Polygon has been one of the most famous blockchain in the crypto space, especially since its rebrand from being called Matic Network.
The sudden rise in popularity came after the blockchain started to brand itself as a layer two blockchain for Ethereum to help it scale the blockchain, which translates to cheaper fees and faster speed for Ethereum users.
Sadly, the dominance of Polygon in the layer two blockchain space has been slowly decreasing since there are many new layer two blockchains that offer higher scalability than Polygon.
Luckily the founders pivoted the blockchain into its own ecosystem, since the infrastructure of the blockchain itself allows it to become its own layer one blockchain.
This happened around 2023 until now where there are many new upgrades and updates that have been done to the blockchain to keep it relevant by giving more use cases so that transaction volume remains high.
In this article we will be looking deep into the Polygon Blockchain to see what it is now and how it is doing as its own blockchain.
What is Polygon?
Polygon started as The Matic Network which is a blockchain that was created in 2017 with its main product called Plasma Chain.
Plasma Chain is a side chain that was created to help other blockchains process their transaction, but focuses on increasing the main blockchain’s security rather than scalability.
The idea came after security became one of the most talked about topics, just like scalability is today, which happened after the infamous Ethereum Hack in 2016.
Sadly after focusing on being a side chain and most layer one blockchain enhanced their own security, The Matic Network was left with not much to do, which is why they rebranded in 2021 into Polygon.
Polygon itself started as a Proof of Stake Blockchain with plans to roll out two layers of blockchain, one was to focus on helping Ethereum process transactions and the other was to be its own layer one blockchain.
This rebranding plan came up after scalability became an issue after more people started getting into crypto and complaining that one of the biggest blockchain in the crypto space, which is Ethereum, is too expensive and too slow to use.
Since Matic Network started as a side chain, it continues its nature to then be rebranded as a layer two blockchain for Ethereum with Polygon, where layer two blockchains and side chains are essentially the same.
After the emergence of Polygon, the team behind it started an official team behind it which is called the Polygon Labs.
There are 10 Co-Founders of the Polygon Labs which is filled by individuals that have high capabilities and experience in the tech space.
After Polygon was launched, the team started developing a new mechanism to be implemented on the layer two blockchain which was called zero knowledge proofs or zk-Proof which is a roll up technology that is designed to help scale the blockchain.
This was launched in 2022 where the focus is to help reduce transaction time and fees of Ethereum transactions by a lot.
It successfully got Ethereum transaction fees down to around $1 with an execution speed of less than one minute, but sadly in 2023 the layer two blockchain trend started getting bigger and Polygon suddenly had a lot of competitions.
With the existence of other layer two blockchains like Arbitrum and Optimism who can process transactions for less than 10 seconds and fees for less than $0.01 Polygon slowly loses its dominance.
On top of that, with upgrades on Ethereum such as the Dencun Upgrade, suddenly Polygon was not the star of the Ethereum Layer Two Blockchain show anymore, which is why it decided to pivot into its own ecosystem.
Currently, there are more than 200 projects being built and integrated on top of the Polygon Blockchain as its own ecosystem.
The sudden increase of Polygon’s ecosystem also started because of the existence of Polygon Ventures which is Polygon’s own early stage venture capital to help support entrepreneurs and developers that want to build on Polygon.
How Does it Work?
After focusing on its own blockchain, Polygon has done some things that are considered an upgrade to its infrastructure.
Before the upgrade, Polygon was a monolithic blockchain with a Proof of Stake consensus mechanism but later transitioned into a modular blockchain with one layer focusing on its own and one processing Ethereum transactions.
While its own layer remained a Proof of Stake Blockchain, as mentioned before the second layer implements a zkProof mechanism.
This essentially means that instead of Ethereum sending its transaction one by one to Polygon, the transactions are all gathered into groups and being sent to Polygon which makes the process faster.
Also, because of this Polygon treats Ethereum only as an execution layer where transactions are executed and as a data availability layer where data is stored.
All the validation process happens on Polygon which saves less cost because people do not have to pay the initial cost of Ethereum validators that was high, and lese storage space that also makes the gas fees on Ethereum high.
This however is not enough as now Polygon has upgraded its blockchain into a four layer modular blockchain.
