Polygon (MATIC) Cryptography: Everything You Need to Know

Polygon is a crypto project developed as an effective solution to the challenges faced by Ethereum. Polygon solves Ethereum’s poor user experience, low transaction throughput, and high fees.

Ethereum is one of the most popular hubs for developing prominent decentralized finance (DeFi) projects. Ethereum is also one of the most secure blockchains based on node activity and miners.

Apart from the above advantages, Ethereum faces severe limitations when it comes to user satisfaction. Therefore, Polygon comes with a suitable solution to address the problems faced by Ethereum.

What is polygon (MATIC)?

Polygon is an easy-to-use, well-structured platform for extending Ethereum and its infrastructure development. Polygon was co-founded in October 2017 by Sandeep Nailwal, Anurag Arjun, and Jaynti Kanani.

Polygon’s core components consist of the Polygon SDK. The Polygon SDK is a highly flexible, modular framework that helps you build many different types of applications.

Polygon allows developers to create ZK-Rollup chains, standalone chains, Optimistic Rollup chains, and any other required infrastructure.

Polygon supports the transformation of Ethereum as the “Internet of Blockchains” with the help of a full-fledged multi-chain system. Additionally, users benefit from Ethereum’s openness, security, and vibrant ecosystem.

As of this writing, Polygon has over 19,000 DApps, 130 million users, and over 3 million transactions every day . Apart from that, Polygon has completed over 3.4 billion transactions since its inception.

Polygon has achieved the incredible feat of exceeding 150 million unique addresses .

How do polygons work?

Polygon allows developers to configure and deploy custom blockchains using various modules. The modules provided are a governance module and a consensus module. Apart from that, Polygon also provides developers with multiple machine implementations and execution environments.

Polygon-structured blockchains gain the benefit of proof-of-stake (PoS) consensus. To become a validator in the PoS layer, participants must stake MATIC tokens. Ultimately, a network of validators helps reduce fees and speed up transactions.

Adding a Layer 2 scaling solution will also enable Polygon to move forward with large-scale deployment of DApps. Polygon implements Layer 2 using More Viable Plasma (MoreVP). Additionally, major cryptocurrency exchanges Coinbase and Binance support layer 2 scaling solutions.

The main goal of the Polygon project is to scale up multiple blockchains to achieve mass adoption of cryptocurrencies.

The Polygon platform supports multiple blockchain scaling mechanisms such as ZK-Rollups, Matic Plasma, Validum Chains, and Optimistic Rollups. These scaling mechanisms increase blockchain transaction throughput without limiting user experience and security.

Why is the MATIC token important?

MATIC is Polygon’s native utility token. Additionally, MATIC is also an ERC-20 token running on the Ethereum blockchain. The token serves as the settlement currency for transactions within the Polygon ecosystem.

The maximum fixed supply of MATIC is 10 billion tokens. Validators on the network will be rewarded with MATIC tokens. Similarly, token stakers also receive MATIC rewards based on the value of staked tokens.

MATIC is available on popular cryptocurrency exchanges such as Huobi Global, Binance, Coinbase Pro, and KuCoin. In addition to that, MATIC’s highly liquid trading pairs are MATIC/USDT, MATIC/BUSD, MATIC/USD, and MATIC/BTC.

Common use cases for Polygon projects

The advantages of the Polygon project have led to its rapid adoption in various technology-based projects. Let’s take a look at some popular activities based on Polygon technology.

#1. Instagram releases NFT goods with Polygon

Instagram has taken an innovative step to showcase its digital collection using the Polygon blockchain. So if you’re a digital creator, you can use Instagram to show your collection to millions of users.

Instagram is testing these new features with a select number of American creators. After the testing phase, Instagram’s digital collections will be available to all users.

In addition to sharing digital collectibles, Instagram also offers a digital wallet to store and transfer various NFTs. In addition to that, the auto-tagging feature helps tag collectors and authors on the platform.

Blockchains supported at launch are Polygon and Ethereum. Wallets supported by this platform include Trust Wallet, MetaMask, and Rainbow. Additionally, wallets such as Dapper, Phantom, and Coinbase are being considered.

Instagram selected Polygon to improve accessibility and lower the barrier to entry for users. Additionally, blockchain technology provides ownership and security of creator content.

#2.Stripe to expand global payouts with polygons

Stripe is taking payments-based services to the next level by implementing cryptocurrency payments globally. Stripe uses the Polygon network to perform crypto-related transactions using “Strip Connect.”

Implementing blockchain on Stripe’s platform alleviates payment-based challenges faced by freelancers, sellers, sole traders, and creators. In other words, crypto-based transactions between creators and payers solve the complexity of currency transfers.

Considering the advantages of the network, all cryptocurrency payments are carried out through the Polygon network. Stripe chose Polygon primarily for its high speed, low fees, wide wallet compatibility, and integration with Ethereum.

Stripe currently supports payments in USDC. Once the creator receives the cryptocurrency payment, the tokens will be immediately available in the connected wallet. Apart from that, users can also exchange their token for another token.

