In May of this year, Polygon Crypto (MATIC) entered the TOP-15 of CoinMarketCap with a market capitalization of about $ 17 billion, and in December, Bitwise Asset Management launched a fund based on this token.
The service for buying cryptocurrencies Itez talks about the prospects for Polygon Crypto and the reasons for the popularity of second-tier solutions.
Workarounds: Why tier 2 scaling solutions are needed
Ethereum’s throughput is about 30 transactions per second (TPS). At the same time, netizens actively use DeFi protocols and trade NFTs. As a result, at the time of this writing, the number of unconfirmed transactions in Ethereum is 190,000.
To increase the throughput of Ethereum, users are launching second-level solutions (Layer 2, L2) on top of the blockchain , which process transactions outside the main network. They can be divided into two types:
state channels – solutions that allow transactions to be made outside the main network (off-chain). The latter acts as a “judge” – it finalizes transactions by including them in blocks. Examples of state channels are the Lightning Network in Bitcoin and Litecoin, as well as the Raiden Network in Ethereum.
sidechains are separate networks that are tied to the “parent” blockchains. Users can perform transactions with tokens and cryptocurrencies on the sidechain and, if necessary, return them to the original network. Examples of such solutions are Liquid Network in Bitcoin and OMG Network in Ethereum.
Another sidechain for the Ethereum ecosystem, Polygon Crypto, was launched by developers Sandeep Nailwal, Gainti Kanani, Anurag Arjun and Mikhailo Beli in 2017 under the name Matic Network.
In February 2021, the Matic Network developers renamed the project to Polygon Crypto and presented an updated project development strategy, according to which the L2 solution will gradually turn into a multi-chain system.
Polygon Crypto Today: Focus on DeFi and NFT
The Polygon Crypto architecture allows different L2 solutions to interact with each other, preventing the creation of siled systems.
“Developers no longer have to make trade-offs in terms of speed, scalability, or tooling. The Polygon Crypto L2 aggregator will provide an opportunity to focus on building applications with real value and without the current limitations of Ethereum, ”says Polygon.
Also Read : Polygon crypto awarded white hat hacker with $3.46 million to avoid $ 24 billion exploit
At the time of publication, the project supports second-level solutions Polygon PoS and ZK-Rollups . In the future, the developers will add Optimistic Rollups and Validum Chains to them.
The cost of transactions on the Polygon Crypto network is much lower than on Ethereum. At the time of publication, for the transfer of NFT to Ethreum, you need to pay more than $ 51, while in Polygon – $ 0.00591.
Users pay Polygon fees in the native MATIC token. It can be bought on dozens of centralized and decentralized exchanges, as well as various exchange services.
The service for buying cryptocurrencies Itez added support for MATIC in the wake of the growing popularity of this token.
“Polygon is one of the largest and fastest growing L2 solutions, which recently surpassed Ethereum in terms of the number of active addresses. We believe that the demand for the native MATIC token will only grow. Our goal is to give users the easiest and most profitable way to purchase it, ”comments Itez Product Manager Igor Kachura.
The service sends MATIC directly to Polygon – clients do not pay mainnet fees. Itez also supports Bitcoin, Ethereum, TON Crystal, Tron, and Tether.
According to the analytical service AwesomePolygon Crypto, there are over 170 NFT projects running on the sidechain, including OpenSea and Decentraland. These projects and blockchain games are promoted by the Polygon Studios division.
The DeFi ecosystem of Polygon Crypto has 95 projects with a total value of locked funds (Total Value Locked, TVL) of about $ 4.6 billion. Among them, Aave and Curve are the leading DeFi protocols in terms of the amount of blocked funds.
What will happen to L2 solutions after the transition to ETH2
In an article for Cointelegraph, Sandeep Nailwal notes that the transition to Ethereum 2.0 will increase the network speed to 50 TPS, and the launch of sharding to 3000 TPS and higher.
This bandwidth will allow Ethereum to compete with Visa and PayPal. However, Nailwal considers it insufficient for solving user problems and unlocking the potential of the network:
“Currently, there are decentralized exchanges, NFT markets and blockchain games on the market. They require much more frequent and complex transactions that most payment services cannot handle. In the case of global implementation, blockchain applications will not even have enough 3000 TPS ”.
He is confident that the demand for L2 solutions will not disappear even after Ethereum’s transition to PoS. At the same time, the use of such solutions in the second version of the protocol will increase the performance of the blockchain up to 100,000 TPS