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What Is Polygon?
Polygon, formerly known as Matic Network, is a scaling framework that runs alongside the Ethereum blockchain. The native currency of Polygon is MATIC tokens more commonly known as a token of ERC-20. It was developed for the Ethereum system to build Ethereum-compatible blockchains.
Ethereum tokens can be stored by investors inside a Polygon smart contract where they can communicate with them before withdrawing them to work on Ethereum’s main chain.
Is Polygon a Currency Or A Token?
Polygon works as a sidechain to Ethereum’s blockchain and its main aim is to improve speed and cost of transactions throughout the blockchain. Ethereum has an extremely clogged blockchain as the system can be used for many services such as buying art, playing games, joining virtual worlds and most famously, its financial services.
MATIC is the currency of Polygon, otherwise known as an ERC-20 token of Ethereum. This token can be used as a unit of payment between users who interact with the network. MATIC plays a vital role in ensuring the security of the system and can be used to participate in the governance of the network by voting on PIPs (Polygon Improvement Proposals).
How Can MATIC Be Purchased?
MATIC can be purchased from several leading exchanges including Coinbase, CoinTiger, Huobi Global and Binance.
Who Founded Polygon?
Polygon was created in 2017 by a group of Ethereum developers; Sandeep Nailwal, Anarug Arjun and Jaynti Kanani.
Originally named The Matic Network, it first became available to the public in 2020 but rebranded as Polygon in February 2021. It has since attracted some of the biggest names in decentralized finance (DeFi) such as MakerDAO and Decentraland.
Since its inception, the project’s market cap has grown from $26 million to $14 billion.
What Is Polygon Used For?
The main use of Polygon is that it offers a solution to the Ethereum network that is unfortunately known to be slow and expensive to users. The Ethereum ecosystem struggled to maintain any kind of decent user experience when it gained popularity.
Polygon offers a stronger, more secure solution to the Ethereum network. But what else is Polygon used for? Let’s take a look.
Lending
Users are able to lend through Polygon which was made available through its partnership with the Dharma Protocol. Leading lender Aave has over $1 billion of liquidity stuck inside the Polygon platform with 8000 users.
Payment
Polygon can be used as a means of instant payment using ERC-20 tokens.
Games
The Layer-2 sidechain allows users to play games such as Cometh, Aavegotchi, Zed Run and Neon District with better speed and performance levels.
Benefits of Polygon
Network Fees
Network or ‘gas’ fees are a lot lower when using Polygon than they are on the Ethereum network.
Proof-Of-Stake Protocol
Polygon operates using a Proof-Of-Stake protocol which is a mechanism used to validate transactions in cryptocurrency. This essentially prevents users from double spending their cryptocurrency. It is different from other Proof-Of-Stake based blockchains due to the way the exchanges settle on the Ethereum blockchain.
Transaction Processing
The processing of transactions is much quicker with Polygon. MATIC developers are hoping that soon, the transactions per second will reach somewhere around 7000.
Framework
The Layer 2 framework allows developers to access any Ethereum-compatible blockchain without compromising the security of the network.
What Makes Polygon Different To Other Cryptocurrencies?
Polygon attracts other applications and blockchains to collaborate with its network and aims to reduce the complexity of scaling to enable quick and easy blockchain transactions.
The multichain Ethereum ecosystem provides interoperability by bridging blockchains, apps and products that lie within the network. The more connected a blockchain is, the more connected every user is to everything within a crypto network.
Polygon solves the issue the Ethereum system has with high fee structures by using the blockchain in a way that allows users to experience the services at near-zero fees.
While many similar solutions provide just one solution to a blockchain (a roll up), MATIC has the ability to work with many roll ups so they can be seen as a one stop platform. With this being said, MATIC is able to advertise itself to developers as a platform or simply as a scaling solution.
Conclusion
Polygon works alongside the Ethereum network as a sidechain to help speed up transactions and lower the cost of its services. Its native token MATIC can be used to make payments and enables users to participate securely within the system.
Polygon is also popular for its games which offer top-quality performance levels for players. Transactions can be sent quickly at a near-zero price which is down to the blockchain technology.
If you are thinking of investing in Polygon, it is a good idea to conduct thorough research into the network. Being fairly new, unfortunately there isn’t too much to go off, but the fact that it has a deep connection to Ethereum is a good indication of its future potential.