Polygon was created to make working with Ethereum faster and cheaper. Then it became universal, gaining compatibility with other blockchains. And this was enough to take a place in the TOP-20 cryptocurrencies. Yes, he also changed his name for some reason.
Ethereum is by far the most popular place in the crypto world for decentralized solutions. The flip side of the coin is significant network congestion. And this is not the only disadvantage: the speed of transactions is limited by the Proof-of-Work consensus algorithm, the commissions on Ether cost as “an airplane wing”.
These disadvantages led to the emergence of competitors — Solana, Polkadot, and more. Unlike the above Ethereum “killers,” the Matic project (as Polygon was called before it was renamed) was designed as an add-on for Ethereum and on Ethereum.
Taming The Plasma
The three co-founders of the blockchain, Indian software engineers Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun launched the Matic Network testnet in October 2017. In 2020, when the network officially changed its name to Polygon, Serbian programmer Mihailo Bjelic joined the team.
The ideas with which the first founders entered the market were already almost ready for production. So, in August 2017, one of the creators of the Lightning Network, Joseph Poon, and the mastermind of Ethereum, Vitalik Buterin, published the whitepaper of the Plasma framework.
This software provided for the transfer of some parts of the transactions to a separate, side chain. Which, functioning as an independent blockchain, would work on the Proof-of-Stake consensus algorithm, would take over the functions of confirming records, reducing the load on the Ether network, but with access to Ethereum functionality.
By adapting Plasma technology, the creators of the Matic Network developed their MVP software — More Viable Plasma. Its use makes the network a sidechain — an additional chain that functions apart from the main chain, or rather, above the main one.
Primary Transaction Processing At Fantastic Speed
First, let’s look at the horizontal line at the bottom of this illustration. Quick and cheap transactions take place here. Their number per second can reach several thousand, even several tens of thousands per second (coinmarketcap writes about a fantastic 65,000), while the block confirmation rate is about two seconds. Transactions are sent here, to this level, for which the speed and fee of the Ethereum platform are unacceptable, but for which its capabilities are necessary.
This level also includes the block production layer, which is responsible for aggregating transactions into blocks, and the Heimdall layer — the validators layer. At this level, blocks are generated in the Merkle tree, and then the information about the records goes through internal security controls and gets to the general Ethereum network for recording.
So, initially, the Matic Network took care of the primary processing of transactions before they were completed on the Ether network — this was the limitation of the first version of the blockchain, or more precisely, of the sidechain.
How The Polygon Works
In 2019, Matic Network began moving to its network, for which it was renamed Polygon. Since then, the platform consists of four levels — two mandatory and two optional.
The first is the level of interaction with Ethereum. It consists of smart contracts designed to process transaction completions, stakes, and interactions between Ethereum and the various Polygon sidechains. This level is optional, but quite loaded, which largely explains the surprising survivability of the Polygon token during the global market collapse in the spring of 2021.
The second is the security level. It is an optional layer that works side by side with Ethereum and provides users with an additional “validators-as-a-service” feature. There is a set of validators at the level that, for an additional fee, can periodically check the validity of any Polygon chain or act as a metablock for operation with Ethereum or other platforms.
The third level is a blockchain network ecosystem built on the Polygon platform. This mandatory level consists of independent blockchains that serve their respective communities and perform the following functions:
- transaction sorting;
- local consensus;
- block production.
The fourth layer is the execution level. It interprets and executes transactions that are agreed upon and included in Polygon blockchains. It consists of two sublevels. The first one implements a connectable virtual machine, and the second one runs the execution logic, performing the function of transition between the states of a particular Polygon network (usually this function is recorded as a smart contract in Ethereum).
As a result, circuits running on Polygon can exchange data with each other as well as with the Ethereum main chain thanks to Polygon’s arbitrary messaging capabilities. ЭThis makes it possible to implement many new use cases, such as interoperable decentralized applications and simple asset exchanges between different platforms.
Polygon, like Polkadot and Cosmos, is designed to bridge the gap between different blockchains, allowing them to operate as a large interconnected network, enabling seamless communication between different decentralized products and services. At the same time, it solves the problems of high fees, poor scalability, and limited security, but unlike its competitors, it is compatible with the Ethereum virtual machine.
According to analysts, this feature alone is not enough for Polygon to withstand competition from similar projects in the future.
Despite The Market
When the growth of cryptocurrencies in the spring of 2021 was followed by an overall fall against the background of the Chinese leadership’s statements about the importance of electronic money strict regulation, few currencies maintained positive momentum, and only a few increased significantly.
At its peak in mid-May, the value of the MATIC token rose more than 13,000% from the beginning of the year, from $0.01781 (Jan. 1, 2021) to $2.4544 per token (May 18, 2021). Then the exchange rate depreciated, and in the average annual perspective, we can talk about a more modest growth of about 10,000 percent.
MATIC first became a public currency in 2019, when the platform issued 32% of its total currency supply through an initial public offering, which amounted to 3.2 billion tokens, for which about $5 million was received.
Initially, MATIC was conceived and acted as a service currency to provide payments within the platform, as well as for staking. The positive momentum at the beginning of 2021 and the functionality of multi-blockchain turned out to be the features of the project, whose currency experienced an explosive leap that impressed many analysts, but also made them wonder how bright the prospects are for blockchain, which has rightfully become the discovery of the year. But the answer to this will only come in time.