The world of blockchain and cryptocurrency can seem mysterious and daunting to many. Yet when taking a closer look at the functionality and purpose of many of its projects, it makes it easier to relate to and understand the necessity of these projects.
Polygon was built as a platform to help with making it simpler for people to understand and effectively create and use dApps or decentralized applications. It’s a layer 2 protocol, meaning that it’s built on top of a layer one or primary blockchain; in this case, that is Ethereum. Ethereum had helped to revolutionize how we process transactions and monetize cryptocurrencies but was quickly plagued with slow transaction times and high fees.
Polygon set out to attach itself on top of this platform and solely works to maximize the usage of Ethereum while eliminating its two major pain points of slow transactions and high fees.
How it resolved the pain points
When you work with the Polygon platform, you’re still working with the same technology as the Ethereum Blockchain. That means you have the same benefits that come with using the Ethereum chain, which is primarily security and structure, but at the same time, it’s improved upon with enhanced flexibility and scalability.
Sovereignty or ownership comes from the use of its own native token, known as MATIC, that also acts as a governance token for the entire platform. That means users who hold it can vote on future projects and can help with transaction verification through a consensus mechanism. In addition, without diving into the technical aspect, users can pledge their tokens for additional tokens as rewards to help verify the transactions.
The improvement with Polygon is immediately seen as the average block processing time (transaction processing time) is around two seconds. In addition, because of this unique approach that Polygon has taken to verify these transactions, the transaction fees remain low, at around a penny per transaction.
How it makes money
Even with such low transaction fees, the volume and functionality are trending quite well in cryptocurrency. The initial token launch was a way for it to initially raise funds when it started offering its native token with a market cap of nearly $8 billion.
It’s mainly been focused on its use case as a secure transactional platform and has since been able to partner up with major payment companies such as Stripe. This is one of the greatest use cases to combine traditional finance with the new financial security and privacy that comes with using blockchain-based technologies.
In addition, within the NFTs or Non-Fungible Tokens ecosystem, Polygon continues to take on additional market share due to how much more cost-effective and stable it has been over the primary platform producing NFTs. This can be seen with its recent partnership with Instagram.
Non Fungible Tokens are a way of digital security that has shown promise in digital art and blockchain-based gaming. It’s a way to prove ownership through the power of cryptocurrency without the possibility of hacking it.
Stay tuned to continue to see Polygon continue its mission as a way to bring the mainstream together with blockchain.