What Is Polygon (POL)
Polygon is a project creating a Layer 2 solution for the Ethereum Virtual Machine, designed to allow the development of applications for various purposes, mainly "building the Value Layer of the Internet."
The Polygon platform operates using the Ethereum blockchain and connects Ethereum-based projects. Using the Polygon platform can increase the flexibility, scalability, and sovereignty of a blockchain project while still affording the security, interoperability, and structural benefits of the Ethereum blockchain.
POL (formerly called MATIC) is an ERC-20 token, meaning that it's compatible with other Ethereum-based digital currencies. POL is used to govern and secure the Polygon network and to pay network transaction fees.
Key Takeaways
- The Polygon platform, powered by the POL (formerly MATIC) token, was launched to connect and grow Ethereum-compatible projects and blockchains.
- POL tokens are used to govern and secure the Polygon network and pay transaction fees.
- Polygon uses a modified proof-of-stake validation mechanism to efficiently operate the platform.
History of Polygon
Polygon began as the Matic Network in 2017, co-founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic. After an initial exchange offering on Binance in 2020, the project rebranded to Polygon and morphed into a company that focuses on Web3 application development.
In January 2022, Polygon hired a new chief executive officer (CEO). Ryan Wyatt joined Polygon from YouTube, where he was the head of gaming.
Several significant events took place in 2023. Polygon Labs, the company behind blockchain development, was formed. The Polygon Foundation was established to ensure the project had support in research, development, and blockchain education. Lastly, Marc Boiron, its former Chief Legal Officer, was elected CEO.
The Polygon blockchain has undergone several upgrades, the most significant of which was in October 2023, which, among other things, started the process of changing its native token MATIC to POL. The change went live on Sept. 4, 2024.
Understanding Polygon
Polygon uses a proof-of-stake validation mechanism. The proof-of-stake method requires network participants to stake—agree to not trade or sell—their POL, in exchange for the right to validate Polygon network transactions. Successful validators in the Polygon network are rewarded with POL.
The Polygon network, as a secondary scaling solution, aims to address the limitations of the Ethereum platform—namely high transaction fees and slow transaction processing speeds. Polygon can:
- Deploy existing blockchain networks and develop custom blockchains
- Enable communication between Ethereum and other blockchains
- Help existing blockchain networks to become compatible with Ethereum
Advantages and Disadvantages of Polygon
Polygon's strengths include:
- Ability to process transactions quickly: By using a consensus mechanism that completes the transaction confirmation process in a single block, Polygon can maintain fast transaction processing speeds. Polygon's average transaction processing time is more than 32 transactions per second.
- Transaction fees are consistently low: Polygon keeps its fees to use the platform low, with a typical transaction fee equaling less than $0.01.
- Interoperability and scaling: Polygon is designed to be interoperable with Ethereum and scale without limits.
Polygon's weaknesses include:
- Not an autonomous blockchain: Polygon is a Layer 2 solution that works on top of the Ethereum platform. If the Ethereum platform experiences serious disruptions or ceases to exist, Polygon will likely lose some functionality.
- Limited use cases for POL: The POL token is designed to govern and secure the Polygon platform and to pay or earn fees. Unlike some digital currencies, POL is not generally used for everyday purchases.
- Incomplete: Like many blockchain networks, the Polygon blockchain and ecosystem are still under development. The team is working to achieve its vision and maintain the popularity the project has experienced with other developers.
Polygon vs. Ethereum
Polygon is a secondary scaling solution that is compatible with and complements the Ethereum blockchain. Polygon aims to improve upon Ethereum as a blockchain development network by providing a side chain that assists it and zero-knowledge proofs for it.
Both Ethereum and Polygon use a proof-of-stake mechanism that enables transactions to be processed quickly and cheaply.
Future of Polygon
Polygon launched Polygon Village 2 in November 2023, its updated outreach program designed to encourage Web3 development companies. Village provides grants, access to accelerators, mentorship, and support for startups creating applications for Web3.
Web3
Web3 is believed to be the next evolution of the Internet—a restructuring and rebuilding of the systems and infrastructure behind the scenes rather than changing how people interface with it.
Polygon's Village program is designed to boost decentralized application development using its blockchain for the emerging Web3 infrastructure. Upgrades have set the stage to provide Ethereum with unlimited scalability and liquidity and to jump-start the "Value Layer"—the idea that one day, there will be an Internet infrastructure where people will control the value of and own their creations, data, and information rather than large corporations monetizing it.
Blockchain and Token
In October 2023, Polygon implemented changes to the blockchain that began a process of changing MATIC tokens to POL, which was completed in September 2024. This upgrade will allow Polygon and its POL token to be used as an ecosystem upon which multiple Layer 2 chains can be built. There are more programming languages available, more efficient bridges between Ethereum and Polygon, and a new layer for staking tokens.
Is MATIC Converting to Polygon?
Polygon successfully transitioned its MATIC token to POL on Sept. 4, 2024.
What Is the Difference Between POL and MATIC Token?
POL adds more functionality and use cases to the Polygon blockchain. Most notable is the new token's fee earning structure, which allows users the option to earn fees from many more activities.
What Is a POL Polygon?
Polygon's POL is the new native token for its blockchain.
The Bottom Line
Polygon (POL) is a cryptocurrency and technology platform that was launched to connect and grow Ethereum-compatible projects and blockchains and assist new businesses in creating applications for Web3.
POL tokens are used to govern and secure the Polygon network and to pay fees for a variety of blockchain activities. Investors can buy POL tokens on exchanges such as Coinbase or Kraken.
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