What is Polygon (MATIC)?

Polygon is a Layer 2 solution that aims to scale the Ethereum blockchain by improving its transaction speeds, lowering fees, and providing a better developer experience. 

Unlike most scaling solutions that rely on a single approach, Polygon, originally called “Matic Network,” offers several different scaling solutions and serves a range of use cases, including decentralized finance (DeFi), non-fungible tokens (NFTs), payments and gaming. 

Its primary products include a proof-of-stake (PoS) sidechain, zkEVM L2 chain, and CDK appchain infrastructure.

Polygon leverages smart contracts written in Ethereum’s Solidity programming language to enable the creation of decentralized applications (dApps) and execute complex, autonomous agreements within its suite of products.

Polygon’s native token, MATIC, is classified as an infrastructure token. These projects focus on enhancing the functionality, efficiency and security of blockchains (in this case, Polygon) and their dApps. 

More specifically, MATIC is used to cover network transaction fees associated with Polygon’s products.

Holders can also stake their tokens with validator nodes to earn rewards, as well as transaction fees from the network’s users (denominated in MATIC).

Non-custodial wallets like MetaMask and Phantom offer access to the Polygon network. These crypto wallets allow users to interact with dApps and manage their digital assets. 

Kraken offers MATIC, as well as 250+ other types of cryptocurrencies.

Polygon is a scaling solution designed to improve Ethereum by offering a faster and more cost-effective environment for smart contract execution. 

Polygon’s ecosystem includes:

• Polygon PoS Sidechain: The PoS sidechain operates next to Ethereum and processes data away from the Layer 1 blockchain platform before submitting a cryptographic proof of the data back to the main chain. Polygon’s validators stake MATIC in order to secure the network and earn staking rewards. Individual users can also delegate their MATIC to a validator to earn a portion of rewards and fees.

• Polygon zkEVM: Polygon zkEVM is a zk-rollup Layer 2 network built on top of Ethereum. It offers a cheaper and faster alternative to Ethereum mainnet while also leveraging zero-knowledge proof verification for transactions.

• Polygon CDK: Polygon CDK allows developers to create their own layer 2 solutions in the form of zk-rollups on top of Ethereum mainnet. This enables more customization and higher bandwidth than building a dApp on top of a shared blockchain.

• Polygon Miden: Polygon Miden, which is currently under development, will be another layer 2 scaling solution zk-rollup which enables its users to perform private transactions. Additionally, Miden will offer enhanced throughput via parallel execution, where multiple transactions can be processed concurently

• Customizable Infrastructure: Polygon SDK provides an intuitive development kit for builders in the Polygon ecosystem to help the dApp-building process.

Polygon’s key innovations lie in its vast array of scaling solutions to optimize the Ethereum ecosystem. 

However, Polygon has evolved to expand its offerings to increase the amount of solutions for blockchain developers, such as:

• Avail: A modular blockchain built on a modified version of Polkadot's framework that’s designed to provide scalable data availability and security services to other blockchains.

• Edge: A versatile platform for developers to create custom blockchain networks that are interoperable with Ethereum.

• ID: A privacy-centric identity system for Web3 services that leverages ZK technology to protect user data.

Polygon aims to solve multiple problems with its suite of products.

The Polygon SDK simplifies the development of dApps within the Polygon ecosystem, streamlining the process for developers. 

Meanwhile, Polygon’s zkEVM, CDK, and Miden leverage ZK technology to bring more efficient and secure networks and applications to the Ethereum ecosystem.

Ultimately, Polygon’s overarching goal is to scale Ethereum, and transform it into a faster, cheaper, and more user-friendly platform for decentralized applications and services.

Someone may wish to purchase MATIC for the following reasons:

• Participate in protocol governance: MATIC is used to empower the community to actively participate in the decision-making process of its protocols, ensuring a more democratic and inclusive approach to project management. 

• Stake MATIC: Staking allows MATIC owners to earn potential rewards by actively participating in the validation of transactions. 

• Pay for transaction and gas fees: These fees compensate validators for their work in processing and verifying transactions.

