The Polygon blockchain project is an Ethereum scaling solution and a framework for creating and connecting Ethereum-compatible blockchain networks. The protocol aims to address some of the most pressing issues that the Ethereum ecosystem is facing today, including low throughput and high transaction fees.
On these pages, we’ve talked about the scalability issues that are so prevalent in ‘first-generation’ blockchains such as Bitcoin and Ethereum. These issues are especially detrimental to Ethereum’s ambition to be the infrastructure layer for a thriving ecosystem of blockchain-powered decentralized apps. This is why finding a solution to the scalability problem has long been one of the highest priorities within the Ethereum dev community.
We’ve already examined some of the solutions that are currently being developed for Ethereum. We examined the ambitious Eth2 project, which seeks to tackle Ethereum’s scalability problem at a foundational level. We also examined the current crop of Layer 2 solutions, including some of the most prominent projects in the roll-up category. Now it’s time to take a look at Polygon, which has quickly become arguably the leading scaling solution for Ethereum.
From Matic to Polygon
The Polygon project started in 2017 under the name Matic Network. The three co-founders, which had been active participants in the Indian crypto community, intended for Matic to provide a solution to the Ethereum scaling problem and began exploring two different approaches for solving the issue – a Layer 2 solution based on an implementation of Plasma and a Proof-of-Stake sidechain solution dubbed the PoS Chain. This is why Polygon is often described as a sidechain, but the reality is that the sidechain solution is just one component of the platform’s scaling proposition. But Polygon’s ambition goes well beyond that.
Following a mid-2020 mainnet launch, the Matic Network started gaining traction amid rising gas fees on Ethereum. This convinced the Matic team that they needed to expand the scope of their project in order to better serve the need for scaling solutions on Ethereum. In early 2021 the Matic Network was rebranded to Polygon to reflect the expanded vision for the project. Rather than developing a scaling solution, the team now set out to create a protocol and a framework for building and connecting different scaling solutions.
What is Polygon blockchain?
Polygon is designed to support different types of scaling solutions, including both Layer 2 options and sidechains. The chains that are supported by the protocol can be divided into two distinct categories – stand-alone chains and secured chains. The former rely on their own consensus mechanisms, so they do not have to rely on Ethereum for security. That said, setting up a reliable consensus mechanism is not an easy task and is certain to be a tall order for many projects. For those a better option would be to run a secured chain.
Secured chains leverage Polygon’s “Security-as-a-Service” model that is provided either directly by Ethereum or by a dedicated pool of validators. We’ll talk more on that topic in the next section.
In addition to providing a security mechanism for those that need one, the Polygon protocol also connects the various chains in its ecosystem, as it handles the passing of arbitrary messages between any two participating Polygon chains, as well as between any Polygon chain and Ethereum.
On top of all this, Polygon is also a development framework that allows for one-click deployment of preset Ethereum-compatible blockchains. Thanks to the platform’s modular design, developers can choose from a growing number of modules, including pluggable consensus, staking, governance EVM and others, to build a solution specifically tailored to their needs.
Now that we have a better understanding of what Polygon is striving to be, we can fully appreciate its ingenious design. As we already mentioned, Polygon seeks to support all kinds of scaling solutions and that aim has informed its architecture, which consists of four abstract and composable layers. Notably, a project is not required to use all four layers, which provides teams with the flexibility to build solutions that best serve their needs.
Let’s examine the layers in more detail.
This layer allows Polygon chains to get access to all benefits of the world’s leading platform for dApp development, including its robust security and high level of programmability. The layer is implemented via a set of smart contracts that handle functions like: finality, staking, message relaying and dispute solving. The Ethereum layer is the first non-mandatory layer.
This layer is responsible for managing the pool of validators that facilitates one of Polygon’s Security-as-a-Service options. The layer is non-mandatory and can be implemented as a meta-blockchain that runs in parallel to Ethereum. Alternatively, it can be implemented directly on Ethereum, with Ethereum miners taking on the role of validators.
The validators perform periodic checks on the validity of any Polygon chain and receive fees for their efforts.This layer also handles validator management tasks such as registration/deregistration, shuffling and reward distribution.
Polygon networks layer
This layer is a constellation of sovereign blockchain networks, with each network serving its respective community. Each network can manage functions like transaction collation, local consensus and block production. The networks can also utilize the Polygon protocol to connect with each other and exchange arbitrary messages.
This is the first mandatory layer in Polygon’s architecture.
Polygon’s second mandatory layer is responsible for interpreting and executing transactions that are agreed upon and included in Polygon networks blockchains. The layer consists of two sublayers – execution environment and execution logic.
Benefits of Polygon
Polygon’s ambitious design brings some considerable benefits, such as scalability gains, and this hasn’t gone unnoticed by the blockchain community. This has helped Polygon become arguably the most popular Ethereum scaling platform out there. According to the Polygon website, there is currently over $9.4 billion in total value locked on Polygon, while the total value of staked MATIC (Polygon’s token) is just over $1.85 billion.
Let’s look at some of the biggest advantages of the Polygon platform.
This is, without a doubt, the main goal of every Ethereum scaling solution and Polygon really shines in that area. Thanks to Polygon’s capacity for supporting dedicated blockchains and scalable consensus algorithms, by using the platform both projects and users can benefit from faster transaction times and lower gas fees. According to the Polygon website, a typical ETH transfer on Ethereum costs around $11.47, as compared to a fee of approximately $0.00099 on Polygon. The stats shared on the website show that Polygon also outperforms Ethereum by a similar margin when it comes to NFT transfers, ETH-ERC20 swaps and other interactions.
Compatibility with Ethereum
Polygon’s compatibility with Ethereum is a major benefit, as it means that Ethereum aApps can be easily deployed on the platform. Meanwhile, developers can benefit from the comprehensive standards and tools that have already been developed on Ethereum.
Speaking of development, Polygon’s modular design makes it easy for developers to build customized solutions or enhance their products with additional features.
As mentioned above, Polygon comes with a built-in mechanism that can connect any two Polygon networks and relay messages between them. At the same time, Polygon also supports bridges to external networks.
Existing scaling solutions on Polygon
Polygon’s Layer 2 solution, Plasma Chains, is an implementation of Plasma, which allows for transactions to be offloaded from the main chains to ‘child chains’. This increases transaction speeds and reduces fees. However, there are long waiting periods for users who want to withdraw their tokens from Layer 2. This is due to Plasma’s reliance on fraud proofs to arbitrate disputes. Another notable drawback is Plasma’s inability to support general computation smart contracts, meaning that it supports only certain types of transactions, such as simple token transfers and swaps.
There is a reason why Polygon is considered a sidechain and it’s because its PoS Chain is by far its most popular scaling solution. The PoS Chain is a Proof-of-Stake sidechain that runs parallel to Ethereum and is secured by validators staking MATIC tokens. The chain also relies on Ethereum security. Since it’s EVM-compatible, the PoS Chain can support general computation, which gives it much greater utility than Plasma Chains.
This summer saw Polygon gaining ZK roll-up capabilities through the merger with one of the most promising projects in that category of scaling solutions. A landmark deal for the DLT industry, the merger was valued at $250 million, based on MATIC prices at the time of announcement. We discuss the deal and Hermez in more detail in our piece on roll-up technology.
With movies like the Hermez merger and the continued development of its products, it’s clear that Polygon aims to position itself as the leading scaling solution for Ethereum. The platform has had a breakout year in 2021 and with DeFi and NFT trading not showing signs of slowing down, its future seems bright.