network.
Two months April-May 2021 witnessed notable development of this ecosystem, thanks to early projects such as Quickswap, QiDAO, Dfyn Network, and Dinoswap. However, due to its lack of clear strategy, Polygon witnessed a decrease in the Total Value Locked (TVL) from $9 billion in May 2021 to $1 billion.
Polygon PoS currently has over 500+ products built on its ecosystem, for example, Aave, Balancer, Uniswap, Curve, Stargate, and Opensea. Polygon intends to expand its operations, particularly in NFTs, Gaming, and SocialFi.
Polygon zkEVM
Polygon zkEVM emerged as a result of two acquisitions: Mir for $400 million USD in December 2021 and Hermez Network for $250 million USD in August 2021.
It is a Layer 2 scaling solution that employs the zkEVM programming language and Zero Knowledge Rollup (zk-rollup) technology. The current state of Polygon zkEVM is classified as zkEVM type 3 (compatible with EVM), according to Vitalik Buterin.
Polygon Miden
Polygon Miden is an Ethereum Layer 2 scaling solution utilizing zk-STARKs technology. According to Polygon, Miden will support the EVM language to facilitate development. Miden Virtual Machine (Miden VM), the first virtual machine based on STARKs security technology, was also introduced.
Polygon Supernets
Polygon Supernets is the App-chain product of the Polygon ecosystem, which is similar to Avalanche Subnet, Polkadot Parachains, and BNB Application Sidechain. App-chains play a role in enabling projects to customize blockchain to meet their requirements while maintaining the interoperability and security of the main chain.
Polygon Supernets does have some collaborators, like:
- DeFi & Gaming: Nu, Lemon, Ripio, Nexon, Plai Labs,…
- Infrastructure: Axelar, ANKR, Airchains, Bitquery, Bware, Bundlr, Band protocol, Covalent, Layer Zero, Sequence,…
- Supporting Partners: Settlemint, Ethrenal, Blockchain Studios, Nethermind, Gateway,…
Related Post: Palm Network to launch a Polygon-based Supernets chain next week
Polygon ID
Polygon ID is an identity infrastructure solution in the Web3 industry. This product was released in March 2022 and is expected to play a vital role in all Polygon chains.
Polygon ID, according to Polygon, can make governance and participation in DAOs more fair and convenient for users while still protecting their privacy.
Team & Advisors
Team
- Jaynti Kanani (Co-Founder): Blockchain engineer and developer for Web3, Plasma, WalletConnect. Previously, he was a data scientist at Housing.com.
- Sandeep Nailwal (Co-Founder): Developer, Former CEO of Scopeweaver, CTO of Welspun Group.
- Mihailo Bjelic (Co-Founder): Developer on Ethereum.
Advisors
Polygon has the support of some of the most influential minds in the Ethereum community, as well as well-known crypto companies.
- Hudson Jameson: A key member of the Ethereum Foundation
- Ryan Sean Adams: Founder at Mythos Capital
- Anthony Sassano: Member of EthHub
- Pete Kim: Head of Engineering at Coinbase
- John Lilic: Formerly worked at ConsenSys
Investors & Partners
Investors
Polygon has successfully raised a total of over 456 million USD through 8 funding rounds.
The largest funding round took place in February 2022 with 450 million USD. It was led by the investment firm Sequoia Capital, along with the participation of many other well-known investors such as Tiger Global, SoftBank, Galaxy Digital, Republic Capital, Animoca Brands, Spartan Fund, Dragonfly Capital, Variant Fund, and more.
Partners
Until now, Polygon has accumulated a large number of partners, mainly through its product Polygon PoS.
- Traditional Market Partners: Google Cloud, Meta (Facebook), Starbucks, Reddit, Stripe, Adobe, etc.
- Exchange Partners: Binance, Coinbase, Kraken, OKX, Huobi, etc.
- DApp Partners: Quickswap, Uniswap, Curve, Balancer, Sushiswap, etc.
What Is MATIC Token?
Key Metrics
MATIC now serves as a native token of the Polygon PoS network.
Below is some basic information about MATIC tokens:
- Token Name: Polygon
- Ticker: MATIC
- Blockchain: Polygon, Ethereum, BNB Chain, Solana, Moonbeam.
- Token Standard: ERC-20, BEP-20, PRC-20,…
- Ethereum Contract: 0x7D1AfA7B718fb893dB30A3aBc0Cfc608AaCfeBB0
- BNB Chain Contract: 0xcc42724c6683b7e57334c4e856f4c9965ed682bd
- Solana Contract: C7NNPWuZCNjZBfW5p6JvGsR8pUdsRpEdP1ZAhnoDwj7h
- Polygon PoS Contract: 0x0000000000000000000000000000000000001010
- Moonbeam Contract: 0x3405a1bd46b85c5c029483fbecf2f3e611026e45
- Token Type: Utility
- Total Supply: 10,000,000,000 MATIC
- Circulating Supply: 9,319,469,069 MATIC (July 2023)
Token Use Case
MATIC token offers the following use cases:
- Payment: MATIC can be used to pay for transactions and fees on the Polygon PoS network.
- Staking: MATIC holders can stake their tokens to help secure the network and earn rewards.
- Governance: MATIC holders can participate in the governance of the Polygon network, including voting on protocol proposals and decisions.
- Providing Liquidity: MATIC can be used to provide liquidity for decentralized exchanges (DEXs) such as Quickswap and Sushiswap.
- Collateral & Borrowing: Because MATIC has a high market-cap cryptocurrency, several lending platforms accept it as collateral for users to borrow other crypto assets.
- Ecosystem Incentives: A portion of the MATIC tokens is allocated to encourage developers and users to participate in the Polygon ecosystem, including the development and deployment of dApps on the network.
Token Allocation
With the total supply of 10 billion MATIC, tokens will be allocated as below:
- Launchpad: 19% (1,900,000,000 MATIC)
- Seed round: 2.09% (209,000,000 MATIC)
- Early Supporter: 1.71% (171,000,000 MATIC)
- Team: 16% (1,600,000,000 MATIC)
- Advisors: 4% (400,000,000 MATIC)
- Foundation: 21.86% (2,186,000,000 MATIC)
- Ecosystem: 23.34% (2,334,000,000 MATIC)
- Staking reward: 12% (1,200,000,000 MATIC)
Token Sale
- Seed Round: 209 million MATIC tokens with a price of 0,00079 USD/MATIC (170.000 USD)
- Early Supporter: 171 million MATIC tokens with a price of 0,0026 USD/MATIC (440.000 USD)
- IEO: 1.9 billion MATIC tokens with a price of 0,00263 USD/MATIC (5.000.000 USD)
Token release schedule
The total supply of 10 billion MATIC tokens was supposed to be distributed to the community by October 2022. Nevertheless, according to data from CoinMarketCap, there are over 600 million MATIC tokens that have not been unlocked or distributed.
How to Buy MATIC
MATIC is being traded on various crypto exchanges with a total daily trading volume of $193M. The token is listed on many major exchanges, including Binance, Coinbase Pro, Huobi Global, OKX, Quickswap (Polygon), Uniswap (Ethereum), Pancakeswap (BNB Chain), etc. This wide range of exchange listings indicates the strong demand and liquidity for MATIC in the crypto market.
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