Summary
- Polygon is a network built on the Ethereum blockchain designed to improve transaction speeds and transaction throughput and reduce fees.
- Polygon’s network architecture includes the Ethereum Layer, Heimdall Layer (Validation Layer), and Bor Layer (Sidechain operator).
- Polygon’s native currency, Matic, is primarily used for gas fees, network security, and governance.
- Polygon has formed strategic partnerships with high-profile names like Starbucks, Adidas, and the NFL to utilize its technology and develop an NFT presence.
What is Polygon?
Formerly known as the Matic Network, Polygon is a scaling solution that addresses Ethereum’s scalability issues. Due to the Ethereum blockchain’s architecture, it has limitations on transaction speeds and throughput. As transaction demand increases, the network gets congested, causing transaction fees to increase. Polygon aims to solve Ethereum’s challenges by bringing this computation off-chain using sidechains and a decentralized network of Proof-of-Stake (PoS) validators. This method significantly reduces the network load on Ethereum, thereby increasing transaction speed and lowering transaction costs.
Polygon’s ideology aims to improve the user experience and create an interoperable ecosystem. The Polygon network aims to achieve this by facilitating seamless digital asset transfers between Ethereum-compatible blockchains and supporting third-party applications. Polygon is Ethereum Virtual Machine (EVM) compatible, supports all existing Ethereum tooling and enables blockchain customizability, extensibility, and upgradability.
What are Virtual Machines?
Blockchain virtual machines (VM) are virtual computers that execute smart contracts. Various blockchains might have similar, compatible, or unique VMs where the execution environment is designed for specific programming languages.
For example, an iPhone application might not be available on Android. This is because they have different operating systems, requiring different execution environments and programming languages.
How does Polygon Work?
Polygon’s network architecture incorporates three layers to achieve fast transaction processing times and reduced transaction fees. The following layers ensure a high degree of security and decentralization:
Ethereum Layer – Polygon can maximize the network’s security by utilizing Ethereum, one of the market’s most secured blockchains. This layer is critical in executing fundamental tasks such as checkpointing, staking, dispute resolving, and message relaying.
Heimdall Layer – is a PoS validation layer in the Polygon network where users stake Matic tokens to become a Validator. Its primary function is to aggregate blocks produced by the Bor layer into a Merkle tree and periodically publish the Merkle root to Ethereum. This process, known as checkpointing, provides snapshots of the Bor sidechain to the root chain.
Heimdall is the backbone of the Polygon network consisting of PoS nodes that monitor smart contracts executed onto it. Heimdall’s architecture randomly selects block producers to verify transactions from a pool of PoS validators in the Matic network.
Bor Layer – also known as the Block Producer layer, operates as the sidechain. The Bor implementation serves as the sidechain operator, managing and facilitating transactions on this separate blockchain. This EVM-compatible layer allows the network to benefit from Ethereum’s functionalities and compatibility.
Bor selects the block producers and transaction verifiers and synchronizes with Heimdall. These block producers are shuffled periodically, selected from the validator set (Heimdall) at regular intervals, and chosen based on their total stake. These intervals are governed by the validators’ rules concerning dynasty and network conditions. The ratio of stake or staking power held by a participant influences their probability of being chosen as a member of the block producer committee.
Network Interoperability
The appeal of Polygon’s design lies in its EVM-compatibility, making it straightforward to plug applications and smart contracts from the Ethereum blockchain to Polygon.
Polygon’s structure is compatible with Ethereum addresses, and any functioning Ethereum wallet address can accept payments on the Polygon network, regardless if it’s not directly connected. However, the recipient must have a Matic Wallet to use these payments on the main blockchain or in the Polygon environment.
Matic Tokens and Their Purpose?
The MATIC token is an ERC-20 standard token minted on the Ethereum blockchain. It serves as Polygon’s native currency, and the primary utility of Matic is transaction fees, incentivizing network participation, and rewarding contributors providing essential services such as validating transactions and securing the network. Users staking MATIC are eligible for rewards denominated in MATIC for demonstrating their commitment to the network’s security, maintenance, and operations.
Examples of Mainstream Usage
Polygon partnered with various industry leaders, from finance to gaming, to transform their digital architecture and brand presence. One of the top-rated solutions gaining traction in the global market is non-fungible tokens (NFTs) marketplaces.
The household name Starbucks launched NFT collectible stamps as part of its rewards program. These stamps can be redeemed by accumulating points from completing tasks through food and beverage purchases. NFT holders with limited edition stamps are promised real-life benefits such as access to private events and international trips. This is one example of the many partnerships spanning domains, such as boosting blockchain-based loyalty programs and facilitating efficient cryptocurrency payments.
