In 2015, a new blockchain was introduced called Ethereum created by developer Vitalik Buterin due to the shortcomings of Bitcoin.
So Ethereum is a decentralized blockchain network where users are enabled to make transactions through Ether tokens, earn interests, store NFTs (Non-Fungible Tokens), trade cryptocurrencies, and much more.
Working of Ethereum
Ethereum is a decentralized platform which means the power of the blockchain network is not in the control of a single organization but its network is distributed around the globe on thousands of computers which makes it decentralized.
In web2 products are used by users and all things are controlled by different organizations, In web3 the platform is controlled and managed by the community since all the codes are open-source where anyone can contribute to the codebase of Ethereum and make it more secure.
Ethereum operates on a computer called EVM (Ethereum Virtual Machine) where all the transactions in cryptocurrencies are carried out and verified by miners so that they can update the history of the transaction on the network so that it shows as transaction history and verify this is called Proof of Work(POW).
Since all the transactions are done on the Ethereum network which has gas fees included in its means for performing each transaction a certain amount is charged by the network to perform this action. This gas fee can vary from network to network and miners prefers to validate the transaction with higher gas fees.
Drawbacks of Bitcoin & Advantages of Ethereum
Bitcoin was created to do transactions of the cryptocurrencies much faster than a normal fiat currency which was a major limitation of Bitcoin over Ethereum but since web2 companies ruling over the internet like Google, Amazon, Apple, etc… are centralized and running over servers. But there was no platform where decentralized applications can be created that’s so Ethereum was created to build DApps (Decentralized Applications) with the help of Smart Contracts and Solidity programming language, the transactions on Ethereum are much faster than a Bitcoin and the developer community of Ethereum is much popular among developers than Bitcoin.
Drawbacks of Ethereum
Ethereum can only do 30 transactions/sec (TPS) which is the major drawback since it was a quite popular platform the processing speed is very low it cannot handle the large number of people performing these actions. It is not user-friendly since people are bidding on each other to do transactions and be in 30 TPS.
Since Ethereum was quite popular among developers but it does not provide many options to the developer communities and It has much higher gas fees compared to Bitcoin.
Need of Polygon (Matic)
Since these were the major drawbacks of Ethereum which needs to be solved and fill out the gap in this platform therefore a new blockchain was introduced initially called Matic which was later changed to Polygon.
So Polygon has a higher processing speed, fewer gas fees, and better options for developer communities which filled out the gaps in the Ethereum platform.
History of Polygon
In the year 2017 in India, 3 people started to solve this scalability problem of Ethereum, Jayanti Kanani CEO & Co-Founder of Polygon, Sandeep Nalilwal Cofounder and COO, and Anurag Arjun Cofounder and CPO who created the Matic network which was later renamed as Polygon but still the coins are called Motic only.
So Polygon is a layer-2 scaling platform that tackles the drawback of Ethereum platform problems like scalability issues and lower gas fees and it provides a security level to DApps created using this platform.
So, the Matic network can now be used to build scalable platforms on Ethereum without facing any issues of scalability.
Over 3000+ dApps are created on the Polygon network of which 80+ are built on Ethereum which migrated to Polygon. Since Polygon is so similar to Ethereum many developers which create dApps on Polygon can also run on the Ethereum network.
Working of Polygon
Since the Ethereum platform can perform a limited number of transactions/second which is around 30 there is an increase in gas fees which varies from $50 to $100 and can go even more, therefore, it limits the number of transactions and thus has lower processing speed.
On the other hand, Polygon makes the Ethereum platform much more scalable by using the side chain of Ethereum which results in higher processing speed and can do 65,000 TPS, which in results lower gas fees and therefore is much more affordable to the end users… The side-chain of the Polygon network is called Proof of Stake(POS)
Polygon is a multi-chain platform that operates on a series chain of blockchain to scale on Ethereum because of this developers can easily create all kinds of scaling solutions. Some of the side chains of the Polygon network are zk rollup and optimistic rollup.
Zk rollups process the bundles of transactions and create validity proofs that verify the transaction if it is accurate or not and then this is sent to the main blockchain.
Optimistic rollups use different proof of system called fraud proofs for fraud transactions processed, when any such transactions are discovered they are verified from the real transactions and then send to the main blockchain.
Polygon Architecture
The Polygon architecture is divided into 4 layers which are:
- Ethereum Layer: It is made up of different Ethereum smart contracts which are used for staking, transaction verification, and interaction of Ethereum with other Polygon blockchains.
- Security Layer: It provides services of another security layer to validate the transactions done on the Ethereum network.
- Polygon Network Layer; It is the layer of the Polygon blockchain network and projects developed on it and has their communities for building up these projects.
- Execution Layer: It is Polygon EVM and its main function is to execute smart contracts on the Polygon blockchain. It helps the developers for greater user- experience.
Tokenomics of Polygon
The Polygon network has a native token called Matic. The market cap of Polygon is around $13 billion of Matic coins, which are disbursed monthly and have a total supply of $10 Billion of which $7.5 Billion is under circulation. The remaining $2.5 Billion will be circulated periodically over the next 4 yrs.
Ethereum Vs Polygon
Ethereum isn’t the competition for Polygon since it is leveraging and solving drawbacks of Ethereum and provides greater scalability for dApps on the Ethereum blockchain. Since Polygon is built on top of Ethereum it isn’t the competition but is more dependent on the Ethereum blockchain.
Polygon wants more people to leverage the Ethereum network which as result will help Polygon to grow its network base.
Why use Polygon over Ethereum
Polygon is the layer-2 scaling solution built on Ethereum. Ethereum layer 1 has major drawbacks like higher gas fees, lower processing speed, etc.. which were solved by the Polygon network, Ethereum 2.0 also can’t solve this major problem but it will be able to solve some % of scalability issues but it is currently far away and might be in future we would be able to see this.
Why Polygon is special?
Since there are different competitors in the market which provide layer 2 solutions over Ethereum but why then people know more about Polygon and what makes this network so special, so Polygon is only a network that has its own token Matic which other competitors of Polygon don’t have and which can be staked by users means they can earn interest of it annually for validating the transactions on this blockchain. Other than that Polygon allows developers to get great experiences and easy customization options on a single network.
So Polygon has been one of the most popular layer-2 networks built on Ethereum and has greater scope in the future since it has higher speed, low transaction cost, and greater developer experience.
Resources to start building on Polygon
Originally published at https://medium.com on August 7, 2022.
