Polygon and Matic: What’s the Difference

Polygon and Matic: What’s the Difference

The Ethereum blockchain is home to a wide range of different platforms, including decentralized finance (DeFi) protocols, non-fungible token (NFT) marketplaces, yield farming protocols, crypto lending, and more. With the network supporting numerous decentralized applications and financial services thanks to its smart contracts, it suffers from network congestion that can cause a spike in transaction fees and slow transactions. 

The Solution to Ethereum’s Shortcomings

High transaction fees in times of network congestion, costing hundreds of dollars, and slow transactions are some of the biggest issues faced by persons using DeFi protocols, NFT marketplaces, and other platforms built on the Ethereum network or generally transferring tokens over the network.    

Scaling solutions solve such shortcomings on the Ethereum network, ensuring quick and cost-effective transactions. Polygon is a scaling solution on the Ethereum blockchain with the capability of processing up to 65,000 transactions per second. This scaling solution makes transactions on the Ethereum blockchain affordable and fast enough by processing some transactions on its proprietary proof-of-stake blockchain. 

Polygon and Matic are often confused, especially since the project rebranded in February 2021 from Matic Network to Polygon but decided to retain the ticker MATIC for its native utility crypto token after the rebranding. In summary, Matic is the native coin of Polygon as ETH is to Ethereum. 

Polygon Explained 

Originally created in India in 2017 by experienced Ethereum developers Sandeep Nailwal, Jaynti Kanani, Anurag Arjun, and Mihailo Bjelic, Polygon is a layer-2 scaling solution (sidechain) on the Ethereum network that doesn’t modify the original blockchain network in any form. It was designed to run parallel to the main Ethereum blockchain, speeding up transactions and lowering transaction costs.  

Also referred to as Ethereum’s Internet of Blockchains, Polygon supports other Dapps that are compatible with Ethereum ensuring that they can use the platform’s secure and robust network without suffering from Ethereum’s shortcomings such as network congestion and high gas fees.  

Polygon is not the only layer-2 scaling solution on the Ethereum network. Rival platforms include Solana, Cosmos, and Avalanche. However, Polygon sets itself aside from its competitors by granting developers immense control and customization when selecting a scaling solution they deem idle for their application. For instance, on Polygon, developers can choose between optimistic roll-ups and zk-roll-ups per their needs. 

Polygon also plans to expand beyond Ethereum as it looks to advance its services as a framework for an “Internet of blockchains,” meaning that it can connect to any Ethereum-interoperable blockchain and be used to increase speeds and cut transaction costs.

What is MATIC?

MATIC is a native token of the Polygon network used to power the entire Polygon ecosystem. The token has different use cases in the Polygon ecosystem, including payment for transaction fees and staking. Users can also earn MATIC tokens by validating transactions or executing smart contracts on the Polygon network. This is done by offering some computational resources and services to the Polygon network to function as validators. 

MATIC is also a governance token on the Polygon network. Users who own and stake MATIC can vote on the network upgrades, with each vote being equivalent to the amount of staked MATIC cryptocurrency. 

MATIC tokens supply is limited, just like some other cryptocurrencies such as BTC. The supply of MATIC tokens is capped at 10 billion as per the platform’s rules. 

What’s the Difference between MATIC on Polygon and Matic on Ethereum? 

It’s crucial to note that there is a difference between a Matic token on the Ethereum network and a MATIC token on the Polygon network. Matic is an ERC20 token on the Ethereum blockchain, while MATIC is the native token of the Polygon blockchain, a secondary scaling solution on the above-mentioned network. 

The difference means that a Matic token on the Ethereum network and a native MATIC token on the Polygon network cannot be sent to the same wallet address since they are on different blockchain networks. Therefore, by sending a token minted on the Matic network on Ethereum to your Matic address on the Polygon network, you will likely lose your coin/token. However, sending a token minted on Matic on the Ethereum network to an Ethereum address (MetaMask) will be successful. The vice versa will also be successful. 

The rebranding of Polygon coupled with great developments on the network saw MATIC tokens grow in price and market cap. At the time of writing (on August 23, 2022), the token is the 14th largest cryptocurrency employing total market capitalization with a circulating supply of 8.04 billion MATIC representing 80% of the max supply as per CoinMarketCap.

Polygon vs. Matic: What is the difference?   

Polygon and Matic are often used interchangeably but have clear differences. Polygon is a layer-2 scaling infrastructure on the Ethereum blockchain, while MATIC is its native token used to power the ecosystem. Polygon was originally named Matic Network since its launch in 2019 and primarily offered plasma chains quite similar to the side chains, only that they provide greater security in exchange for running complex operations. 

The project integrated side chains and rebranded to Polygon in 2021. However, after rebranding, the project opted to retain the name MATIC for its native utility crypto token. 

The change in the name, followed by subsequent rebranding, generated some confusion in the crypto community, with numerous people considering the two to be different projects. In essence, however, Polygon is to Matic as Ethereum is to ETH. 

