The History of Polygon (MATIC): Solving Blockchain’s Scalability Challenges

The Ethereum blockchain is one of the most established crypto networks today, next to Bitcoin. Ether (ETH), its native token, is also the world’s second-largest cryptocurrency by market capitalization, also next to Bitcoin. The blockchain is more commonly used to create new crypto, decentralized applications or dApps, and non-fungible tokens or NFTs. Through Ethereum, developers and users can easily write smart contracts. These agreements are written in code specific to the blockchain platform.

However, one limitation to the Ethereum blockchain network is that it can’t keep up with the volume of activity. It only has a speed of 25 transactions per second, which is really slow as the network now has millions of active daily users. For reference, the Solana blockchain can process 50,000 transactions per second. Transacting on Ethereum also means high gas fees, which continues to rise as more people use the network. These factors are what hinder the network’s scalability, and this is where Polygon becomes the game-changer in the blockchain space. .

We will discuss in this article how the network started, its principles, and investing in it.

What is Polygon (MATIC)?

Polygon (MATIC) or Polygon is a platform designed to support infrastructure development and help Ethereum scale. It is a type of Layer 2 solution allowing other blockchains to scale apps through off-chain processing of transactions. During the entire process, they remain connected to the main chain though. Being fLayer 2 solution, it does not require to have its own primary blockchain to function as it works on top of Ethereum’s network.

Polygon is a complete multi-chain system that utilizes side chains to divert traffic and user transactions from the leading network, freeing up computing power in a smart and efficient method. It also provides infrastructure for facilitating blockchain networks that communicate with one another. Although all of this communication happens outside the main Ethereum network, the operation retains the security and liquidity of the underlying blockchain, making it interoperable and immutable. This flexibility speeds up processing times and effectively reduces gas fees.

How did it all start?

Polygon first launched as Matic Network in 2017 by co-founders Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. Their goal for the project was to address blockchain’s scaling and usability issues as traditional blockchains face high latency and transaction costs that can hamper their progress towards adoption, technological efficiency, and user experience. The solution they found was to use Layer 2 or external networks to act as load balances for networks that can’t scale up as user activity increases.

In 2017, Jaynti Kanani, who was a data scientist working at Housing.com during that time, saw a “weak link” in the Ethereum blockchain. At that time, CryptoKitties was a hit and NFTs were starting to gain traction. However, the overwhelming activity from the project congested the network. Processing times took so long and the gas fees were ridiculously high that the transactions’ size and volume were limited, causing security and efficiency challenges.

Kanani got in touch with Sandeep Nailwal, a blockchain developer, and Anurag Arjun, a business consultant. The three joined forces and launched Matic in October 2017. Later on, its scope was expanded with more ambitious goals. At the same time, they maintained the original mission, which was scalability within the Ethereum platform.

In the summer of 2020, Matic took a significant step forward when its mainnet was released. The release of Matic network took place at best possible time, as the transaction costs of Ethereum network increased with the DeFi hype of summer 2020. Increased transaction costs showed that there was a real need for a scaling solution like Matic.

Then, in February 2021, the platform underwent rebranding to reflect the new direction. They changed from Matic to Polygon and also decided to keep the MATIC name for its native crypto token.

Polygon’s operating principle

Let’s break down how Polygon works in the simplest way possible.

Think of the Polygon network as a four-layer stack of lego bricks. At the bottom is the Ethereum layer, then next are the security layers, followed by the Polygon networks’ layer, and the execution layer being the topmost layer. Cross-chain transactions are possible as it uses smart contracts.

The connecting technology used is called the Polygon bridge, a two-way trustless channel (no third party involved) between Polygon (the child chain) and Ethereum (the parent chain). The structure is set up so that the Polygon chains can operate independently off-chain without overworking the parent chain, reducing time and cost effectively.

There are two main types of Polygon bridges: the PoS Bridge and the Plasma Bridge.

Polygon Plasma Bridge

The Plasma Bridge uses the Ethereum Plasma scaling solution with an exit mechanism that bolsters security. However, this feature also entails a longer transfer time of up to seven days. Thus, the Plasma Bridge may be more beneficial to developers than users. This technology facilitates the transfer of Matic, ETH, ERC-20 tokens (Ethereum-based), and NFTs.

PoS (Proof-of-Stake) Bridge

Although it doesn’t have the same protection guarantee of the Plasma exit mechanism, The PoS Bridge adopts the PoS consensus mechanism to secure its network. This technology, run by external validators (on top of Ethereum), allows the faster deposit and withdrawal of tokens and NFTs. The robust level of protection from the PoS Bridge can satisfy the requirements of many DApps and integrations. This makes the PoS Bridge ideal for users who can transact within the maximum transfer time of three hours. This technology facilitates the transfer of ETH and most ERC-20 tokens.

Investing in Polygon

Polygon is compatible with several different blockchains, but its primary focus has been on solving the scalability problem of Ethereum. The popularity of Ethereum’s ecosystem also affects Polygon’s success.

With Polygon’s solution, ecosystems can scale better than before. The massive growth in users and applications over various blockchains has shown a real need for a scaling solution like Polygon.

Polygon’s development work is active, and its use is constantly growing. Polygon’s numerous different scaling options make Polygon a very versatile scaling solution. Polygon has been especially popular with Ethereum-based applications. More and more applications built on top of Ethereum have taken advantage of the scaling solutions offered by Polygon to achieve faster and cheaper transactions.

It is possible to invest in Polygon by purchasing Polygon’s token called MATIC. In 2021, the popularity of Polygon’s MATIC token has grown exponentially among investors. Suppose there is a need for the scaling solution offered by Polygon and the popularity of Polygon grows. It will naturally also have a positive effect on the course of the MATIC token.