Polygon Network: Cheap, Fast L2 Ethereum Scaling Solution
The Polygon network is a platform for building Ethereum-compatible blockchains. Polygon aims to become the Ethereum Internet of Blockchains, allowing anyone to create an independent blockchain while still connected to the Ethereum main chain. Such sidechains could bring ultra-high scalability and dramatically lower transaction fees.
In this Polygon network review, we will identify what makes it unique within the crypto ecosystem and see some fascinating details about it.
Let's jump right in.
What is the Polygon Framework?
Polygon began as the Matic network in 2018. The Matic network rebranded to Polygon during February 2021 and has been rising ever since. Following the rebrand, the price of MATIC, the Polygon native token, has exponentially increased. As a result, what started as a simple Ethereum scaling solution evolved into a fully-fledged flexible framework for building interconnected blockchain networks.
What is an Interconnected Blockchain Network?
Blockchain networks are independent, sovereign chains capable of communicating with one another. They provide data and state separation and a better scalability performance.
Ethereum nodes share a common blockchain and global state. As a result, whatever happens on one node is broadcast to all others. Consequently, smaller independent sidechains cannot exist within this network. Instead, application-specific chains help distribute the load in high-volume peaks. Take, for example, an NFT drop with thousands of transactions, causing fees to spike immediately.
Who is the Core Polygon Team?
Polygon is an open-source project built by a decentralized team of contributors from all over the world. Co-founders include India-based Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihalio Bjelic. All founders come from the core blockchain developers community.
Which Problems does Polygon Solve?
There are already millions of people using the Ethereum blockchain. Nevertheless, it is far from perfect. Below are a few infrastructure development issues that Polygon is aiming to solve.
Ethereum can process roughly 13 transactions per second. To put this into perspective, Visa processes 45,000 transactions every second. Moreover, gas fees, or transaction processing fees, can spike while the network may experience congestion and high traffic. A clogged network is problematic for NFT drops, and everyday use cases, as it raises gas prices with longer finality time.
Poor User Experience
In Ethereum, we verify blocks using Proof of Work (PoW), which is time-consuming and expensive. As a result, a transaction can take a long time to reach finality, the time it takes to mine a block. Ethereum 2.0 will transition to the faster Proof of Stake mechanism, but this might only be in a year or two. Additionally, as we said before, the main Ethereum blockchain is often clogged with high gas prices. Our fast-paced ecosystem needs more.
On the Ethereum network, all nodes share a global state. Every time something happens, all nodes receive an update. Therefore, it’s impossible to separate yourself from the network while remaining connected. As a result, when the network is clogged, everyone is affected. With Polygon, you will be able to work with separate, independent blockchains while still being connected to the main Ethereum network. Additionally, you’ll get a stand-alone governance mechanism for every smaller sidechain.
How Does Polygon Network Work?
A Polygon network comprises four layers, of which only two are mandatory to form a multi-chain system.
Ethereum Layer (Optional)
This layer contains smart contracts implemented on Ethereum. The smart contracts handle finality, staking, dispute resolution, and communication between Ethereum and other Polygon sidechains.
Security Layer (Optional)
A modular "security as a service" layer offered by the Ethereum chain or a pool of Polygon node operators working as "validators as a service." They can periodically check the validity of any Polygon chain for a fee. Additional levels of security can be added, such as validator management to create secured chains. This layer can run independently or on Ethereum.
Polygon Networks Layer
A network of sovereign blockchains. The networks serve their communities by maintaining transaction collation (grouping), local consensus, and block production. In addition, the Polygon protocol allows each network to connect with other networks and exchange arbitrary messages.
Polygon Networks' blockchains operate using this layer to interpret and execute each transaction. The execution layer has two sublayers. First, there is the execution environment, a pluggable virtual machine implementation. Then there is the execution logic. The logic includes the state transition function of a specific Polygon network, which is usually an Ethereum smart contract.
Why Makes Polygon a Scaling Solution?
Polygon uses a variety of technologies to create faster, cheaper transactions. Currently, Polygon can support up to 100 transactions per second, with plans to increase this number in the future. These technologies include Polygon Hermez, a ZK Rollup, an Optimistic Rollup, the Polygon Plasma, and the Polygon PoS network, which we’ll explore later in this post. In addition, the Polygon Matic sidechain runs parallel to the Ethereum Main Network and uses Polygoc Matic as its native token. With these technologies, transaction processing can be offloaded from the main Ethereum network, which is used only for storage and verification.
Developing Dapps with Polygon SDK
Dapps, or decentralized applications, are at the core of the Polygon framework. Within the Polygon SDK, developers can find many handy tools to extend, improve, and create.
New Blockchain Network with a One-Click Deployment
The Polygon SDK includes everything you need to start and is built in Go. You can deploy a network in one click. Check out their GitHub, where you'll find the code you need to start. Don’t forget to use the Polygon Testnet Mumbai, where you can test smart contracts and other operations for free.