#3.Adidas Originals and Prada NFT released on Polygon

Top two international brands, Adidas Originals and Prada, are collaborating to promote Metaverse-based NFTs . Polygon Studios is behind large-scale collaborative projects.

The final NFT combines 3,000 artworks contributed by the community. Zach Lieberman, a renowned digital artist and creative programmer, compiles selected artwork into a single frame.

Adidas Originals and Prada took advantage of the Polygon network to leverage Web3 and NFT technology. Apart from that, participants and creators acquire collective ownership.

The small individual tiles in the NFT project are built using Polygon to reduce fees and increase energy efficiency. Additionally, blockchain technology will help users with a user-friendly platform to post artwork, take digital ownership, and receive various NFTs.

What are the major Polygon projects?

The high scalability, high security standards, and low fees offered by Polygon have led to the birth of more Polygon projects. There are currently thousands of DApps built on the Polygon network.

Take a look at the top crypto projects built on Polygon.

#1.Quick swap

QuickSwap is one of the most popular decentralized exchanges (DEX) built on Polygon. The main feature used by Quickswap is the ERC-20 token bridge. This bridge helps bridge tokens over the Polygon network.

The QuickSwap platform also uses automated market makers (AMMs) to form liquidity pools. A variety of liquidity pairs are available, allowing for quick trading between users.

Apart from that, the gas fees charged during the transaction are minimal. Additionally, liquidity token providers will receive rewards in native QUICK tokens. In addition to these perks, users can also benefit from dual mining functionality.

#2.Opacity

Opacity is a distributed file storage service. Polygon facilitates this decentralized file storage on the Ethereum network.

Users have full permissions to saved files. The encrypted “handle” feature only provides users with permission to access encrypted files.

Users can access the starter plan offered by the Opacity platform for free. However, data in the Starter plan is limited to 10 GB of storage space. To access more storage space, users must upgrade to a Plus or Professional plan.

The Opacity platform provides a Rubic DEX aggregator to exchange tokens into Opacity tokens (OPCT). Users can pay fees using OPCT tokens.

Privacy of stored data is the main objective of Opacity Platform. Therefore, the platform does not store any information related to the stored data.

Opacity uses Bitwarden as its password manager, providing end-to-end encryption to protect user files. Apart from that, the platform has enabled the Tor browser that protects users from monitoring, censorship, and tracking.

#3.My Finance

Have you ever imagined borrowing money without interest? If so, that’s what Mai Fin a nce does. Mai Finance helps users borrow stablecoins without selling their crypto assets. Apart from that, users do not have to pay any interest.

Mai Finance is working on the QiDao protocol built on Polygon. This protocol is run and maintained by the community. MAI is a stablecoin that backs collateral assets. To obtain MAI tokens, lenders must deposit the equivalent MATIC in their vault.

The QiDao protocol allows token holders to borrow their tokens without surrendering their long-term positions. Apart from that, the platform does not charge any recurring payments from the borrowers. Instead, credits are available to users instantly without any credit checks.

#4.Impermax

Imp e rmax is a decentralized, cross-chain, permissionless lending protocol that allows users to participate in lending and borrowing activities. Lenders receive interest from a segregated pool, and borrowers deposit LP tokens into the pool.

Apart from lending and borrowing, Impermax users can also benefit from yield farming. Farmers can take advantage of DEX yield by depositing a single token. Lenders receive increased revenue through indirect liquidity provision.

The lending market in the Impermax ecosystem has a unique economic architecture. Implementing this architecture helps keep loan pools segregated. Separated pools provide increased security against any attacks.

Impermax also implements a collateral model. Implementation of this model helps limit the problem of overcollateralization base. The platform uses a “margin of safety” parameter to calculate the collateral value. Additionally, this model offers higher leverage than traditional models.

#5.Fortune teller

Augur is a decentralized prediction market. The introduction of Augur has changed the concept of traditional centralized prediction markets. Ethereum was used to build the first prediction market. As it progressed, Polygon changed the phase of Augur.

Augur has been turbocharged with Polygon, with “Augur Turbo” being the most developed deployment. Augur leveraged the balancer AMMS developed at Polygon to provide an intuitive user interface. Apart from that, the fees for Augur Turbo were almost zero.

Augur primarily focused on recurring markets such as cryptocurrencies, sports, politics, and economics. Chainlink data powers cryptocurrency and sports markets that are resolved automatically and quickly. The trading currency used in the market is USDC. At the same time, liquidity miners receive WMATIC tokens as rewards.

The platform also offers a sportsbook-specific UI and a trading-specific UX. Additionally, users can also compare and convert odds using the odds converter.

conclusion

Polygon was developed as a framework that provides blockchain scaling solutions compatible with Ethereum. Thanks to Polygon Network and its PoS sidechain, EVM’s compatibility, low cost, and fast transactions have led to increased adoption.

Polygon plans to expand further in the future by including standalone blockchains, optimistic rollups, and ZK rollups. Apart from that, these notable inclusions will help develop a more interconnected and efficient Layer 2 Ethereum ecosystem.

Also check out the best hardware wallets.