What is Polygon (prev. MATIC) (POL)?

Deep Dive

1. Core Purpose & Value Proposition

Polygon addresses Ethereum’s scalability limitations by operating as a Layer 2 proof-of-stake chain, reducing transaction costs to $0.01–$0.10 and finality to ~5 seconds (Polygon Portal). Its AggLayer v3.0 (launched July 2025) enables seamless cross-chain liquidity and state sharing, positioning POL as the backbone of a unified multi-chain ecosystem.

2. Technology & Architecture

Polygon combines a PoS sidechain with zero-knowledge proofs via AggLayer, allowing developers to deploy customizable chains (e.g., zkEVM, PoS) that interoperate trustlessly. Validators stake POL to secure the network and earn fees from all connected chains, a shift from MATIC’s single-chain focus.

3. Tokenomics & Ecosystem

POL replaced MATIC in September 2024, with 97.8% migration completed by August 2025. It serves three roles:
- Gas token for all Polygon chains
- Staking asset (up to 15% rewards + ecosystem airdrops)
- Governance tool for protocol upgrades

The network hosts 45,000+ dApps and processes ~60% of all non-USD stablecoin transactions, including Stripe’s $50M+ stablecoin volume (StarPlatinum tweet).

Conclusion

Polygon has evolved from an Ethereum sidechain into a modular ecosystem where POL coordinates security, payments, and cross-chain activity. While technical upgrades like AggLayer strengthen its infrastructure, enterprise adoption in payments (e.g., Shopify, Revolut) and RWAs (e.g., Franklin Templeton) underscores real-world traction. How might Polygon’s focus on institutional use cases reshape its decentralized ethos long-term?