What is the Polygon Network (POL ex-MATIC)?

Ethereum is one of the most popular blockchain networks to date, simply due to its capability to support blockchain apps. NFTs, DeFi platforms, staking protocols: none of these exciting ideas would be possible without smart contracts. Smart contracts power blockchain apps behind the scenes, but the problem is, that running them requires processing a lot of data. Essentially, the Ethereum network was a victim of its success: its transaction times were affected massively by the number of complex transactions it had to verify and execute. In Ethereum’s infancy, it still used the proof-of-work consensus mechanism, meaning that processing these transactions was also too energy-consumptive.

To solve this issue, layer two blockchains came along. The idea was that layer two solutions could help share the burden of the transaction load. One of the most popular and important Ethereum layer 2s today is the polygon network. 

But what is the polygon network and how does it work exactly? 

What is the Polygon Network?

The Polygon network is an Ethereum layer two solution that offers cheap, near-instant transactions. It launched in 2017 under the name Matic. It has since grown to be one of the most popular chains in existence, with a market cap of over $7.5 Billion.

History of Polygon

Polygon was launched in 2017 under the name Matic. The network was co-founded by four software engineers based in Mumbai: Jaynti Kanani, Sandeep Nailwal,  Anurag Arjun, and Mihailo Bjelic. Initially, Polygon was created to help create a better user experience for Ethereum adopters. But since then, it has grown to stand on its own two feet, supporting apps from industry leaders such as Starbucks and Meta. 

Some of the polygon network’s investors include notable figures Balaji Srinivasa and Mark Cuban. Today, the Polygon network is still building, offering one of the most popular Ethereum layer 2 solutions to date.

What is Polygon (ex-MATIC)?

POL (formerly MATIC) is the native coin of the Polygon network. When you pay transaction fees on the polygon network, you will need to pay in Matic.  It’s also the coin paid to validators as staking rewards: this is due to Polygon’s proof-of-stake mechanism. 

POL is also an ERC-20 token. This means that you can use POL on any network that supports ERC-20 tokens, so it’s not just useful on the polygon network, you can use it in the wider Ethereum Ecosystem. 

However, it’s not the only currency on the polygon network. It’s also possible to bridge ETH and ERC-20 tokens across to the Polygon network, meaning you could pay for a service on Polygon using ETH, but you will always pay your gas fee in POL.

What is the Polygon Network For?

The polygon network helps its parent blockchain, the Ethereum network, handle some of the data-heavy work to process complex apps. To explain, Ethereum struggles with executing large numbers of data-heavy transactions at once. Thus when the network is congested, it leads to extremely slow transaction times and exorbitant fees. The polygon network is designed to work with Ethereum, sharing some of the load.

Let’s use an example to explain how it works:

Take a moment to picture a congested highway, with thousands of cars going under five miles per hour. Now imagine you’re on a high-speed train that runs parallel to the freeway, happily zooming past a bunch of disgruntled drivers.  If Ethereum is the highway, then Polygon acts like a high-speed train.

Polygon is what’s known as a layer 2 solution. It gives you the same result (a completed transaction) but handles the process much faster and costs much less than simply using the Ethereum mainnet.

The great thing about it is that it’s built on top of the Ethereum network’s infrastructure. This makes it easier for developers to build apps and services and allows you to bridge assets between networks with ease.

How does the polygon network work?

The polygon network is a long-running Ethereum layer 2, and thus there’s more to its tech stack than meets the eye. Let’s look into how each part of the polygon network works and how it all fits together.

Polygon is a sidechain

Polygon is a sidechain. For a full explanation, check out the article on what sidechains are. But essentially, it means that it can process transactions away from the main Ethereum chain. This allows it to handle up to 65,000 transactions per second, a whole lot more than Ethereum’s 12-15 per second. It also allowed Polygon to use a proof-of-stake consensus way before the Ethereum mainnet joined suit during the Merge in 2022.

Polygon Connects to Ethereum Via a Blockchain Bridge

To communicate with its parent chain, Polygon assets can be sent to Ethereum and back using its blockchain bridge. To clarify, a blockchain bridge doesn’t send the assets. Instead, it holds the assets in a smart contract on the original chain and then issues tokens of equal value on the chain you’re attempting to move funds to.  Then if you want to move the assets back to the original chain, you return the tokens to the bridge. The blockchain bridge will destroy the tokens and release the original currency to your wallet.

While polygon’s bridge has been secure so far, bridges introduce a risk: just one bug or flaw in the contract’s code could end up in an exploit. Unfortunately, blockchain bridges are prime targets for competent hackers. 

ZK and Optimistic Rollups

Finally, the polygon network also makes use of blockchain rollups. To explain using rollups allows Polygon to process groups of transactions off-chain and send the data to the main chain in smaller packages. This greatly reduces transaction times and costs and helps the Ethereum mainnet stay uncongested. 

Instead of implementing just one type of blockchain rollup, the polygon network allows developers to use either of these types when building applications. 

Benefits of the Polygon Ecosystem

Accessibility

Some of the critical problems that Polygon set out to solve include Ethereum’s low throughput (transactions per second), high gas fees, and of course, its network traffic in general. But most importantly, Polygon wants inclusivity. Ethereum’s transaction costs and gas fees have left millions of users out in the dust. It’s just not affordable to most people.

Overall, Polygon enhances the user experience on the blockchain by facilitating cheap, instant transactions while also being compatible with other blockchain networks and tokens. The Polygon network was built relatively fast. As the team was racing to put out its Layer 2 solutions that the DeFi community desperately needed.

Lower Gas Fees

Next, Ethereum’s high crypto gas fees have always driven its users to explore sidechain options like Polygon.

Sidechains like Polygon are picking up steam very fast. Thanks to their tech, you get the best of both worlds. You are freeing yourself from the high fees of networks like Ethereum, while still being able to reap all the core benefits of blockchain.

Risks of The Polygon network

While there are plenty of benefits of the chain, it also comes with its own risk. 

Possible Collusion By Network Nodes

Polygon runs its separate blockchain nodes which validate and process transactions. Since the network is much smaller than the Ethereum network, it also has fewer nodes. This introduces a possible risk of collusion, as there are only a handful of people operating the nodes. That said, Polygon has strict mechanisms for punishing malicious nodes. Any node operator found to act without the network’s best interests at heart will have their stake slashed.

Solution to contribute to decentralization

POL on-chain staking on Polygon allows users to actively participate in validating transactions and securing the network. By staking your POL via Meria, you contribute to the decentralization and resilience of the network, while receiving regular POL rewards. This process also offers the opportunity to vote on governance proposals, influencing the future of the project. Accessible to all, POL’s on-chain staking offers an opportunity to generate passive income while supporting an innovative and successful project in the blockchain ecosystem.

Using the Polygon Network With Ledger

Using the Polygon network is easy and secure within the Ledger Ecosystem. Simply create a Polygon account in Ledger Live to start exploring Polygon. Via Ledger Live you can buy, swap, and manage your POL (formerly MATIC) seamlessly. You can also manage your Polygon NFTs with ease, sending them to any other Polygon wallet without the need for blind signing. 

 With Ledger, you can rest assured that your private keys stay offline. So what are you waiting for? Start exploring the polygon ecosystem with the comfort and security of self-custody on your side.