Polygon, the Ethereum turbo

Ethereum has great technology, but it lacks scaling capabilities to keep up with demand as users multiply. Fortunately, Polygon has a solution.

The gaps of Ethereum

Ethereum has brought all kinds of advancements to the cryptocurrency space, including smart contracts and high-yield decentralized applications. However, it still faces 3 major challenges.

  • Low throughput issue: Ethereum can only handle around 30 transactions per second. Considering the number of people that are now using ETH, this number is becoming considerably low. It looks absurd compared to other blockchains such as Cardano which can handle 250+ transactions per second, Avalanche coming at 4’500 or even Solana can go up to 65’000.
  • Ethereum blockchain is not extremely user-friendly, as extremely high costs occur. After all, you are bidding against the many people that want their transaction done now, which makes transaction costs rather expensive. Indeed, as of today, sending your friend USD1 worth of ETH will cost you USD20.
  • Ethereum network presents blockchain developers with limited options. As all Ethereum projects run on the same network and have similar throughput, this means that they all share Ethereum’s issues.

What if there was another blockchain that leveraged all the advantages of Ethereum while being able to offer higher throughput and lower transaction fees?

Polygon ecosystem

Introducing Polygon

In 2016, three Indian developers wanted to find a solution to Ethereum’s problems, which resulted in the creation of Matic, now rebranded as the Polygon network.

Polygon is a layer 2 scaling platform (meaning a secondary framework built on top of an existing blockchain system) that allows Ethereum to tackle the challenges while maintaining its advantages.

The primary focus of Polygon is to increase the usage of DeFi tools and applications by connecting blockchains together. As of now, the Polygon network hosts well over 3’000 decentralized applications (dApps), out of which 80 big names have migrated from the Ethereum blockchain.

The similarity between Ethereum and Polygon makes it very easy for developers to migrate their projects, either to Polygon or other Ethereum Virtual Machine (EVM) blockchains. EVM is the actual code ran by computers around the world to carry out the blockchain’s smart contracts. Polygon has one of these EVM, but so do Binance, Avalanche, and a few other big networks.

Bringing scale to Ethereum

Most people see the Polygon proof-of-stake chain simply as a side chain to Ethereum. The essential is that it is much faster, being able to handle way more transactions per second, bringing costs down for the end-user.

However, the Polygon network is more than just a side chain.

Polygon solutions

The core idea of Polygon is to equip developers with user-friendly, flexible tools. Polygon is not just a blockchain, but a series of blockchains that will help scale Ethereum. Once successful, developers will be able to create all sorts of chains linked to the Ethereum network, but much more efficiently. And these side chains are only what they have come up with so far. Polygon aims to come up with many more solutions to help scale Ethereum technology.

Most people will define Polygon as “Ethereum, but with super-cheap gas fees”: indeed, the USD20 fees on Ethereum cannot fight the fraction of a penny on Polygon. What is also great about this is that users can try out new apps without losing dozens of dollars in transfers.

How does Polygon work?

Polygon is driven by a layer 2 scaling solution and a proof-of-stake protocol that serves as what is called a “commit chain” – or a chain working alongside another chain – to the main Ethereum blockchain.

The Polygon commits chain groups clusters of transactions and processes them all together before sending the data back to the main Ethereum chain. For example, instead of selling a video of all the live transactions, Polygon only sent snapshots of what was essential every now and then, so that the Ethereum chain can still follow the course of what is happening without having to do the processing itself. And the speed is greatly increased, as the Polygon blockchain, like Solana, can process up to 65’000 transactions per second.

Some experts predict that a time will come when developers host thousands of chains that will work hand in hand with Ethereum – or maybe other major blockchains – to increase throughput all the way up to millions of transactions per second.

The Polygon token

The Polygon network has a token called Polygon, (previously called Matic) which has been trading at around USD1.47, with a market capitalisation of around USD11 billion.

Polygon chart 28.02.2022

Polygon tokens have a total supply of 10 billion tokens, of which 75% are already in circulation. The difference between these numbers is the tokens locked in for staking and other tokens with a time-release schedule.

Developers sold around 3.8% of the market capitalization at launch, back in 2017. They then sold another 19% at an initial exchange offering. As for the rest of the supply, the development team kept 16% for themselves and gave 4% to advisors. Staking rewards come to around 12%, the ecosystem has 23.3%, and 22% went to the Polygon Foundation.

The fact that Polygon tokens are printed to reward stakers technically makes it an inflationary asset for now. However, Polygon does have a limited supply and will soon implement its version of EIP1559. What this means is that based transaction fees will effectively be burned, meaning that Polygon will eventually become a deflationary token. But how will stakers be rewarded when there is nothing more to burn? The developers team hopes that extra transaction fees – which users add to prioritize their transactions – will be enough to incentivize validators.


Polygon should be remembered as a blockchain that tries to grasp all the advantages of Ethereum while accelerating its processing speed. In other terms, it is interoperability and scaling framework for building Ethereum-compatible blockchains. Its technology is believed to be robust, and the price of its coin makes it a relatively friendly entry point into cryptocurrencies, though investors should beware that given that it is not one of the two main players (Ethereum and Bitcoin), the project could be exposed to more uncertainty. The token could have a reasonable investment potential and if you like the direction but remember the golden rule of crypto – to not put in more than you are comfortable losing.

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