Ethereum is one of the most popular hubs for developing prominent Decentralized finance (DeFi) projects. Also, Ethereum is one of the most secured blockchains based on node activities and miners. Apart from the advantages mentioned above, Ethereum faces severe limitations regarding user satisfaction. So, Polygon comes with apt solutions to tackle the issues faced by Ethereum.
What Is Polygon (MATIC)?
Polygon is an easy-to-use and well-structured platform that scales Ethereum and its infrastructural development. Polygon was co-founded in October 2017 by Sandeep Nailwal, Anurag Arjun, and Jaynti Kanani. The core component of Polygon consists of Polygon SDK. This Polygon SDK is a very flexible and modular framework that helps build different types of applications. Polygon allows the developer to create ZK-Rollup chains, stand-alone chains, Optimistic Rollup chains, and other required infrastructures. With the help of a full-fledged multi-chain system, Polygon aids the transformation of Ethereum as the ‘Internet of Blockchains.’ In addition, the users enjoy the benefits of Ethereum’s openness, security, and vibrant ecosystem. At the time of writing, Polygon has more than 19,000 DApps, 130 million users with over 3 million daily transactions. Apart from that, Polygon has completed over 3.4 billion transactions since its inception. Polygon achieved its incredible achievement of crossing 150 million unique addresses.
How Does Polygon Work?
Polygon facilitates the developers with various modules to configure and deploy a custom blockchain. The modules provided are governance and consensus modules. Apart from that, Polygon also supplies the developer with multiple machine implementations and execution environments. Polygon configured blockchain gains benefits of the Proof of Stake(PoS) consensus. To be a validator in the PoS layer, the participant needs to stake MATIC tokens. Eventually, the network of validators helps to reduce the fees and to speed up the transactions. Adding a Layer 2 scaling solution also enables Polygon in the process of massive DApps adoption. Polygon uses MoreVP (More Viable Plasma) to implement Layer 2. In addition, the major crypto exchanges, Coinbase and Binance, back the layer 2 scaling solution. The main aim of the Polygon project is to scale up on multiple blockchains for a mass crypto embracement. The Polygon platform supports multiple blockchain scaling mechanisms such as ZK-Rollups, Matic Plasma, Validum Chains, and Optimistic Rollups. These scaling mechanisms enhance the transactional throughput of its blockchain without limiting the user experience and security.
Why is MATIC Token Important?
MATIC is the native utility token of Polygon. In addition, MATIC is also an ERC-20 token that runs on the Ethereum blockchain. The token acts as a settlement currency for transactions in the Polygon ecosystem. The maximum fixed supply of MATIC is 10 billion tokens. The validators on the network get rewarded with MATIC tokens. Similarly, the token stakers also get rewarded with MATIC according to the value of the staked tokens. MATIC is available on popular crypto exchanges such as Huobi Global, Binance, Coinbase Pro, and KuCoin. Besides that, the high liquid trading pairs of MATIC are MATIC/USDT, MATIC/BUSD, MATIC/USD, and MATIC/BTC.
Popular Use-cases of Polygon Project
The advantages of the Polygon project resulted in its quicker adoption in various technology-based projects. Let’s look at some popular activities based on Polygon technology.
#1. Instagram Launches NFT collectibles On Polygon
Instagram took an innovative initiative to introduce digital collectibles using the Polygon blockchain. So if you are a digital creator, you can use Instagram to display your collections to millions of users. Instagram is testing these new features with a selected number of American creators. After the test phase, all users can use the Instagram digital collectibles. Besides sharing digital collectibles, Instagram also provides a digital wallet to store and transfer various NFTs. In addition to that, an automatic tagging feature helps to tag the collector and creator on the platform. The blockchains supported at the launch are Polygon and Ethereum. The wallets supported by the platform include Trust Wallet, MetaMask, and Rainbow. Moreover, wallets such as Dapper, Phantom, and Coinbase are in consideration. Instagram chooses Polygon to improve accessibility and provide low entry barriers to users. In addition, blockchain technology offers ownership and security for the creator’s contents.
#2. Stripe Expanding Global Payouts on Polygon
Stripe takes its payment-based services to the next level by implementing crypto payouts on a global scale. Stripe uses the Polygon network to execute crypto-related transactions using ‘Strip Connect.’ Implementing blockchain to Stripe’s platform reduces the payment-based difficulties freelancers, sellers, solopreneurs, and creators face. In other words, the crypto-based transaction between a creator and payer solves the complexity of currency transfer. All the crypto payments are executed through the Polygon network considering the advantages of the network. The significant reasons for Stripe to choose Polygon are high speed, low fees, broad wallet compatibility, and integration with Ethereum. Currently, Stripe supports payouts in USDC. Once the creators receive the payment on cryptos, their tokens are instantly available in their connected wallets. Apart from that, the user can also exchange the token with another.
