What is the Polygon Network?
The race to achieve total decentralization and bring all industries into the crypto-space continues. Top projects from the leading smart contract blockchains such as Ethereum, BSC, and Polygon have continually improved in regards to decentralized applications, giving developers the ability to build apps quickly and cheaply on their respective blockchain networks. However, unlike Binance Smart Chain and the Ethereum ecosystem, the Polygon Network has not received its fair share of popularity amongst the crypto community.
Binance Smart Chain (BSC) was founded in August 2020 and massively gained in popularity in the first quarter of 2021 because of the high gas fees and slow transaction confirmations on the Ethereum blockchain. Binance Smart Chain operates similarly to the Ethereum ecosystem, because it is EVM-compatible, meaning Ethereum smart contracts are fully compatible, with additional tweaks to make the blockchain faster. So it’s no wonder why we have seen BSC far surpass Ethereum in daily transactions.
On the other hand, Polygon, which was formerly known as MATIC, is a developer-first hybrid POS+Plasma side-chain on top of Ethereum, enabling Ethereum developers to scale their dApps for large-scale usage. Polygon, popularly known as “the Ethereum internet of Blockchains;” is a network and framework for creating and linking Ethereum-compatible blockchains. Polygon also noticed the Ethereum network’s disadvantage, earlier than Binance did with BSC and set out to build an alternative platform for developers.
The initial idea behind the MATIC network was just a simple layer-2 scaling solution for Ethereum. However, as the network expanded, the MATIC team had other ideas that could do far more than leverage Ethereum’s network weaknesses and provide more value for developers in the decentralized space.
So, the project was rebranded, and it was renamed Polygon.
Growth of the Ecosystem
The Polygon Network, which was one of the early Ethereum layer 2 solutions, has grown significantly in the past few months. To give an example, on June 13th, SushiSwap, a popular automated market maker, had around 15,000 unique wallet addresses on its Polygon dApp, while that number was only around 4,500 on its Ethereum dApp. DappRadar published a report on June 10th, that mentioned the popular DeFi lending dApp Aave had a daily average of $6.75 billion in transaction volume on Polygon, compared to $2.48 billion/$2.28 billion for Aave version 1 and 2 on Ethereum.
The rebranded Polygon Network allows users to create decentralized applications and allows developers to create their blockchains. To make it more comfortable for new developers, the network has a suite of tools that will enable and empower developers to create ultra-scaling and high-performance blockchains. Transactions are also extremely cheap and relatively quick on Polygon, which has led to its massive growth.
The best part of both ecosystems is that they support the Ethereum Virtual Machine (EVM); which has certainly helped contribute to their fast pace of growth. Support for the EVM allows interoperability between BSC, Polygon Network, and the Ethereum Network. So, developers can conveniently migrate their dApps from the Ethereum network to either Polygon or BSC and vice versa.
The BSC ecosystem has so far experienced considerably more growth than the Polygon Network, considering the age of the two and how popular they are in the crypto community. However, with the change of name also comes new capabilities with the Polygon Network.
How Big is the Ecosystem?
There are currently over 400 projects according to the Polygon Network website. There are stable coin protocols such as DAI or FRAX, oracles such as Chainlink and The Graph, decentralized exchanges like PolyCrystal and the recently launched Jetswap, yield optimizers such as Beefy and Autofarm, lending protocols such as Curve and Aave, and so much more.
Polygon has been adopted by over nearly 800k users that have done over 76 million transactions. The native token for Polygon Network is MATIC, which has grown to a massive $5.6bn, and has grown over 10,000% over the past year. It currently ranks among the top 20 cryptocurrencies in the world in marketcap, and has become a massive success in India.
Consensus Mechanism
Polygon makes use of the Proof-of-Stake (PoS) consensus mechanism, while BSC uses Proof-of-Stake-Authority (PoSA). Both consensus mechanisms fix the major issue Ethereum encountered as the ecosystem expanded; high gas fees and slower transactions.
For the PoS consensus mechanism, validators are chosen based on how a user in the community is committed to the network; so the higher the stake, the higher the chance to be selected as a validator.
For PoSA system used by the BSC ecosystem, it combines the effectiveness of PoS and PoA. Proof of Authority selects validators for consensus base on trustworthiness.
Transaction Fees and Confirmation Times
The transaction fees for both the BSC and Polygon Network are substantially lower than on the Ethereum Network. This is all thanks to the consensus mechanism adopted by both ecosystems. The consensus mechanism helps with speed and scalability and the entire purpose of the Polygon Network is to increase the speed of the Ethereum Network while maintaining Ethereum’s security. Polygon achieves this is by creating a copy of the Ethereum Network called a child-chain, that’s capable of being over 500 times faster than Ethereum.
Final Thoughts
The BSC and Polygon ecosystem are very similar, they both offer tremendous savings in money and time to decentralized finance users, although they function differently. With the latest advancements on both blockchains, there are a lot of high expectations. We hope for more cross-chain solutions that levy the strength of both ecosystems and continue to grow the decentralized finance market.