MATIC is Polygon’s native cryptocurrency. Token holders can use it in several ways within the Polygon ecosystem:

• Stake MATIC: Polygon operates on a Delegated PoS consensus mechanism, where token holders can delegate their MATIC tokens to validators of their choice. Validators, who need to stake a minimum of 10,000 MATIC, are responsible for verifying transactions and maintaining the network's security. Importantly, there is an 80 checkpoint unbonding period (approximately 2-3 days) for those who wish to withdraw their staked MATIC. This period ensures network stability and prevents sudden large-scale withdrawals that could disrupt operations.
• As a governance token: Holding MATIC allows token holders to vote on proposals and influence the direction of the network.
• Pay for transaction fees: MATIC can be used to pay transaction fees when interacting with dapps and other services built on the network. Of note, a portion of these fees are burned with an effort to make MATIC a deflationary token. 

Polygon was launched on May 30, 2020 in India by founding members Jaynti Kanani, Sandeep Nailwal, Anurag Arjun and Mihailo Bjelic. 

Polygon is supported by the Polygon Foundation and Polygon Labs, entities dedicated to supporting the research, development, and education around Polygon. 

Key Founders

Jaynti Kanani 

• Title: Co-founder of Polygon

• Professional Background/Qualifications: Jaynti’s interest in crypto began when he discovered Bitcoin, and before co-founding Polygon in 2017, he sought to build apps to facilitate a universal payments network.

• Key Contributions: Jaynti was instrumental in the original technical development of Matic Network, which would later become Polygon.

Sandeep Nailwal 

• Title: Co-founder and COO of Polygon

• Professional Background/Qualifications: Sandeep began his career in software development in 2010, and he founded ScopeWeaver, the largest professional services marketplace in India, in 2015. With ScopeWeaver, he designed a blockchain-based decentralized application architecture, which led to his co-founding Matic Network in 2017.

• Key Contributions: Sandeep was a prominent force in creating awareness around Polygon during its early history and drawing interest of funders. He also invests in the ecosystem via Symbolic Capital, which he co-founded in 2022.

Anurag Arjun 

• Title: Co-founder and Chief Product Officer of Polygon

• Professional Background/Qualifications: Before his career in web3, Arjun had worked in the computer science field since 2006.

• Key Contributions: As Chief Product Officer, Anurag focuses on developing Polygon’s roadmap and partnership integration.

Mihailo Bjelic

• Title: Co-founder of Polygon

• Professional Background/Qualifications: Mihailo had worked over 10 years in IT engineering and had started several technology companies before pursuing web3 full-time in 2017. Originally, he began building Ethereum scaling solutions by himself, but later met Polygon’s founders in the ethresear.ch forum and joined them to create the Polygon network.

• Key Contributions: Using his vast experience studying blockchain scaling solutions, Mihailo is a key contributor to the scalability of Polygon and its related networks.

Polygon began its fundraising with a modest seed round that raised $165,000 in 2018. 

The project garnered further investment through private sales, accumulating a total of roughly $610,000 before conducting an Initial Exchange Offering (IEO) in April 2019. The IEO raised $5 million by selling roughly 190 million MATIC at $0.0263 per token. . 

A few days after the IEO, Coinbase Ventures participated in a seed round and contributed an additional $450,000. 

Polygon continued to attract significant funding, securing $1 million in December 2020 and an undisclosed amount from Mark Cuban in May 2021. The most substantial investment came in February 2022, with a $450 million funding round led by Peak XV Partners.

Polygon’s native cryptocurrency, MATIC token, was released in 2019 as an ERC-20 token on Ethereum with a maximum supply limit of 10,000,000,000 tokens.

The initial supply of 10,000,000,000 MATIC was distributed as follows:

• 23.33% – 2,333,000,000 MATIC – Ecosystem
• 21.86% – 2,186,000,000 MATIC – Polygon Foundation
• 19% – 1,900,000,000 MATIC – Binance Launchpad
• 16% – 1,600,000,000 MATIC – Team
• 12% – 1,200,000,000 MATIC – Staking Rewards
• 4% – 400,000,000 MATIC – Advisors
• 3.8% – 380,000,000 MATIC – Private Investors

Polygon employs a deflationary mechanism to manage its token's supply. As a portion of all transaction fees are burned, the overall MATIC supply gradually decreases over time.

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