The price of MATIC, the native token of Polygon, is up more than 9,535% year to date, but I’m wondering if we can count on this to continue in light of Ethereum’s upcoming 2.0 release.
First to get a better understanding let’s start with the basics.
Launched in 2017, at the dawn of DeFi, Matic Network introduced a layer-2 solution using sidechains (one of which is Plasma) designed to increase the extent of scalability of Ethereum.
Layer-2 means the ability to scale the blockchain by using side chains that cannot increase the capacity of the blocks of the original blockchain but are able to use their own blocks to distribute the load on the network. These problems can also be solved within the blockchain, for example, using sharding, which is planned to be implemented in the updated Ethereum 2.0 network.
According to MarK Cuban’s website:
Polygon is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports building and connecting Secured Chains like Plasma, Optimistic Rollups, zkRollups, Validium etc and Standalone Chains like Polygon POS, designed for flexibility and independence. Polygon’s scaling solutions have seen widespread adoption with 250+ Dapps, ~76M txns and ~790K unique users.
Organic innovation is the beauty and strength of Ethereum, but its side effect is an unstructured, hard to navigate scaling/infra landscape.
Polygon SDK aims to introduce structure to the ecosystem and provide a framework for multi-chain Ethereum to grow further and faster.
ETH 2.0 is a large-scale update that will improve the scalability and throughput of the Ethereum blockchain up to 100,000 transactions per second, according to the platform’s co-founder Vitalik Buterin. In addition, as part of the update, ETH 2.0 will switch to the PoS consensus mechanism, which does not require waste expenses for mining equipment and electricity. Moreover, PoW mining will also remain available to users
*According to Ethereum’s official website Eth2 researchers are working on ways to accelerate the merge. It will probably happen earlier than expected.
The scalability of the Ethereum network is now one of the main problems associated with the DeFi industry. The fact is that the blockchain ecosystem is not yet able to scale enough to meet the growing demands of the community. This leads to congestion in the decentralized network and high transaction costs, making it almost impossible to regularly use decentralized applications for everyday tasks.
Thanks to sidechains, the Matic Network allows for cheap and fast transactions based on the Ethereum blockchain, as well as interacting with other blockchains. Blockchain developers, in turn, can create high-performance dApps built on top of the Matic Network blockchain.
The second drawback of Ethereum is its unfriendly UX. Matic developers have presented a simplified interface that will improve user experience using decentralized platforms and DApps. The team also developed the Polygon (Matic Network) SDK, which will simplify the development of decentralized applications and make it more efficient.
Existing solutions that have introduced blockchains compatible with the Ethereum network are fragmented. This means that there is no single protocol that would ensure compatibility and reliable interoperability between blockchains. Therefore, the Polygon Network aims to create a single sovereign and scalable infrastructure for the development of, in fact, the Internet of blockchains.
This is what the ecosystem built around Ethereum will look like after the development of the Polygon network:
Each blockchain in the Polygon ecosystem operates autonomously and ensures its internal security while interacting with other blockchains. Although the Polygon Network is going to create a single pool of validators, which implies a higher level of security and flexibility, but the autonomy of such networks will be worse.
Polygon Network Architecture
A little known fact is that Ethereum is already the biggest multi-chain in the world!
It has organically developed and grew to host a multitude of chains that are all adding value to its ecosystem:
Multi-chain Ethereum will be akin to other popular multi-chains (Polkadot, Cosmos etc), but with some major upsides:
Comparison of Polygon functionality with other solutions designed for scaling the Ethereum network:
So far, Polygon released SDK beta ahead of schedule and aims to support building two major types of solutions:
This release supports stand-alone chains, L2s will be introduced in future releases.
Polygon SDK architecture follows two main design concepts:
It is materialized through pluggable modules, grouped into three layers:
The platform team consists of blockchain experts and consultants, including Hudson Jameson from the Ethereum Foundation, Anthony Sassano from EthHub, and Pete Kim from Coinbase. The Polygon Network is used by such well-known projects as the Polymarket prediction market, Aavegotchi, the crypto-collection game that uses Non-Fungible Tokens (NFT), Decentral Games, which is based on Decentraland, and the DeFi aggregator Easyfi.
Ethereum 2.0 client is expected to be able to run on a slow computer because the client picks a sing shard by default
Because Polygon requires upfront that a client must run on a high-performance computer (rather than your typical laptop that Ethereum client can)
Ethereum 2.0 and Polygon try to increase TPS and keep the fee low using two different solutions. ETH2 solves it by scaling horizontally by dividing the network up into shards, whereas Polygon (using ETH1 code) solves it by scaling vertically by requiring the client/node to be a powerful machine with big SSD space. Both uses proof-of-stake to cap the fee ceiling..
Comparing Polygon today to Ethereum tomorrow is a bit unhelpful. We can't Project Polygon forward 2 years because I don't think their roadmap goes out that far and we would need to do that to expand on this discussion.
I am sure there are more but several possible futures spring to mind:
Among all the solutions created to scale the ecosystem built on Ethereum, the Polygon Network has gone the farthest, solving not only the problem of low bandwidth and high gas fees but also the problem of fragmentation of blockchains and protocols that do not interact well with each other. While ETH 2.0 will solve many of the issues currently congesting the network, the Polygon team has some great partnerships, including working alongside the Eth development team, and there will always be room for players to build upon the network who offer cheaper transactions, interoperability and a great developer experience. This is why I believe Polygon will continue to be a major player in the space with major room for growth in the coming years.
TikTok is moving into e-commerce. The company announced yesterday an expanded partnership with e-commerce platform Shopify, as well as a pilot test of TikTok Shopping among select Shopify merchants across the U.S., U.K. and Canada in the weeks to come.
LinkTree breaks your analytics funnel, lowers your SEO score and damages your brand image. If you're a Shopify store owner, read this...