Smart Contracts on Blockchain
We live in a world where the word "smart" gives just one common meaning and…
There is already much information out here about Ethereum. You will remember that Ethereum is the native blockchain for ether which is among the fastest rising crypto around today. Today, fin-techies involved in Ethereum ecosystem are working around the clock to perfect the crypto, probably in ambitious efforts aimed at overstepping the pioneer, Bitcoin. Polygon, previously MATIC is one technology which Ethereum continues to explore more territories.
Initially known as MATIC, Polygon aims at scaling Ethereum. It enables the developers to develop scalable user-friendly Apps with low transaction fees. However, it does not interfere with security. It is a great network because even Instagram launched its NFTs on Polygon. The network is also focused on fostering Web3 applications growth by offering the necessary infrastructure.
In verifying transactions, Polygon uses Proof of Stake. PoS works by employing validators in locking their tokens in the chain. Through this, they earn rewards when they verify transactions. Besides, the chain may use locked tokens as collateral and even punish the traders who fail to properly validate transactions. Transactions have to be verified before being in the Ethereum blockchain. The strategy gives polygon the opportunity to separate from Ethereum while it reaps benefits from the chain.
Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun founded Polygon in 2017. In starting up, they got funds from family and friends in Mumbai. Even though Polygon has its roots in India, it has attracted investors globally. In 2019, the platform raised over $450,000 in two rounds of starting up. Moreover, Matic is Polygon’s cryptocurrency. It is used in staking, governance, and paying fees in the network.
In understanding the way Polygon works, it is important to know about its four-layer architecture. They include the Ethereum layer, Security layer, Polygon architecture networks layer, and execution layer from the first to the last. Each layer plays an important role in the network.
The first layer which is the Ethereum layer is in charge of communication with different Polygon chains. Besides, it is responsible for the staking process as well as transaction finality. The second layer is the security layer. It oversees providing validators as a service besides the Ethereum layer. Additionally, it also acts as an additional security layer.
The third layer is the network layer. It oversees collating transactions, local consensus, and block production. Besides, the layer consists of different independent blockchain networks. The networks are for the community and user base. The execution layer is the last layer. It handles the execution and interpretation of transactions in the Polygon network. The layer further consists of two layers including execution logic and execution environment. The execution logic is written for Polygon network’s Ethereum smart contracts. On the other hand, the execution environment is a virtual plug-in-play machine implementation.
Most of the popular crypto trading platforms offer tokens. To Buy or sell Polygon, you have to open an account with the platforms. It is simple and takes about 5 to 10 minutes. You just have to sign up using your email or phone number and a password. Besides, you will be asked to enter some of the basic information such as an address. After verification, you can commence trading.
The developers release the Polygon tokens on a monthly basis. According to CoinMarketCap, there is a total supply of 10,000,00,000 tokens and 8 billion are in circulation. Since January Mainnet’s upgrade, about 650,000 coins have been burned.
Investors are attracted to Polygon because of its varied use. However, you have to remember that before you invest in Polygon tokens, you need to understand cryptocurrency. Polygon also has a user-friendly interface.
Some people consider MATIC a good investment while others do not. For example, the cryptocurrency-enthusiast billionaire, Mark Cuban invested in Polygon. I consider it a good investment as it has the potential to grow. The main reason why Polygon was developed was to improve and scale the infrastructure of Ethereum.
Polygon highly aims at simplifying and speeding up the Ethereum-based transactions. Polygon is almost similar to an express train. Although this train travel on the same track it moves faster and makes fewer stops. Furthermore, as compared to the other cryptocurrencies, Polygon is doing well during this crypto winter. For instance, it is hiring. Currently, companies such as BlockFi and Coinbase are laying off staff. Therefore, I believe it is a good place for any investor.
Currently, Polygon can achieve 7,200 transactions per second (TPS). This makes it highly scalable as compared to Ethereum which processes 15 TPS. The development is good as it influences the prices of a coin in the Matic network.
The popularity of Non-Fungible Tokens (NFTs) has played an important role in Matic’s overall growth. For example, in 2021, NFTs had an explosion of use including NFTs in the gaming and fashion industry. For NFTs to exist, they have to be minted.
It is cheaper to mint NFTs on Polygon as compared to Ethereum. This is due to a more efficient blockchain network as well as cheaper transactions. In short, it is cheap to buy or sell in the Polygon network. In return, more people will mint NFTs in the Polygon network.
Currently, in the Polygon networks, there are over 700 dApps. This includes some of the top Decentralized Finance (DeFi) Projects that have over 450,000 users. The number of dApps that the platform performs will make the platform relevant for a long period. Some of the projects include ApeSwap, Crazy Defense Heroes, and Sunflower Farmers. Besides, there has been the development of Polygon games.
Because of Polygon’s utility and efficiency, we expect it to conduct global partnerships in the future. There is a high possibility of this happening as MATIC offers high scalability and flexibility. One of the partnerships it has successfully conducted in the past is Zipmex. Therefore, more partnerships will follow in the future.
In the first quarter of 2022, Polygon raised about $450 million from 40 VC firms. They include SoftBank Vision Fund 2 and Sequoia Capital India in scaling fund Web3 development, Ethereum, and Web 3 applications. It has also proven to be the largest funding and this has grown investor confidence.
The first limitation is Polygon’s attachment to Ethereum. Even though the network is competing with the other cryptocurrencies, it is also competing with Ethereum. Funnily, it is competing with something that it depends on.
Furthermore, the Polygon developers believe that the network will still remain relevant even with the Ethereum Merge. The merge is expected to take place in September 2022. The developers believe that it will remain relevant as Polygon provide speedier transactions. Also, it allows Ethereum to communicate with other networks.