Ethereum is great — it’s the most popular hub for DeFi development activity and by far the most secure smart-contract capable blockchain in terms of miner and node activity. But it has a couple of serious limitations… it doesn’t play well with other blockchains and it suffers from serious congestions issues as a result of staggering user demand.
But Polygon, a framework for building Ethereum interoperable blockchains, might just have the solution.
What Is Polygon (MATIC)?
Polygon is an answer to some of the major challenges that face Ethereum today — such as high fees, poor user experience, and low transaction throughput.
The platform aims to create "Ethereum's internet of blockchains" — that is, the multi-chain ecosystem of Ethereum-compatible blockchains. It looks to achieve this by providing a simple-to-use framework that allows developers to each launch their own custom Ethereum-compatible blockchain in a single click.
Polygon envisions a world in which distinct blockchains are able to freely and easily exchange value and information — doing away with the technological and ideological divides that separate most blockchains of today.
The project was originally known as Matic Network, but was later rebranded to Polygon as the scope of the project expanded. While Matic was a simple layer-2 scaling solution for Ethereum, Polygon is the infrastructure for a network of massively scaling, collaborative blockchains that retain their self-sovereignty.
Who is building Polygon?
It is currently being developed by a multi-disciplinary team led by the four co-founders — Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic. Kanani is Polygon's CEO and is an experienced developer that has a penchant for scaling mechanisms, whereas the rest of the team brings a wealth of experience building, managing and growing tech firms.
How Does Polygon Work?
Polygon provides a wide variety of modules developers can use to easily deploy and configure their own custom blockchain. These include consensus and governance modules, as well as a variety of execution environments and virtual machine implementations.
Blockchains launched in this way are configured to benefit from the Matic proof-of-stake (PoS) sidechain, which uses a network of validators to dramatically speed up transactions and cut fees down to a minimum — while finalizing everything on the Ethereum mainchain.
Polygon supports two types of chains: stand-alone chains and secured chains. Briefly, stand-alone chains are self-sovereign blockchains that are directly compatible with Ethereum, whereas secured chains simply bootstrap their security by leveraging a network of professional validators.
At first, all Polygon ecosystem stand-alone chains will be Matic PoS chains, but other side chains and enterprise chains will be supported with a later update.
The platform is designed to support a wide variety of different blockchain scaling mechanisms, including Matic Plasma, zk Rollups, Optimistic Rollups, and Validum Chains — all of which are designed to multiply the transaction throughput of associated blockchains without compromising on security or user experience.
As of writing, Polygon only supports the Matic Plasma scaling solution (an example of more viable plasma). This essentially works by offloading transactions from the Ethereum main chain onto Polygon's Matic PoS chain, before finalizing everything on the mainchain. In the coming months and years, Polygon will add support for various alternate scaling solutions to provide developers with the freedom to choose the one that best fits their needs.
Despite the rebrand, the native utility token of the Polygon network is still known as MATIC. This is largely used for paying gas fees and participating in governance, and can also be used throughout the rapidly expanding Polygon DeFi ecosystem.
What Makes Polygon Unique?
Polygon dramatically expands on the vision and scope of the original Matic Network project by providing developers with a suite of tools they can use to create ultra-scaling and high-performance blockchains and decentralized applications (DApps).
It is unique in the market, in that it's the only scalability solution that supports the Ethereum Virtual Machine (EVM) and enables connected chains to retain self-sovereign security, while also ensuring interoperability between both one another and the Ethereum mainchain.
Unlike some other platforms, chains in the Polygon ecosystem system are not forced to leverage its security as a service layer, but can still pass messages between one another thanks to arbitrary message passing capabilities. This ensures developers can build truly interoperable decentralized applications that can leverage the unique properties of multiple chains at scale.
Since building on Polygon is very similar to building on Ethereum, the platform is immediately accessible to the biggest blockchain development community in the world — who are now able to build highly scalable applications that can fully benefit from Ethereum’s network effects without giving anything up.
As we previously touched on, Polygon is also unusual in that it features support for a variety of different scaling mechanisms, which projects can implement at their discretion. This makes it well-positioned should any single scaling solution become dominant in future, or fail to deliver on its purpose.
What Is the Ethereum Scaling Problem?
If you’ve used the Ethereum network during peak times in recent months, then you may have noticed that the transaction fees can range from somewhat tolerable, to almost unbearable.
In April 2021, these fees ranged from an average of $9 to over $30 per transaction — and at times far exceeded these figures. Moreover, the cost of smart contract transactions has reached staggering heights as of late, with the average Uniswap, Curve and Balancer transactions now coming in at well over $100 a pop.
There’s a couple of main reasons behind this. The first is the limited number of transactions that Ethereum network can process simultaneously — this is known as its transaction throughput. According to current estimations, the Ethereum network can only handle around 15 transactions per second (tps) at peak load — but demand for resources typically far outstrips this transaction rate.
The second is that Ethereum needs to achieve global consensus before transactions are finalized. This can take quite some time due to propagation delays on its proof-of-work (PoW) network.
As a result, users have two options. They can either increase the amount of gas they pay (and hence their transaction fee) to ensure their transactions are prioritized by miners and get confirmed quickly, or they can set a low fee and wait until the network is less congestion — running the risk of it potentially running out of gas or taking a long time to finalize.
Scaling solutions tend to work by boosting the number of transactions that can fit into each block by handling some of the transaction logic off the Ethereum mainchain to reduce the size of each transaction, or by bundling a bunch of transfers into a single optimized transaction.
Want to learn more about scaling solutions? Click here to read our two-minute overview on the subject.