Currently there are for layers on the Polygon Blockchain which are:
- Staking layer, the layer that is used to stake the coin of Polygon which is MATIC as one of the requirements to be a validator.
- Aggregated layer, which is used to communicate with other blockchains, not only Ethereum but all EVM and non-EVM ones in the future.
- Execution layer, which is used as the layer to execute transactions from the Polygon Blockchain as well as receive transactions from other blockchains.
- Proving layer, which is used to validate transactions from other blockchains that use Polygon as a layer two blockchain or a side chain to increase their scalability.
All of these layers however are not yet implemented as it is still in the early development stage as part of the Polygon 2.0 plan that was rolled out in late 2023.
Development Progress
Currently the focus of Polygon is to transition into Polygon 2.0, so most of what they have been doing are upgrades and tests around the new mechanisms that are going to be implemented.
Looking at the roadmap, there are four things that have been rolled out as the progress for Polygon 2.0. These four things are:
- The Aggregated layer for the blockchain which was just launched in January 2024 with tests and upgrades still being implemented.
- The Polygon CDK or Chain Developer Kit for Developers who want to build on top of the Polygon Blockchain, which was done in late 2023.
- The EVM ZK mechanism to implement zkProof Roll ups not only when communicating with Ethereum but also with other Ethereum Virtual Machine based blockchains, which was also done in late 2023.
- An introduction towards the new four layer infrastructure which was done in late 2023.
There are also two more things that will come but it is still sealed tight as Polygon Labs want it to be a surprise for the community.
Another thing to note is the launch of the digital identity product which is a way for the Polygon Blockchain users to use a decentralised identity so that they do not have to give all the sensitive information that normal identity verifiers usually request.
Also with this, users can now integrate Web2 and Web3 identity for those who want their data to be linked to their Web3 wallet address.
Lastly, in 2024, Polygon also announced the current development of Polygon Miden, which will probably be the execution layer that was talked about in the four layer infrastructure plan of Polygon 2.0.
Transition from MATIC to POL
With Polygon 2.0, Polygon Labs also plans to change the whole utility coin of the blockchain which is currently MATIC.
Polygon Labs has launched a new coin called POL which will require users to migrate their MATIC to POL as MATIC will no longer exist after the migration process is done and the Polygon 2.0 upgrades have all been rolled out.
Looking at the whitepaper of POL, it can be seen that the token economics of POL will be the same as MATIC as the value of MATIC to POL is one to one, meaning 1 MATIC equals 1 POL.
POL is introduced as a sign of the Polygon 2.0 era, where it mainly acts as a grand gesture, even though most of the token economics are the same.
If you are a holder of MATIC, you need to migrate to POL by using your wallet and transferring your MATIC to the migration smart contract, which will automatically send you POL back in the same amount.
Don’t worry! There is no deadline for this migration process as Polygon Labs did not specify when is the last date to do this migration. If you want to try the migration process to use POL, you can follow the guide here, written by Polygon Labs.
However, it is important to be careful! As different MATIC that exist on different blockchains have different migration smart contract addresses that you need to specify to your own condition.
If you don’t feel like doing the migration process yet, that is also okay, as the blockchain still uses MATIC as its primary gas fee payment and has not been using POL intensely.
Looking at the last transaction on the blockchain at the time of writing, it can be seen that the gas fee is still paid in MATIC so POL has not been actively introduced yet to the current version of the Polygon Blockchain.
But this might change as the upgrades to transition into Polygon 2.0 become more complete, so if you have time, it is better to do the migration process to POL.
Conclusion
Overall, Polygon is actively developing its own ecosystem with the transition from the current Polygon to Polygon 2.0.
If you are a developer who is interested in building on Polygon, it is good to read the documents on the Polygon site to better understand how the blockchain will work.
If you are a holder of MATIC, it is better to migrate your holdings to POL so that when the time comes for the transition, you won’t panic if Polygon Labs suddenly puts a deadline.
Watching Polygon’s development will be interesting for the next couple of months, especially hedging into the bull market.
So, if you already own MATIC or POL, it is better to keep holding as the transition might be one of the biggest positive sentiments that Polygon will experience to date.
