What is Polygon? (MATIC)
The Beginner’s Guide to Polygon MATIC
Polygon, formerly known as the Matic Network, is a scaling solution that aims to provide multiple tools to improve the speed and reduce the cost and complexities of transactions on blockchain networks.
At the center of Polygon’s vision is Ethereum, a platform that is home to a range of decentralized applications, ones where you can join virtual worlds, play games, buy art, and participate in a range of financial services. However, this much activity on its blockchain has rendered Ethereum almost unusable, as the cost of transmission is rising and traffic is becoming clogged.
Enter Polygon. In a nutshell, Polygon bills itself as a layer-2 network, meaning it acts as an add-on layer to Ethereum that does not seek to change the original blockchain layer. Like its geometric namesake, Polygon has many sides, shapes, and uses and promises a simpler framework for building interconnected networks.
Polygon wants to help Ethereum expand in size, security, efficiency, and usefulness and seeks to spur developers to bring enticing products to market all the quicker.
After the rebranding, Polygon retained its MATIC cryptocurrency, the digital coin underpinning the network. MATIC is used as the unit of payment and settlement between participants who interact within the network.
Who Created Polygon?
Polygon was created in India in 2017 and was originally called the Matic Network. It was the brainchild of experienced Ethereum developers—Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, as well as Mihailo Bjelic.
The Matic Network went live in 2020 and has attracted some of the top names in the world of decentralized finance, also known as DeFi, including Decentraland and MakerDAO. The Matic Network rebranded to Polygon in February 2021.
In its April 2019 initial offering, the Polygon team raised the equivalent of $5.6 million in ETH with the sale of 1.9 billion MATIC tokens over a brisk 20-day period.
How Does Polygon Work?
Polygon is a multi-level platform with the aim to scale Ethereum thanks to a plethora of sidechains, all of which aims to unclog with the main platform in an effective and cost efficient manner.
If you’re unfamiliar, sidechains are unique blockchains that are bound to the main Ethereum blockchain and are effective in supporting many Decentralized Finance (DeFi) protocols available in Ethereum.
At the core of the network is the Polygon software development kit (SDK), used to build Ethereum-compatible decentralized applications as sidechains and connect them to its main blockchain.
Sidechains can be built using one of the following construction scalability methods:
- Plasma Chains – Bundles transactions into blocks, batched into a single submission on the Ethereum blockchain
- zk-Rollups – Allows multiple transfers to be bundled into a single transaction
- Optimistic Rollups – Similar to Plasma Chains, but with the capability of also scaling Ethereum smart contracts
Polygon’s main chain is a Proof of Stake (PoS) sidechain in which network participants can stake MATIC tokens to validate transactions and vote on network upgrades.
Why Does MATIC Have Value?
MATIC is the native cryptocurrency of the Polygon network and is used to help drive development across the network and can be used for staking and paying for transaction fees.
Users can earn MATIC tokens by providing computational resources and services to the Polygon network. This can be done by validating transactions or for executing smart contracts on the network.
Additionally, by owning and staking MATIC, users gain the ability to vote on network upgrades, with each vote being proportional to the amount of MATIC cryptocurrency they stake.
Like many other cryptocurrencies, the supply of MATIC tokens is limited, meaning that according to the software’s rules, there will only ever be 10 billion MATIC coins in circulation.
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Why Use MATIC?
Proponents of the Polygon Network may be drawn to its ability to provide scaling solutions to Ethereum, and developers can leverage Polygon’s technology to build more user-friendly dapps on its blockchain.
Examples of dapps that are built on Polygon include Sushi, a decentralized exchange platform, Augur, a prediction market platform and Ocean Protocol, a platform that allows businesses and individuals to exchange and monetize data and data-based services
Investors may also seek to buy MATIC and add it to their portfolio should they believe in Layer-2 solutions for improving the Ethereum Network.
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