What is Polygon (formerly known as Matic), How it works & Why do we need this?
Built by Developers for Developers🚀
Formerly polygon is known as Matic, then its name changed to polygon but their native token is presently known as Matic itself.
Developed in the year 2017 by 3 Indian Developers known as Sandeep Nailwal, Jaynti Kanani, and Anurag Arjun
Polygon is a protocol and a framework for building and connecting Ethereum-compatible blockchain networks. Aggregating scalable solutions on Ethereum supporting a multi-chain Ethereum ecosystem.
Also a Layer 2 scaling solution for Ethereum blockchain (mainly but works with other chains too as discussed below.
Polygon solves pain points associated with Blockchains, like high gas fees and slow speeds, without sacrificing security. This multi-chain system is akin to other ones such as Polkadot, Cosmos, Avalanche, etc.
The native cryptocurrency of the polygon is Matic, the current price of $1.34 on 24 January 2022.
Polygon is Ethereum, with super-cheap gas fees.
Polygon’s high-speed and low-cost infrastructure is the perfect portal in Defi for players, its main focus is to increase the usage of Defi tools and applications, basically, connecting of connecting blockchain together.
Currently, more than 3000+ daps running, 80 big names migrated from ETH mainchain to polygon sidechain.
Problem
Ethereum blockchain faced majorly 3 problems before the discovery of layer 2 solutions, these are:-
- Low throughput — means it can handle only 30 transactions per second.
- Bad Ux — high gas, proof of work consensus.
- No sovereignty — governance dependence, same network, similar throughput, non-customizable tech stack.
Solution
- One-click deployment of preset blockchain networks
- A growing set of modules for developing custom networks
- Interoperability protocol for exchanging arbitrary messages with Ethereum and other blockchain networks
- Modular and optional “security as a service”
- Adaptor modules for enabling interoperability for existing blockchain networks
Features
- Eth compatible — compatible with eth blockchain
- Scalable — more scaleable due to pos consensus mechanism
- Secure — more secure by using ethereum security
- sovereign — dedicated throughput, customization possible
- Interoperable — bridges to external systems
- User Experience — low gas, fast
- Modular — highly customizable, upgradeable
Polygon Architecture
Out of the above 4 mentioned layers above 2 layers are mandatory, and the below 2 are optional for running polygon blockchain properly.
Tokenomics
Market cap — 13B$
Total supply — 10B$
In circulation, till 24 Jan 2022 is 7.45B
3.8% out of total token supply sold initially in the private launch 2017.
19% sold during initial exchange offering
16% held by development team
4% hold by advisors
12% for staking rewards
23.33% for polygon ecosystem
21.88% for polygon foundation
Matic tokens are practically inflationary since Matic tokens have limited supply, so it implemented their version of EIP1559 in which base transaction fees burned, which led Matic to a deflationary token.
Now, the question that arises is, how will we go to reward stakers when the funds to pay them to run out?
Ans — Extra transaction fees that users add to prioritize their transactions will be enough to incentivize the staking validators.
After reading this blog a user can get to know about polygon, their tokenomics, how it helps in scaling other blockchains, architecture and its working
Thankyou for reading my blog, my Twitter handle is @himanstwt
