Polygon or “Ethereum's Internet of Blockchains” is a decentralized Ethereum scaling platform. It is formerly known as the Matic Network. Polygon was initially aimed at solving Ethereum platform’s problems of high fees and low transaction processing speed. Polygon is now a network of second-layer (L2) solutions and autonomous sidechains to create, maintain and connect scalable decentralized applications (dApps) and blockchains compatible with Ethereum.
Polygon was founded in 2017 by Anurag Arjun, Mihailo Bjelic, Jaynti Kanani and Sandeep Nailwal. Polygon's native token is MATIC.
In 2017 Anurag Arjun, Mihailo Bjelic, Jaynti Kanani and Sandeep Nailwal founded a company called Matic Network. The primary challenge facing the Matic Network was the scaling of Ethereum. The team then worked on creating Matic Plasma Chains and Polygon PoS Chain solutions. In April 2019, the network's underlying MATIC token was distributed through the Binance Launchpad.
In mid-2020, The Matic Network Mainnet was launched. As transaction fees increased on Ethereum and the scaling issue became ever more urgent, the project raised great interest.
In February 2021, Matic Network becomes Polygon, "The Internet of Ethereum Blockchains". Polygon is aimed at developing an ecosystem that allows users to combine different scaling solutions – both second-level solutions (L2 solutions) and sidechains.
Polygon runs on Ethereum. It creates and connects projects compatible with Ethereum. Polygon complements Ethereum by providing users additional features related to security, blockchain autonomy, user experience (UX), developer experience (DX) and modularity. Polygon enables deployment of existing blockchains and development of new unique ones, as well as communication between Ethereum and other blockchains, and reconciliation between Ethereum and other existing blockchain networks.
Scope and Vision
Polygon aims to increase flexibility, scalability, and autonomy of blockchain projects while maintaining security, compatibility, and structural advantages of Ethereum. The platform provides high speed transactions at low fees to promote availability of Ethereum and decentralized projects, DeFi (decentralized finance) tools in particular.
Polygon has consistently low transaction fees. A regular Polygon fee is 1 cent. Another important advantage is the high speed of Polygon transactions. The throughput capacity of Polygon is up to 65,000 transactions per second (TPS).
MATIC is a native Polygon coin on the ERC20 protocol. It is compatible with other cryptocurrencies on Ethereum. MATIC is used to pay transaction fees on the platform and to manage and secure the Polygon network. The maximum supply of MATIC is 10 billion tokens. 7.53 billion MATIC tokens are already in circulation. The price of MATIC rose from $0.01 per token on January 1, 2021 to a high point on December 27, 2021, when MATIC was worth $2.92 per token.
In 2017, at its first private launch, Polygon’s team sold 3.8% of MATIC supply. Later, they received an initial trade offer and sold another 19% of it. The developers themselves own 16% of all MATIC, advisors owning 4% and 12% accounts for staking rewards. The ecosystem owns 23%, remaining 22% went to budgeting the Polygon fund. On January 18, 2022, Polygon implemented its version of EIP-1559, and MATIC became a deflationary token.
How it works
Polygon’s architecture is generic and abstract. It allows dApps (decentralized applications) to choose a scaling solution that suits their project's needs best. Polygon's architecture enables smooth transition between scaling solutions. It also allows multiple Polygon-based scaling solutions to interact with each other, preventing the creation of isolated systems. Polygon’s architecture consists of 4 layer. Two of them are optional, and Polygon based blockchains are not required to use them:
- Ethereum layer. Polygon can use Ethereum as its base layer and exploit its high security. This layer is a set of smart contracts on Ethereum. It can be used for finalization and staking, dispute resolution and for messaging between Ethereum and Polygon;
- Security layer. Provides a "validators-as-a-service" feature. This feature allows Polygon blockchains to use validators to verify any Polygon chain for a fee. This layer usually runs in parallel with Ethereum. It is completely abstract and can have different implementation paths. It can be applied directly on Ethereum and use Ethereum miners as validators.
Two mandatory Polygon layers:
- The Polygon Networks Layer consists of independent blockchain networks. Each of these networks can support transaction collation, local consensus and block production functions;
- Execution layer is the interpretation and execution of transactions in Polygon chains.
Polygon's scaling solutions include:
- Polygon PoS, an EVM (Ethereum Virtual Machine) compatible sidechain;
- Polygon Hermez - an open source ZK-rollup (Zero-Knowledge rollup) on Ethereum;
- Polygon Avail is a generic and scalable blockchain focused on data availability and aimed at autonomous off-chain scaling solutions;
- Polygon Edge is a modular framework for building both private and public blockchains compatible with Ethereum;
- Polygon Nightfall uses Optimistic rollups along with ZK rollups (Zero-Knowledge rollups);
- Polygon Miden is based on STARK ZK-rollup (Zero-Knowledge rollup). It supports arbitrage smart contracts;
- Polygon Zero is a highly scalable ZK rollup compatible with Ethereum, using a fast recursive confirmation system.
As of March 2021, the number of unique addresses on Polygon PoS exceeds 200,000 and daily transactions hit 300,000. In June 2021, Polygon PoS daily transactions set a record of 9 million. There are 3000 decentralized applications (dApps) on Polygon by October 2021. Unique Polygon PoS addresses exceed 100 million. As of January 27, 2022, there are over 130 million unique addresses registered on Polygon with over 2.67 million monthly active users and 3 million daily transactions .
In March 2022, Polygon is announced to help the city of Lugano in Switzerland to build its blockchain infrastructure . In February 2022, Polygon received $450 million from Sequoia Capital India, SoftBank, Galaxy, Tiger, Republic Capital in a private auction of the MATIC token. On January 18, 2022, EIP-1559 went live on Polygon. In July 2021, Polygon Studios unit, aimed at Web3 gaming and NFTs, was launched. In January 2022, Ryan Wyatt becomes CEO of Polygon Studios .
In December 2021, Polygon becomes a part of a $200 million initiative to support Web3 projects . In September, EY and Polygon team up to create Polygon Nightfall, a scaling solution focused on security . In August 2021, Polygon establishes a strategic fund worth $1 billion to develop ZK (Zero-Knowledge) technology. Hermez Network joins Polygon to develop ZK EVM .