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Polygon (MATIC): A Top Layer-2 Ethereum Scaling Solution

How Polygon (MATIC) Became a Leader in Layer-2 Ethereum Scaling Development -100

Summary

As a variety of projects compete to be the most effective Layer-2 scaling solution for the Ethereum blockchain, the Polygon crypto project (formerly Matic Network) has seen a great deal of early success. With over 350 decentralized applications (dApps) using Polygon as of July 2021, Polygon is quickly establishing itself as one of Ethereum’s premier Layer-2 scaling solutions. What began as a hopeful vision for the implementation of scaling infrastructure has now taken the crypto ecosystem by storm as hundreds of dApps have rushed to deploy iterations on Polygon in order to benefit from its increased throughput and decreased costs.

  1. The Rise of Layer-2 Scaling Solutions

  2. Polygon Crypto Technology and Platform Growth

  3. Polygon’s Most Prominent Use Cases and Partnerships

  4. New Technology Implementations

  5. Future of the Polygon Crypto Network

  1. The Rise of Layer-2 Scaling Solutions

  2. In order to compete with legacy systems of payment processing, lending, and application hosting, blockchain networks must become highly scalable. That means being capable of accommodating an exponentially growing number of users, transactions, and other data. However, when achieving scalability, it is imperative for a blockchain network not to sacrifice decentralization and security in the process. This challenge has come to be known as the blockchain trilemma, and many new strategies have arisen to try to achieve a sufficient balance of scalability, decentralization, and security in tandem.

    Layer-2 solutions represent a methodology of increasing the throughput of base layer, or Layer-1, blockchains by abstracting some of the computational burden away from the main chain to take place tangentially in other blockchain environments that can offer additional advantages such as increased speed or lower operation costs. Most Layer-2 scaling solutions are targeted at alleviating network congestion on Ethereum, which is home to the majority of decentralized applications (dApps) in the blockchain ecosystem today. Though Layer-2 scaling solutions can come in all shapes and sizes and take different approaches to achieving similar goals, they are generally defined as third-party protocols that integrate with an underlying Layer-1 blockchain to increase its transactional throughput.

    The Ethereum network experienced its highest ever recorded network traffic and transaction volume in the beginning of 2021. The same period signalled a new growth phase for competing Layer-2 scaling projects as each vied to be the first to effectively provide a viable scaling solution for the massive blockchain network. This ignited what is sometimes colloquially referred to as “the scaling wars.” 

  3. Polygon Crypto Technology and Platform Growth

  4. In the first half of 2021, the Polygon crypto platform (formerly Matic Network) solidified itself as the one of the premier Layer-2 scaling solutions for Ethereum, and proved to be effective at increasing the speed and usability of Ethereum, while simultaneously decreasing the costs associated with using the network. Polygon has gained traction in large part due to the underlying technical architecture of its Proof-of-Stake (PoS) Commit Chain and its More Viable Plasma (MoreVP) scaling solution. The Commit Chain system of Polygon’s PoS blockchain serves as a connector to the Ethereum main chain, attracting hundreds of Ethereum dApps to its platform through its potential to decrease instances of the network congestion common to Ethereum and other Proof-of-Work (PoW) blockchains.

    Here’s how it works: Polygon Commit Chains bundle together batches of transactions and confirm them en masse before returning data to the main chain. Theoretically, Polygon will eventually have thousands of chains scaling together to increase throughput, with the potential to one day generate millions of transactions per second (TPS) when attached to a main chain like Ethereum.

    As of July 2021, Polygon had facilitated approximately 350 million transactions (with roughly roughly seven million transactions per day), supported over 600,000 wallet addresses, and integrated with over 350 dApps using the Polygon crypto network. Part of Polygon’s growth is due to its cost- and time-saving potential: In many cases it can cut costs for dApp developers and provide faster settlement times with much less network congestion than would be the case in building on the Ethereum network directly. The platform has received some fairly significant crypto-media coverage emphasizing Polygon’s speed, effectiveness, and exponential user-base growth. 

  5. Polygon’s Most Prominent Use Cases and Partnerships

  6. Polygon has experienced significant growth thanks to some very utilitarian use cases. For instance, Polygon has enabled a wide variety of dApps to speed up their payment processing and achieve near-instantaneous settlement times. Increased rates of payment processing have allowed dApps, merchants, and users to easily transact with cryptocurrency. Polygon has also established a partnership with Dharma Protocol to allow merchants to analyze the credit ratings of platform users based on their transaction history. 

    Through a partnership between Polygon and the lending platform Aave, the latter has achieved about $20 billion total value locked (TVL), with over one-third of that amount coming from its deployment on Polygon. In mere months, the Polygon-deployed version of Aave skyrocketed from about $1 billion in locked liquidity to more than $7 billion locked as of July 2021.

    Polygon has also engaged in partnerships and integrations with numerous DeFi dApps, including:

    These protocols — and many more — benefit from reduced costs and increased functional efficiency on the Polygon crypto network. Polygon has also enhanced the speed and decreased the costs associated with blockchain-based gaming and non-fungible tokens (NFTs). Gaming and NFT dApps and platforms like Atari, OpenSea, Decentraland, Terra Virtua, Aavegotchi, Cometh, and NiftyKit have scaled their user experiences with Polygon.

  7. New Technology Implementations

  8. Although Polygon has been busy building Layer-2 scaling infrastructure for Ethereum, the project plans to eventually develop its scalability-focused product offering to support other blockchains, and to provide cross-chain interoperability between different protocols. Polygon also plans to eventually provide additional functionality beyond its Commit Chain connectivity, with the integration of other scaling mechanisms like optimistic rollups. 

    In May 2021, Polygon also announced the launch of a software development kit (SDK) that will enable developers to deploy their own Ethereum-connected standalone blockchains and Layer-2 protocols. Polygon’s SDK is designed to be a plug-and-play solution for developers to easily customize certain parameters like consensus mechanisms and synchronization schedules to optimize blockchain-based processes for particular platforms and tasks. Polygon’s approach in this regard is not unlike that of the Polkadot network, which supports a “multichain” network of interconnected and interoperable blockchains. If Polygon’s SDK becomes widely adopted and integrated, there’s potential for Ethereum to also develop into a multichain ecosystem.

  9. Future of the Polygon Crypto Network

  10. Many blockchain experts contend that the success of Polygon and networks like it in working toward increasingly effective scaling solutions for the Ethereum blockchain may mark a transition to a multichain future where popular dApps are incentivized to release deployments on more than one blockchain network in order to reach a wider audience and better serve their users. 

    By leveraging deployments on multiple platforms, new protocols and dApps can more easily scale to a wider user base. With the development of additional scaling infrastructure and the potential transition toward a full-fledged multichain ecosystem, the Polygon crypto network hopes to transform Ethereum into an “Internet of Blockchains.” With more direct support from major Ethereum developers than ever before, and a short but successful track record, Polygon is well positioned to play a key role in such a transformation. 

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