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Last week I reshared my article about the Merge in Ethereum, and why there is so much excitement around it. While it won’t really solve its famous scalability issues, it does put them on the right track to do so.
In the meantime, the Ethereum community is counting on the multiple Layer 2 scaling solutions that offer fast and affordable alternatives.
If you missed out on our deep dive on Layer 2s, here are some good reads for you:
Out of all these solutions, Polygon is definitely the largest one and has grown exponentially.
Polygon’s goal is to become the platform that aggregates and facilitates interoperability for all Ethereum’s scalability solutions.
Key Facts about Polygon
Polygon was founded in 2017 by 3 Indian Developers: Jaynti Kanani, Sandeep Nailwal, Anurag Arjun.
It is built by Polygon Technology, a software company based in India, and its development is coordinated by the Polygon Foundation.
Polygon raised around $5.5M across 3 ICOs in 2019 via Binance’s launchpad, and raised an additional $450M from various VCs in a token sale earlier in 2022.
Its mainnet went live in June 2020, which runs on a Proof of Stake consensus mechanism, and is of course EVM compatible (Ethereum Virtual Machine).
MATIC is its native asset:
It has a total supply of 10 billion, with over 8 billion already in circulation.
In terms of utility, t is used for staking, as well as paying transaction fees on its network.
It was originally called Matic Network, but in beginning 2021 it decided to expand its scope to build a more generalized scaling solution and rebranded itself to Polygon.
At the same time, a fourth cofounder was added to the team: Mihailo Bjelic.
Before and After 2021 - What changed?
Before 2021, Polygon was building its own Layer 2 Solution, which consisted of a hybrid Plasma + Proof of Stake (PoS) solution.
After 2021, Polygon decided to expand its scope and aims to become the Ethereum scaling platform
, offering an ecosystem of scaling alternatives that can suit various diverse kinds of needs for different types of projects and applications
.
In this context, Polygon’s original mainnet is known today as the Polygon PoS chain and it’s just one of the scaling solutions that it offers.
How does Polygon PoS work?
With Polygon’s rebranding, its original mainnet is known now as the PoS Chain, and technically it is a hybrid Plasma + Proof of Stake (PoS) solution.
The hybrid nature comes from the combination of 2 different Layer 2 Scaling Solution, and the key difference between these 2 is that Plasma Chains leverages the Layer 1 blockchain’s security, in this case Ethereum, and therefore is more secure, but slower. In comparison, the PoS chain is a Sidechain for Ethereum and has an independent consensus model as well as security, which means it’s faster and more affordable, but more centralized.
So what Polygon is doing here is essentially layering up these 2 solutions in order to get the best of both worlds.
Let’s unpack these 3 layers you can see in the graph:
Ethereum Mainnet: This is where certain key smart contracts are handled, including staking management, delegation management, and specific checkpoints of sidechains.
The Public Plasma Checkpoint refers to the PoS Validator Layer, aka “Heimdall”. This layer works together with the Staking contracts on Ethereum to enable the PoS mechanism on Polygon.
It handles block validation, blocks producer committee selection, checkpointing a representation of the sidechain blocks to Ethereum, etc.Lastly, it’s the MATIC Side Chain which is executed by the Block Producer Layer, aka “Bor”.
Polygon claims that with Bor it can reach a speed of 7,000 transactions per second, which is comparable to what VISA can process.
The reason it can reach this speed is thanks to the centralization of its sidechain, where its only run by 7 to 10 block producers selected from the 100 validators from the Heimdall Layer (which is still very centralized).
What other solutions are available in Polygon?
As mentioned earlier, oost 2021, Polygon PoS is just one of the scaling solutions its offering.
It is building an ecosystem of alternatives that can help all kinds of developers and applications. Two of these solutions are currently live are:
Polygon Edge: a modular framework for building private or public Ethereum-compatible blockchain networks. This makes it sound very similar to Cosmos SDK and also Polkadots toolkit.
For more details, click here.Polygon Nightfall (under beta testing): it’s a privacy-focused solution mainly focused on Enterprises. As a scaling solution, it is an Optimistic Rollup with Zero-Knowledge, which means it reduces transaction fees and increases privacy at the same time. For more details, click here.
Apart from these, there are some others in development, such as the revolutionary Polygon zkEVM (planned to launch early next year), Polygon Avail, Polygon Miden, and Polygon Zero.
Polygon has had some serious adoption
There are too many examples for me to name them all, but just to give you an idea, here are a few relevant ones:
It hit 19,000 Decentralized Apps milestone, which represents a sixfold growth in half a year.
Uniswap, the number 1 Ethereum application, officially integrated with Polygon
ApeCoin also chose to integrate with Polygon.
Meta’s Instagram and Facebook are to support NFTs from blockchains, Polygon being one of them alongside Ethereum, Solana and Flow.
Reddit announced it will launch NFT avatars built on Polygon.
CME added pricing data for Polygon among other cryptocurrencies, and this is relevant because the CME is used for futures trading by institutions.
For more updates on Polygon’s adoption, make sure to subscribe as every end of month I’ll be sharing the relevant news with you!
But what are some of the concerns?
Polygon’s adoption is great, and continues to bring outstanding development to the crypto world.
But as usual, I like to point out some of the concerns there might be:
Transparency: it seems that there is no clear information about the Polygon Foundation, and unlike other founding teams, there is no clear wallet information of Polygon’s founders so there is not much information around how much of MATIC do they hold.
MATIC maximum supply: Polygon already has 8 billion circulating supply out of 10 billion totaly supply. This aggressive token sale raises the question of what happens when the maximum supply is hit, and there are no more attractive staking rewards for the validators.
Battle tested? since the launch of its mainnet, this is Polygon’s first cycle, so we are yet to see how they perform under pressure and more intense competition with the likes of Arbitrum, Optimism, etc.
Regulations: given that Polygon is based out of India, and the Indian government is heavily opposed to crypto to the point of banning it, this does raise concern around what kind of issues Polygon might face along the way of regulations.
Thanks for making it this far! Here is my Articles Pipeline for the next few weeks:
Project deep dive: Vechain
What is Technical Analysis
Crypto News - August Edition
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