#3. Adidas Originals and Prada NFT Launch On Polygon
The top two international brands, Adidas Originals and Prada are collaborating to promote metaverse-based NFTs. Polygon Studios are behind the massive collaboration project. The final NFT combines 3000 artworks sourced by the community. Zach Lieberman, a renowned digital artist and creative coder, compile the selected artworks into a single frame. Adidas Originals and Prada used the benefits of the Polygon network to leverage Web3 and NFT technology. Apart from that, the participants and creators get collective-rooted ownership. The small individual tiles for the NFT project are built using Polygon to reduce the fees and for energy efficiency. In addition, blockchain technology helps users with a user-friendly platform to contribute their artwork, get digital ownership and receive various NFTs.
Which are the Major Polygon Projects?
The features provided by Polygon, such as high scalability, high-security standards, and low fees, resulted in more Polygon projects. Currently, there are thousands of DApps built on the Polygon network. Let’s have a look at the top crypto Projects built on Polygon.
#1. QuickSwap
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 to bridge the tokens over the Polygon network. The QuickSwap platform also forms liquidity pools using an Automated Market Maker (AMM). The availability of various liquidity pairs enables quicker transactions among the users. Apart from that, the gas fees charged during the transactions are minimum. Furthermore, the providers of liquidity tokens get rewarded with the native QUICK tokens. In addition to these rewards, the users can also benefit from the dual mining feature.
#2. Opacity
Opacity is a decentralized file storage service. Polygon facilitates this decentralized file storage on the Ethereum network. The user has complete authority over the stored files. An encrypted “handle” feature provides only the user permission to access their encrypted files. The user can access the starter plan provided by the Opacity platform for free. However, the data for the starter plan is limited to 10 GB of storage space. To access more storage space, the user must upgrade to Plus or Professional plans. The Opacity platform provides a Rubic DEX aggregator to swap tokens to Opacity tokens (OPCT). The users can pay fees with OPCT tokens. Privacy of the stored data is the prime aim behind the Opacity Platform. Therefore, the platform doesn’t store any information related to the stored data. Opacity uses Bitwarden as a password manager and provides end-to-end encryption to safeguard user files. Apart from that, the platform has Tor Browser enabled to protect the user against surveillance, censorship, and tracking.
#3. Mai Finance
Have you ever imagined interest-free money borrowing? If yes, that’s what Mai Finance does. Mai Finance helps users to borrow stablecoins without selling their crypto assets. Apart from that, the user doesn’t need to pay any interest. Mai Finance works on the QiDao Protocol built on Polygon. This protocol is run and governed by the community. MAI is the stablecoin that backs the collateral assets. To obtain the MAI token, the lenders need to deposit equivalent MATIC in their vaults. The QiDao Protocol allows the token holders to borrow tokens without exiting their long-term positions. Apart from that, the platform doesn’t charge any scheduled payments from the borrowers. Instead, the credit is availed instantly to the user without any credit checks.
#4. Impermax
Impermax is a decentralized, cross-chain, and permissionless lending protocol that allows users to participate in lending and borrowing activities. The lender receives the interest from the isolated pools, whereas the borrower deposits LP tokens into the pool. Apart from lending and borrowing, Impermax users can also benefit from yield farming. Farmers can avail of DEX yields by depositing a single token. The lender receives the increased earnings through Indirect Liquidity Providing. The lending market in the Impermax ecosystem uses a unique economic architecture. The implementation of the architecture helps to keep the lending pools isolated. The isolated pools enhance higher security against any attack. Impermax also implements a collateralization model. The implementation of this model helps to restrict over-collateralization-based issues. The platform uses a “safety margin” parameter to calculate the collateral value. In addition, the model offers higher leverage than the traditional models.
#5. Augur
Augur is a decentralized prediction market. The introduction of Augur changed the concept of traditional centralized prediction markets. Ethereum was used to build the first prediction market. Upon progression, Polygon altered the phase of Augur. Augur got turbo-charged with the Polygon, and “Augur Turbo” is the most developed deployment. Augur offered an intuitive user interface with the help of a balancer AMMS developed on Polygon. Apart from that, Augur Turbo charged almost zero charges. Augur mainly focused on recurring markets such as crypto, sports, politics, and economics. Using Chainlink data enhances the automatic and fast resolving crypto and sports markets. The trading currency used in the market is USDC. At the same time, the liquidity miners receive WMATIC tokens as a reward. The platform also provides a specialized UI for sportsbooks and a specific UX for trading. In addition, the users can also compare and convert odds using Odds Converter.
Conclusion
Polygon is developed as a framework to provide blockchain scaling solutions compatible with Ethereum. The EVM compatibility, low cost, and speedy transactions resulted in greater adoption, thanks to the Polygon Network and its PoS sidechain. Polygon plans for further scaling in the coming future by including stand-alone blockchains, optimistic rollups, and ZK rollups. Apart from that, these prominent inclusions help to develop a much more interconnected and efficient Layer 2 Ethereum Ecosystem. You may also check about the Best Hardware Wallets.
