Polygon is a sidechain or scaling tool for the Ethereum blockchain. Ethereum, while very popular, is slow and expensive. Polygon is a way to help avoid this issue by processing transactions outside of the Ethereum blockchain.
While the recent Ethereum Merge is the first step towards increasing the transactions per second (TPS) on the blockchain, most of the upgrades that will facilitate that speed are still in the future. Ethereum is able to process about 10 to 30 transactions per second, with transaction fees hovering around $25, as of January 2023. During periods of high network congestion, the price can spike two or three times higher.
That’s where scaling systems such as Polygon come in. Polygon makes things cheaper by processing batches of transactions on its proprietary proof-of-stake blockchain. Polygon claims to be able to process up to 65,000 transactions each second, with fees costing less than a fraction of a cent.
In 2021 you might have seen the blockchain project name Polygon used synonymously with “Matic Network.” That’s because Matic Network was the original name of Polygon before the project was rebranded in February 2021. Matic Network launched in 2019.
Polygon decided to retain the ticker MATIC for its native utility crypto token after the rebranding, leading to some initial confusion. All you have to remember is that Polygon is to MATIC as Ethereum is to ETH.
There are 10 billion possible MATIC tokens. As of January 2023, 8.9 billion MATIC are in circulation. The rest will be minted by stakers – users who deposit their MATIC into a staking smart contract in order to become validators. Polygon is a proof-of-stake network that randomly selects stakers to validate new transaction data.
Scaling solutions: the bigger picture
Polygon is an Ethereum scaling solution, but it plans to expand beyond Ethereum. It pitches its services as a framework for an “internet of blockchains,” which means it can connect any Ethereum-interoperable blockchain together and be used to cut transaction costs and increase speeds.
Polygon is not the only project that attempts to hasten transactions on Ethereum. There are a number of rival blockchains that also support “bridges” and let people trade variants of Ethereum tokens. These include:
Brands and NFTs using polygon
Polygon has won mass-market attention thanks to Starbucks, Nike, Reddit, Meta and DraftKings launching projects on Polygon in 2022. It was also the blockchain of choice for Disney’s Accelerator program. The president of Polygon Labs credits the success of these big brands to building “this great funnel for partners to come through and make the onboarding to Polygon really seamless.”
In addition, Polygon has made a concerted effort to garner more of the NFT market, recently paying DeLab, the startup behind top artists Y00ts and DeGods, $3 million to migrate chains from Solana to Polygon. Former President Donald Trump’s first foray into NFTs was minted on Polygon. NFT marketplaces OpenSea, Magic Eden and most recently, Rarible, support NFTs minted on Polygon.