What Is Polygon Blockchain (MATIC)? How Does It Work?
Dubbed “Ethereum’s internet of blockchains,” – Polygon (MATIC) bills itself as the solution to many chunkier facets of the Ethereum cryptocurrency. Polygon has regularly featured among the top 15 cryptocurrencies (market capitalization-wise) launched in 2017. With so much noise about the project, knowing what is Polygon blockchain (MATIC) and how it works is imperative.
Formerly known as Matic Network, Polygon supports more than 7,000 dApps (decentralized applications. The platform works in collaboration with the Ethereum blockchain and its related projects.
Polygon has vastly improved Ethereum’s performance by offering scalability, sovereignty and transaction flexibility. In addition, Polygon has its ERC-20 called MATIC, which governs the Polygon ecosystem and is used for payments across the network.
So, let us further explore – what is Polygon blockchain (MATIC).
Firstly, Polygon uses a proof-of-stake consensus mechanism to approve transactions on the network. Such a mechanism requires users to stake their tokens – agree not to trade or sell – their native coins, in this case, Matic, in exchange for the right to validate new transactions.
One of the major dilemmas that blockchain developers encounter is balancing trade-offs between scalability, security and decentralization, commonly known as the “blockchain trilemma.”
Another way of understanding Polygon is to compare it with layer 1 blockchains like Ethereum. Since Ethereum primarily focuses on security and decentralization, scalability somewhat ignored, and transactions get expensive. Polygon comes in here to solve this problem.
In short, layer 1 blockchain offers developers a platform to develop and run dApps, NFT, smart contracts and many more. In contrast, layer 2 blockchains like Polygon focus on providing fast transaction speed at lower prices.
However, Polygon is an extension or does not perform duplicate actions on behalf of Ethereum. Instead, it only supports transaction speed across cryptocurrency exchanges. It is evident that Ethereum processes 14 transactions per second, while Polygon processes a staggering 7,000 TPS.
In short, Polygon can perform the following.
- Develop custom blockchains
- Enable communication between Ethereum and other blockchains
- Support existing blockchain to become compatible with Ethereum
Pros and Cons of Polygon
You must wonder whether Polygon is a good project, especially if you plan to invest in MATIC. Here are the key strengths and weaknesses of the Polygon, which is another angle of understating what is Polygon blockchain (MATIC).
- Fast Transaction Speed
By using a consensus mechanism, Polygon offers a way faster per second transaction speed than Ethereum. Polygon’s average block processing speed is 2.1 seconds, which is better than the industry standard.
- Low Fee
With a transaction fee as low as $0.01, you would not like to look beyond Polygon.
- Limited use
Polygon’s native coin, MATIC, has very limited usage; unlike other digital currencies, it is generally not used for purchases.
- Non-autonomous blockchain
Since Polygon is a layer 2 blockchain that works atop Ethereum, thus in case Ethereum loses value, Polygon will also go down in value.
The Future Of Polygon
With all its volatility, cryptocurrency enthusiasts remain positive about the future of crypto projects, including second-layer blockchains like Polygon, Cosmos (ATOM) and Solana (SOL).
However, Polygon has had its share of setbacks, including losing over 800,000 MATIC to a hacking incident in 2021. So, one should consider all aspects of a crypto project before investment.
On the contrary, the developers strive to make Polygon a success as they have launched Polygon Studios, a subsidiary focusing on NFTs and blockchain gaming. If the project is successful, Polygon expects to become the giant in providing technology for NFTs and dApps.
With a long-term project in sight, Polygon hired YouTube’s head of gaming, Mr. Ryan Watts.
Based on the above facts, we can say that Polygon is committed to the long-term project and are on the right path to make Polygon the next big hit in the crypto space. However, only time will tell; for now, MATIC is not a go-to coin for crypto investors.
What Is MATIC?
MATIC is Polygon’s native token. The token always created on Ethereum’s ERC-20 blockchain. The token is used to make payments across the Polygon network and support governing and security of the platform.
Unlike few other cryptocurrencies, MATIC has a limited supply, with about $7.4 billion in circulation, while the maximum supply limit is set at 10 billion.
Moreover, since Polygon works on a proof-of-stake mechanism, thus users can start earning interest by staking just 1 MATIC. The staking reward on the platform ranges between 1% to 10%.
MATIC is available for trade with leading cryptocurrency exchanges, including Coinbase and Kraken.
Frequently Asked Questions
How much is MATIC coin worthy?
The average price of MATIC price is less than 5 cents. While the maximum value of one MATIC reached $5, it traded at a price of $2.2 on 11th March 2023.
How many Polygon coins (MATIC) are there in the market?
Since MATIC has a limited supply, thus its supply bar is set at 10 billion tokens. At the same time, most coins already issued for circulation – around 8.73 billion.
How can I buy MATIC?
The easiest way to purchase MATIC is from a reputed cryptocurrency exchange like Kraken or Coinbase. Moreover, you will need a digital wallet to hold your MATIC coins.
What is Polygon blockchain used for?
Polygon is a layer 2 blockchain that helps Ethereum improve its efficiency by supporting fast-speed transactions at low cost. Thus it enhances the layer 1 blockchain’s scalability.
That is all about what is Polygon blockchain (MATIC) is. It is one of the best layer 2 blockchains supporting layer 1 blockchains like Ethereum to perform better by improving scalability.
Moreover, Polygon network has launched its native coin named MATIC. Although the coin is limited to network payment, users can buy it from Coinbase.
Keeping in mind the long-term scalability of the blockchain, developers of the Polygon blockchain have started venturing into blockchain games. To push forward, they have hired YouTube’s gaming head to explore the booming gaming space in the cryptocurrency space.
As for the future of Polygon, since developers are keen to take the project forward, we can tip to stay relevant and even boast in value if they succeed in launching a gaming portal.
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