Polygon

What Is Polygon?

Polygon is a “layer two” or “sidechain” scaling solution that runs alongside the Ethereum blockchain — allowing for speedy transactions and low fees. MATIC is the network’s native cryptocurrency, which is used for fees, staking, and more. You can buy or sell MATIC via exchanges like Coinbase.

What Is Matic?

Polygon's own coin, dubbed MATIC, is used to pay network fees, staking, and governance (which means that MATIC holders get to vote on changes to Polygon). Additionally, you can purchase and sell MATIC on Coinbase and other exchanges.

MATIC is a reference to an earlier period in Polygon's development. Developers rebranded as Polygon in early 2021 after debuting as Matic Network in October 2017.

How Does It Work?

The Polygon network enables many of the same functions as the main Ethereum network, but at a fraction of the cost. You can experiment with decentralized exchanges such as QuikSwap or SushiSwap, yield-generating loan and savings protocols such as Aave, NFT marketplaces such as OpenSea, and even "no-loss reward games" such as Pooltogether.

The network's low costs and near-instant transactions make it a good place to obtain real-world experience with DeFi protocols. (Keep in mind that DeFi can be quite volatile – invest only what you can afford to lose, especially as a beginner.)

Imagine Polygon like to an express train on a metro system - it follows the same path as a conventional train but has fewer stops and hence travels significantly faster. (In this scenario, the Ethereum main blockchain corresponds to the local railway.) Polygon creates this fast parallel blockchain and connects it to the main Ethereum blockchain using a variety of technologies.

Polygon has a proof-of-stake consensus process to generate new MATIC and safeguard the network – which implies that staking is one way to earn money on MATIC you own.

• Validators perform the heavy lifting – they validate and add new transactions to the blockchain. They may receive a percentage of fees and newly developed MATIC in exchange. Becoming a validator requires the operation of a full-time node (or computer) and the staking of your own MATIC. You risk losing some of your staked MATIC if you make an error or act deliberately (or simply if your internet connection is flaky).

• Delegators have MATIC that is staked indirectly through a trustworthy validator. This is a far less-committal variation of staking. However, investigation is required - if the validator you choose is malicious or makes errors, you risk losing some or all of your staked MATIC.