Polygon: Could this be the Ethereum saviour?

T

he Polygon protocol makes it possible to connect with Ethereum compatible blockchain networks. As decentralised finance has risen in popularity, transaction fees have increased and transfer have slowed as a result of network congestion. Polygon seeks to address many of the shortcomings that have proved problematic for Ethereum.

In this guide:

What is Polygon?

Polygon is a layer 2 blockchain ecosystem (built on the Ethereum network). It sets out to fix the scalability problems associated with Ethereum. By speeding up the processes on the Ethereum blockchain, it is possible to make operations more efficient and reduce transaction fees.

Polygon has been referred to as the internet of the Ethereum blockchain.

 The utility token used by the network for governance, staking and payments is known as $MATIC. At the time of writing, Polygon is priced at $MATIC - $0.9167.

What is the history of Polygon?

Work on what was originally known as the MATIC network begin in October when deficiencies were identified with the Ethereum network.  It was initially known as the MATIC Network before being renamed Polygon.

Polygon achieved funding in 2019 as a Binance Initial Exchange Offering (IEO), a fundraising opportunity that is administered by the exchange. 

The co-founders of Polygon are Anurag Arjun, Sandeep Nailwal, Mihailo Bjelic and Jaynti Kanani.

In April 2021 prominent cryptocurrency project Aave launched on Polygon which significant increased the price of the $MATIC token.

What is meant by layer 2 solutions?

Layer 2 solutions describe secondary projects (either frameworks or protocols) that are constructed on top of an existing blockchain network. The main objective of a layer two protocol is to solve the transaction and scaling issues posed by the primary blockchain network.

The likes of Bitcoin and Ethereum have both required layer 2 solutions. The rapid growth of both these networks has led to the need for these scaling solutions.

How much can my Polygon earn?

There are a number ways in which you can earn a return from your Polygon depending on your risk appetite and investment complexity.

The following table lists centralised saving organizations that will pay a rate of interest on Polygon assets on a flexible terms basis:

The following table lists centralised saving organizations that will pay a rate of interest on Polygon assets that are staked:

Finally, the last table lists decentralised organizations that will pay a rate of interest on Polygon assets that are used in yield farming:

Polygon FAQs

Jonathan

An editor at Coincrop

View articles

Jonathan is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.