How Does Polygon Work? 

Polygon is a layer 2 scaling solution on the Ethereum blockchain network that functions to cut transaction costs and fasten transactions. Polygon processes some batches of transactions on its proprietary proof-of-stake blockchain containing side chains to achieve this. The blockchain can handle 65,000 transactions per second compared to Ethereum, which can process a maximum of only 17 transactions per second. 

Polygon also cuts transaction costs by processing transactions on its side chains and allows users to choose the best scaling options. The transaction fees are cut to a fraction, which is pretty affordable compared to Ethereum’s $15 average transaction fees. 

To function, Polygon operates on four layers: the Ethereum layer, the security layer, the Polygon layer, and the execution layer. 

The Ethereum Layer  

Polygon integrates a set of Ethereum smart contracts, enabling it to transmit data from Polygon to Ethereum. These smart contracts function as Polygon representatives on the Ethereum blockchain and function to facilitate staking, handle transaction finality and resolve transaction disputes. 

Security Layer 

As the name implies, the security layer functions to secure the connected Ethereum network. Security is achieved by offering validators as a service where Polygon delegates its network of validators to enable its supported blockchain network; in this case, Ethereum achieves consensus in a decentralized manner. 

The Polygon Layer  

The Polygon Layer constitutes a collection of blockchains forming an interconnected ecosystem. It’s unclear how many blockchains can connect to the Polygon layer ecosystem besides Ethereum, which is currently supported. 

Execution Layer 

The execution layer is the backbone of the Polygon network. It essentially functions to interpret and execute transactions that have attained consensus among the validators via the platform’s POS consensus protocol. The execution layer integrates several Polygon technologies, including: 

  • PoS Chain: This is the main blockchain that integrates the scalable proof-of-stake to Ethereum’s blockchain network. 
  • Plasma Chains: Plasma Chains facilitate the seamless movement of assets between different blockchain networks, including Polygon, Ethereum, and other supported blockchain networks. 
  • Zk-rollups- The function to process bundles of transactions off-chain and enhance privacy by leveraging zero-knowledge proofs. 
  •  Optimistic roll-ups- They are similar to Plasma Chains and function to expedite transactions on the Ethereum chain and achieve near-instant transactions. Optimistic roll-ups are also capable of scaling Ethereum smart contracts. 

Polygon Use Cases 

As Polygon looks to diversify beyond Ethereum, its major use case is to facilitate the seamless integration of different blockchain projects and networks into the Ethereum ecosystem. Some of the current use cases of Polygon include: 

DeFi Projects    

Polygon supports several DeFi projects built on the Ethereum blockchain. By lowering the transaction costs and the transaction time in DeFi protocols, Polygon enables DEXs to offer more liquidity since most people are encouraged to deposit into the liquidity pools. Popular DeFi platforms using Polygon include 1inch, Curve Finance, SushiSwap, QuickSwap, and Aave.

Business Support

Polygon offers business operations support to ParcelMoney– a crypto payroll and treasury management platform. Polygon supports the platform via its low-cost and scalable network built on the Ethereum blockchain.

Non-fungible Tokens (NFTs)  

On the NFTs side of the spectrum, ATARI-an NFT platform, partnered with Polygon to facilitate the platform’s growth leveraging Polygon’s low-cost and scalable network to ensure fast, safe and efficient transactions.

Closing Words 

Polygon is a layer-2 scaling solution on the Ethereum blockchain network that enables it to scale and facilitate quick transactions. Also referred to as the ‘Ethereum internet of blockchains,’ Polygon enhances the scalability, sovereignty, and scalability of Ethereum-based projects while still providing the security, interoperability, and structural benefits of the Ethereum blockchain. 

Polygon is powered by MATIC-an ERC-20 token used to pay transaction fees on the Polygon ecosystem, govern the network, and pay network transaction fees. In essence, MATIC is the native coin of Polygon, just like ETH is to Ethereum.

What is Polygon?

Polygon, previously known as the Matic network, is an Ethereum layer 2 scaling solution created to solve network congestion and reduce transactional fees within the Ether blockchain.

What is MATIC?

MATIC is an ERC-20 token based on the Ethereum blockchain. The token governs the Polygon network and is available through cryptocurrency exchanges like Kraken and Coinbase.

What are Ethereum Layer 2 Scaling Solutions?

Scalability solutions for Ethereum include sharding, Plasma, state channels, and sidechains. Sharding splits data across multiple machines, increasing throughput while sacrificing decentralization. Plasma allows smart contracts to be run with fewer transaction fees and faster processing times. State channels allow two parties to conduct transactions privately without broadcasting them publicly. Sidechains enable new applications and protocols to operate inside existing blockchains.

Is Polygon the same as MATIC?

Polygon is a network that runs on the Ethereum blockchain, and while it was previously called the Matic network, the network shifted its name to Polygon, and MATIC is the token that governs the activities of the network.