9 May, 23

What is Polygon?

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Finn Judell

Decentralised applications (dApps) have the potential to revolutionise a wide range of industries, from finance and healthcare to supply chain management and digital identity. However, the development and deployment of dApps are often hampered by the high fees and slow transaction times that are associated with existing blockchain networks. This can make it difficult and expensive for developers to build and deploy dApps on those networks, limiting their potential success and adoption. In this article, Innovation Analyst Finn Judell covers the scope of what is Polygon, as a blockchain platform to build scalable, decentralized products.

What is Polygon?

Polygon (previously MATIC network) is a blockchain platform owned by Polygon Technology, a Mumbai-based company founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun and Mihailo Bjelic. A common misconception about Polygon is that the technology is a single blockchain scalability solution. In reality, Polygon is an Ethereum Virtual Machine (EVM) compatible ecosystem, fitted with an array of blockchain developer tools with Polygon POS being their flagship product.

Polygon POS Infrastructure

Polyon POS (Proof of Stake) is the most popular solution provided by Polygon Technologies, seeing widespread adoption as an Ethereum-compatible chain compared to alternative solutions on the market. This network utilised the PoS consensus algorithm before Ethereum switched over to PoS on September 6th, 2022. Although Ethereum now uses a similar underlying consensus algorithm, Polygon still currently plays a valuable role in solving scalability issues faced by Ethereum. Polygon POS is not a layer 1 or a layer 2, but a combination of the two – embracing the speed and flexibility of a rollup network while simultaneously harnessing the security of the Ethereum blockchain. Polygon POS utilises three layers that work to secure the network and validate transactions: Bor Chain, Heimdall Chain and the POS Validator layer.

Bor Chain (Sidechain)

Borchain is the ‘block producer layer’ of Polygon POS, responsible for aggregating transactions into blocks and running the EVM-compatible virtual machine. Simply put, this layer is a lightweight consensus algorithm that prioritises speed over network security, thereby allowing a secondary process to validate transactions securely as transactions are being processed. A subset of validators is randomly selected from the validator set to become block producers. These block producers are selected to authenticate a set amount of blocks over a certain period known as the ‘span’. After the span period, another random set of validators are selected to become block producers and the cycle continues.

Heimdall Chain (Plasma)

Heimdall Chain is the ‘verification layer’ of Polygon PoS, assuming the role of ensuring continuity across Polygon PoS and Ethereum, otherwise known as “checkpointing”. All transactions that occur on the Polygon PoS chain are checkpointed to Ethereum every 30 minutes. If the community is unhappy with the consensus provided by Polygon PoS, Ethereum validators can come together to flag a transaction as malicious and overwrite it within the checkpoint period. Additionally, the Heimdall Chain coordinates validator selection for block production, validator rewards and slashing, validator updates and asset bridging across chains.

POS Validators

Polygon POS maintains a set of smart contracts on Ethereum that manage staking functions, validator rewards and delegation management. While Polygon POS is technically permissionless, there is limited space for accepting new validators into the network. New validators can only join the active set once a currently active validator is unbound from the network. Validators on the Polygon POS chain must run a full node, which involves running both Heimdall and Bor clients. Additionally, Polygon POS validators must stake MATIC tokens as a form of collateral, hold a sufficient amount of ETH to pay for gas fees, and ensure that their node maintains a high uptime. Validators are rewarded for effectively authenticating transactions on the network and are slashed if they act maliciously or lazily. Rewards are distributed to all network participants proportional to their stake at every checkpoint with the exception of being randomly selected as a block proposer and receiving a bonus. 

what is polygon

Token Bridging

In order to gain access to the Polygon POS chain, users must bridge their assets from an EVM-compatible network to Polygon POS. A bridge is a set of contracts that assist in moving assets from one chain to another. The first step in bridging assets from a specific blockchain to Polygon POS is mapping the Root Token to the Child Token. Meaning that the token contract on the root chain (“x” blockchain) and the token contract on the child chain (Polygon POS) have to maintain a consistent connection called “mapping” to transfer assets to and from the chains.

Withdrawing assets from Polygon is a process in which the asset has to be burnt on the Polygon chain, and then the proof of this burn transaction has to be submitted to the Ethereum chain. Transactions have to be checkpointed into the Ethereum by Polygon validators which can take up to 30 minutes. 

How Polygon Solves the Blockchain Trilemma

The blockchain scalability trilemma, also known as the “scalability trilemma” or simply the “trilemma,” is the idea that it is difficult for blockchain systems to simultaneously achieve three key objectives. This concept is explained in further detail in a Zerocap article here. Polygon’s architecture ultimately aims to solve the trilemma by processing transactions in batches. To achieve scalability, transactions are validated off-chain with a set number of validators in a way that leans toward the ‘scalability’ end of the trilemma. After that, transactions are validated again in intervals. Decentralisation and security are extrapolated from Ethereum when batches are posted on the mainnet, allowing validators to dispute incorrect transactions in-between checkpoints.