Ethereum Compatible Blockchain Networks
The software development kit includes a custom EVM (Ethereum Virtual Machine) implementation, which means that Polygon smart contracts are the same as Ethereum ones. Since both use the same programming language, new participants can join quickly. In addition, you can use your preferred smart contract language, such as Solidity or Vyper, and benefit from Ethereum's features and ecosystem tools. For example, use MetaMask or another Ethereum wallet already familiar to users.
The built polygon SDK from the ground up is highly pluggable and extensible. By doing so, the core component layers can remain performant while the community can easily create its extensions. Check out the variety of modules on the documentation website.
Matic: Polygon's Native Token
The Polygon ecosystem relies on its native MATIC as the Matic network native token. Polygon MATIC tokens are primarily used as gas fees for any transaction you want to process. Additionally, Matic is used to deciding on new protocol improvements and staking for governance purposes.
[stockdio-historical-chart symbol="MATIC" stockExchange="crypto" width="580″ height="380″ motif="financial" palette="financial-light"]
Polygon Main Blockchain - Matic Network
The main Matic network is where everything happens. This proof-of-stake network is in which independent validators verify transactions. As of December 2021, the network has a total market cap of 18 billion dollars and processes an average of 4 million transactions per day. That’s 46 transactions per second. View more charts on the official charts page or the Polygon Gas Tracker to view the transaction cost.
Who Runs the Polygon Network?
Polygon allows 100 validators at any moment, selected via an on-chain auction on designated checkpoints based on staking. You could run a Polygon validator yourself by following these instructions and running a full Polygon node. However, bear in mind that you’d have to stake many MATIC tokens.
An easier option is to delegate your MATIC tokens to a validator node for staking. It’s basically like lending your money to the validator. Use the Rewards Calculator to see how much you’d receive for delegating, but expect something between 9-12 percent interest yearly.
How Can I Get MATIC?
For every transaction in the Matic network, you’d have to pay gas fees in MATIC. The validator operators collect these fees for operating and maintaining the network. Therefore, you need to have MATIC coins in your wallet before creating a transaction.
Once you own MATIC, you need to ensure it’s in a web-based wallet. For example, if you’re using Metamask, make sure you follow these instructions to add Polygon to your wallet. Then, use the Polygon Web Wallet to verify your Polygon assets.
Give Me Lower Network Fees
In general, Polygon is ~2000 times cheaper than Ethereum. For example, an average NFT transfer would cost 33.55 dollars on Ethereum while costing only 0.016 dollars on Polygon. That's a whopping x2000 difference!
The Polygon price for a single transaction is much lower than many competing crypto platforms. This is because transaction fees are paid through Polygon MATIC tokens and are calculated based on the MATIC crypto exchange rate. This is especially important in the DeFi world, where rapid operations may occur.
The lower prices are thanks primarily to the PoS architecture and the smaller subsets of independent chains.
Comparison of gas fees between Ethereum and Polygon in the Polygon Gas Station.
Polygon Bridge: Transferring Between Chains
Bridges in the crypto world are smart contracts that get tokens from one blockchain and exchange them for other crypto tokens of a different network.
The Polygon Bridges allow you to swap Polygon MATIC tokens between the Ethereum Mainnet and the Polygon Mainnet easily and securely. Using bridges, you can move tokens and convert your coins. To move coins from Ethereum to Polygon PoS, the user needs to lock funds in a contract, and the corresponding tokens are then minted on the Polygon algorithm.
Which Polygon Bridges Exist?
There are two official bridges, the PoS bridge, and the Plasma bridge.
Withdrawing assets back to Ethereum is a 2 step process in which the asset tokens have to be first burnt on Polygon. Then the burn verification transaction has to be submitted to the Ethereum main network.
The most recommended is the PoS bridge, meant for decentralized application developers looking for flexibility and faster withdrawals. It is secured by the PoS validators and the highest security available. The withdrawal time would be 20 to 30 minutes, which is one checkpoint period.
Alternatively, you can use the Polygon Plasma bridge to increase security with a Plasma exit mechanism. The withdrawal time is as low as 2 seconds. However, the big caveat is that it doesn’t support all token types, and Ethereum tokens are locked for seven days.
Who Builds on Polygon
There are currently more than 3000 DApps already live on Polygon PoS. Users can find various solutions ranging from decentralized finance platforms, or DeFi, all the way to NFT marketplaces, gaming platforms, and crypto exchanges.
Famous NFT platforms are OpenSea, Decentraland, and Gala Games.
Major DeFi platforms include AAVE, SushiSwap, Curve Finance, and 1Inch.
Conclusion: Scaling Ethereum with Polygon
As we saw, Polygon has already become a significant player in the crypto ecosystem, especially with the rise in Polygon price. The huge demand coming from the NFT and DeFi worlds, together with cheap, reliable transaction costs, is a good sign for a bright future. What makes it unique is the compatibility with the existing smart contract programming scripts and developer tools, which give it a real edge. Millions of users are already using it, so let's see what else the future will bring!