From NFT marketplaces and games to the expanding DeFi ecosystem, the Ethereum blockchain is the hub of a wide variety of economic activities. Because smart contracts that can be used to create a wide variety of applications are compatible with Ethereum, this activity is perfectly suited to it.
The Ethereum blockchain is being used by more and more transactions as a result of these apps’ rising popularity, and as a result, financial intermediaries might occasionally increase to the level where making simple or regular investments can become unprofitable. This is where Polygon comes in.
For reference, just like some trusted Bitcoin Prime site, which offers safe and quick transactions, Polygon refers to a “Layer 2” scaling solution that has been developed to provide consumers with quicker transactions and reduced expenses.
Running concurrently with the main Ethereum blockchain, it serves as a quick secondary blockchain. To utilize it, you may “bridge” a portion of your cryptocurrency to Polygon and then access a variety of well-known crypto programmes that were previously restricted to the core Ethereum blockchain.
MATIC: What is it?
MATIC, the cryptocurrency that Polygon uses for its own governance, staking, and network fees, is owned by Polygon, which means that MATIC holders get to vote on changes to Polygon. MATIC may be bought and sold on Coinbase and other exchanges as well. In a previous phase of Polygon’s evolution, the term MATIC was used. Developers changed their name to Polygon at the beginning of 2021 after starting as MATIC Network in October 2017.
What is the operation of Polygon?
Imagine Polygon as an overnight train on the metro; it follows the same path as the standard train but requires fewer stops and goes at a quicker rate. This quick parallel blockchain is built by Polygon using a number of different technologies, and it is connected to the primary Ethereum blockchain. Polygon works on a proof-of-stake model, which means that you can stake the MATIC you own over the network to create new MATIC coins, and earn a reward in return.
The validators are responsible for checking and validating transactions before they are transferred to the blockchain, which is most of the hard work being done on the blockchain. The validators get rewarded with a fee and newly created MATIC. e hard work is done by validators, who check new transactions before adding those to the blockchain.
In return, they may get a portion of the fees and the newly developed MATIC. In order to be a validator, certain prerequisites are to be met, including the maintenance of a decentralize network, as well as staking of one’s own MATIC. In order to ensure fair play across all processes, the network imposes a fine in form of your own MATIC coins, if you are deliberately caught committing a blunder or a criminal act.
What purposes does the polygon network serve?
You might carry out most operations that are supported by the regular Ethereum network over the Polygon network as well, but at amazingly low rates, which mostly stand around the hundred parts of a penny. Decentralized trades like SushiSwap or QuikSwap, marketplaces for NFTs such as OpenSea, and loans that generate yields, in addition to savings protocols such as Aave, as well as games that do not involve losses or rewards, such as Pooltogether can all be tried.
Send some cryptocurrency to a wallet that is compatible with the Polygon network, such as Coinbase Wallet, in order to test it out. Stablecoins are a well-liked option for this, and you may then “bridge” some of your cryptocurrency to the Polygon platform. You will also need to transfer some MATIC to complete transactions, but because costs are so minimal, even one dollar’s worth is sufficient.
The Polygon network is a fantastic tool to test out DeFi protocols in the real world because of its affordable prices and instantaneous transactions. Do not forget that DeFi may be quite volatile, so start out small and only spends what you can expect to miss, especially if you are just getting started.
The native cryptocurrency token of Polygon is called MATIC. The PoS consensus process is used by polygon plasma chains. All operations on the fluid chains will be funded by MATIC. Thus, the need for MATIC will increase as more projects use Polygon as their scaling option. By enabling holders to choose which of the several proposed scaling solutions should actually be implemented, MATIC also functions as governance token.
Token holders can vote on whether a fresh layer-2 scaling solution should be added to Polygon’s product line if the community favours it and wants it to be integrated. As a result, MATIC token owners may choose how Polygon will be run through governance voting.