History of Polygon (Matic)

Polygons co-founder Jaynti Kanani (now the CEO of Polygon) discovered the market’s need for blockchain scalability solutions in November 2017, when the Ethereum network suffered from congestion due to high demand for blockchain transactions during a popular NFT mint at the time, Crypto Kitties. Kanani teamed up with co-founders Nailwal and Arjun to build the Matic Network. The company launched its own token on the 24th of April via an Initial Exchange Offering (IEO) on the Binance Launchpad, raising $5.6 million USD. Matic’s initial product was a layer 2 solution building on an adapted version of the Plasma framework.

On the 9th of February 2021, Matic Network rebranded to Polygon Technologies. The rebranding predominantly took place as a marketing play to provide awareness to Matic users about the growing aspirations of the company as the company’s core offering shifted from a Plasma specific design to a more complex model. Additionally, the company was expanding to other verticals outside of scalabilities such as enterprise blockchain and privacy infrastructure.

MATIC Token

With reference to Polygon’s origins, the ecosystem’s native current ticker is still MATIC, which can prove confusing. MATIC is an ERC-20 token deployed on the Ethereum blockchain which acts as the native asset for the Polygon ecosystem, providing economic independence from third-party assets. The token is also used as a source of collateral to validate transactions as well as pay for transaction fees on Polygon PoS and other Polygon products.

Adoption

Polygon’s core mission is to make EVM-compatible blockchains more accessible to the masses  through scalability, modularity and customisable infrastructure. With over 53k dApps deployed on Polygon infrastructure and over 174.9 million unique user addresses – most of which utilise Polygon POS – the company is starting to fulfil its mission. Additionally, Polygon aims to be a frontier in bridging Web2 user services over to Web3, building partnerships with large corporations including Meta, Starbucks and Reddit who are utilising the technology for various services.

Summary

Polygon offers an array of services that have been widely adopted by blockchain users and developers, their POS infrastructure being the most commonly adopted. The company is currently focused on building out infrastructure on Ethereum and EVM-compatible chains with aspirations to expand toward other blockchain ecosystems over time. The company initially set out to build a blockchain scalability tool for the Ethereum ecosystem; in practice, the company developed a much larger suite of solutions. Polygon’s suite of technology has provided developers with much-needed infrastructure, resulting in increased adoption of blockchain technology worldwide.

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FAQs

What is Polygon and what is its purpose?

Polygon, previously known as MATIC network, is a blockchain platform developed by Polygon Technology. It is an Ethereum Virtual Machine (EVM) compatible ecosystem, equipped with a range of blockchain developer tools. Polygon’s primary purpose is to solve the scalability issues faced by Ethereum and other blockchains, providing a platform for the development and deployment of decentralised applications (dApps).

What is the structure of Polygon’s Proof of Stake (PoS) infrastructure?

Polygon’s PoS infrastructure consists of three layers: the Bor Chain, the Heimdall Chain, and the PoS Validator layer. The Bor Chain is the block producer layer, responsible for aggregating transactions into blocks and running the EVM-compatible virtual machine. The Heimdall Chain is the verification layer, ensuring continuity across Polygon PoS and Ethereum, otherwise known as “checkpointing”. The PoS Validators maintain a set of smart contracts on Ethereum that manage staking functions, validator rewards, and delegation management.

How does Polygon solve the Blockchain Trilemma?

Polygon aims to solve the Blockchain Trilemma, which refers to the difficulty of achieving scalability, security, and decentralisation simultaneously in a blockchain system. Polygon achieves this by processing transactions in batches. Initially, transactions are validated off-chain with a set number of validators, leaning toward the ‘scalability’ end of the trilemma. Then, transactions are validated again in intervals, with decentralisation and security extrapolated from Ethereum when batches are posted on the mainnet.

What is the role of the MATIC token in the Polygon ecosystem?

The MATIC token is an ERC-20 token deployed on the Ethereum blockchain and acts as the native asset for the Polygon ecosystem. It provides economic independence from third-party assets. The token is also used as a source of collateral to validate transactions and pay for transaction fees on Polygon PoS and other Polygon products.

What is the history and future of Polygon?

Polygon was originally known as the Matic Network, founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic. It was rebranded to Polygon in February 2021 to reflect the company’s growing aspirations and expanding services. Polygon’s mission is to make EVM-compatible blockchains more accessible through scalability, modularity, and customisable infrastructure. With over 53k dApps deployed on Polygon infrastructure and over 174.9 million unique user addresses, the company is starting to fulfil its mission.

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