TL;DR

Currently, it is natural to assume that multi-chain is quite promising. It is likely that, instead of one blockchain gaining total dominance, there will be multiple interconnected networks, each with unique properties, trust assumptions, performance, and security.

Polygon aims to bring that future closer by offering a framework for creating Ethereum-compatible scaling solutions. Their Proof of Stake sidechain has caught the attention of the Bitcoin and cryptocurrency communities. Let's look deeper.

Introduction

Ethereum's long-awaited scaling plans are finally starting to bear fruit, and the Polygon project is part of those efforts.

You may have heard of Cosmos and their vision of a “blockchain internet” via the Inter-Blockchain Communication Protocol (IBC) which allows messages to move across blockchains that have implemented the protocol.

Polygon's vision is quite similar, but Polygon has adapted this concept specifically for the Ethereum ecosystem. The concept is that developers can easily launch scaling solutions or even separate blockchains compatible with Ethereum.

The project originally started as Matic Network, but was later rebranded to Polygon as its scope expanded from a single Layer 2 (L2) solution to a network of multiple networks.

What is Polygon (MATIC)?

Polygon is a framework for creating blockchain networks and scaling solutions compatible with Ethereum. Polygon is more of a protocol than a single solution. This is why one of the main offerings of this ecosystem is the Polygon SDK, which allows developers to create a network compatible with Ethereum.

However, you may have heard of the Polygon Network, which is a Proof of Stake (PoS) sidechain and one of the first active products in the Polygon ecosystem. Basically, a sidechain is a parallel chain connected to another blockchain.

Sidechains can offer several benefits, especially increased transaction throughput and low fees. If you have used Polygon Netwok, you will know that this sidechain is very fast and cheap compared to Ethereum. However, there are some sacrifices made to achieve this performance. We'll get to that later.

Because Polygon supports the Ethereum Virtual Machine (EVM), existing applications can be ported quite easily. This provides customers with a similar experience to Ethereum, but with the aforementioned high yields and low fees.

However, what can you do as a user on Polygon? Of course, similar things can be done on Ethereum, but much cheaper and faster. Some of the most popular DeFi dapps are already deployed, such as Aave, 1inch, Curve, and Sushi. However, there are also some native apps that don't exist anywhere else, such as QuickSwap and Slingshot.

Polygon's development was led by its founders: Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic.

How does Polygon work?

The Polygon framework supports two main types of Ethereum-compatible networks: secure chains and split chains. An example of a safe chain is a rollup, while an example of a separate chain is a sidechain.

A secure chain relies on the chain infrastructure attached to it, so the chain does not need to adopt its own security model. Instead, separate chains must handle their own security. This means that secure chains tend to offer a higher level of security while split chains offer more flexibility for certain purposes.

Then, what about Polygon Network? The Polygon sidechain is secured by its own set of validators (validator pool), and must send checkpoints to Ethereum from time to time. This is why some people say that sidechains are not a “pure” Layer 2 solution. Sidechains must handle their own security, rather than leveraging Ethereum's security. This can be an important distinction, and we'll explore it in a little more detail when we discuss rollups.

In the future, the Polygon platform aims to support a wider variety of scaling solutions, including zero-knowledge (zk) rollup, optimistic rollup, and Validum chain. Once more scaling solutions are available, developers will have more tools to develop innovative applications, solutions and products. Additionally, they can all be compatible with existing Ethereum tools and wallets, such as MetaMask.

Uses of MATIC tokens

Despite the rebranding, the MATIC token retains its name. This token is used to pay gas fees on the network and participate in governance. If you want to stake MATIC tokens, you can do so on Binance Earn or via the Matic Web Wallet created by the Polygon team.

Polygon Bridge

Polygon Bridge is the easiest way to move your funds from another blockchain network to the Polygon sidechain. Note that you will still have to pay mainnet transaction fees, as transaction bridging occurs on mainnet.

However, you can enjoy the low fees and fast transactions offered by Polygon once the process is complete. Some centralized exchanges (CEX) also offer direct withdrawals to the Polygon Network.

Sidechain vs. rollup

In general, there is no agreement on whether sidechains can be called Layer 2 solutions in the same way as rollups. This distinction is important to understand if you want to dive into the multi-chain field and consider the various tradeoffs.

They all have different trustworthiness, security, performance, and user and developer experience assumptions. As a secure chain, rollup is one of the most promising Layer 2 scaling solutions, as most of its security comes from Ethereum.

However, this does not apply to other solutions such as the Polygon sidechain. That doesn't mean the sidechain is unsafe, but if bad actors want to collude, they can (at least in theory) take over the network. We have not found the slightest indication of this intention, but it is something that needs to be taken into account. Using sidechains requires a trust component, not only related to network validators, but also bridging between the two chains.

Other tradeoffs also need to be considered. When using the ETH mainnet, you will pay higher transaction fees and experience slower transaction times, but you also rely on the strongest security guarantees and the least amount of trust required in any party.

If you use rollups, you'll pay less, have comparable security, and have faster transaction times. When using sidechains, you will pay some of the fees if you use rollups, but there is a trade-off in terms of security.

So, which one is better? There is no simple answer. All of them can be good choices for certain uses and complement each other in a way that completes a very useful ecosystem.

For example, a social media reputation system requires very high transaction throughput at very low costs, but may not require the highest security guarantees because it is not a critical part of the infrastructure. In this case, sacrificing security may be worth the performance gain.

On the other hand, storing national treasuries on a blockchain requires the highest security and the high costs are commensurate with this, especially if super-fast transactions are not required.

Developers and project teams are constantly experimenting and investigating how each element can fit into the big picture. Scalability needs to be thought about, as there may be scaling solutions for different uses in different industries.

Closing

Polygon is a framework for creating Ethereum-compatible blockchain scaling solutions. Polygon Network is a Proof of Stake (PoS) sidechain that is being widely adopted due to its fast and low-cost transactions, as well as EVM compatibility.

Polygon aims to offer more scalability solutions in the future, including zk rollup, optimistic rollup, and separate blockchains that will help create a more vibrant and interconnected Layer 2 ecosystem for Ethereum.