[P1 Fund Asset] - Polygon (MATIC)
Author: @Pathfinder0x18D
⚠️Disclaimer: Not Financial Advice//Do Your Own Research!⚠️
⚠️Disclaimer: The Pathfinder P1 Crypto Invesment Fund does hold MATIC⚠️
OVERVIEW
There has been much debate about Ethereum, competing L1s and L2s, and what is the best countenance to manage the trinity of scalability, security, and decentralization. Entirely new ecosystems of decentralized applications (dAPPs) are being formed on non-Ethereum chains and various L2 solutions, allowing users to enjoy the same DeFi experience with lower gas fees. BSC and Polygon are such examples.
Gas fees on Polygon are lower, for sure. The number of daily active transactions on Polygon far exceeds Ethereum, yet total gas fees paid per day never rose above 10K USD. By contrast, Ethereum users spend as much as 7 million USD per day just to transact.
Polygon is a platform designed to support infrastructure development and help Ethereum scale. Its core component is a modular, flexible framework (Polygon SDK) that allows developers to build and connect Layer-2 infrastructures like Plasma, Optimistic Rollups, zkRollups, and Validium and standalone sidechains like the project's flagship product, MATIC POS (Proof-of-Stake). Polygon rebranded from Matic Network in February 2021 and pivoted towards supporting multiple Layer-2 infrastructures. It will continue to support the Matic POS sidechain and Plasma-based payment system, which currently hosts over 90 applications.
KEY TAKEAWAYS
ETH has dominated the early days of the digital asset space and is the predominant Layer-1 blockchain. But with its success has come network congestion and high gas fees (gas is what fuels the decentralized transactions).
Polygon (MATIC) aims to reduce network congestion by allowing users to settle transactions on a second layer blockchain…without compromising security.
Polygon (MATIC) speeds up transactions by 100x and reduces transaction costs to fractions of a penny.
Most importantly, Polygon (MATIC) plugs right into Ethereum. Ethereum users can transfer assets between the two networks via a bridge. And they
can do so faster and cheaper. Polygon (MATIC) can link to Ethereum via Plasma. It’s a side chain-like framework that