Polygon: Could this be the Ethereum saviour?

Polygon: Could this be the Ethereum saviour?

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Jonathan
Jonathan

An editor at Coincrop


25 Apr 2022 | 6 min read
50,278 views

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:

Disclaimer: All of the information written on Coincrop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.

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.

The Polygon co-founders

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:

OrganizationDeposit assetsReward assetsAPY Rate
Nexo

Saving

Deposit PolygonPolygon (MATIC)

Earn NexoNexo (NEXO)

16.0% - flexible

Nexo

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

14.0% - flexible

Swyftx

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

12.8% - flexible

MyContainer

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

12.5% - flexible

Trofi

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

10.3% - flexible

Bit2Me

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

10.0% - flexible

Finblox

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

7.30% - flexible

Kriptomat

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

7.30% - flexible

Pintu

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

7.00% -

0-20000 MATIC, flexible

SwissBorg

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

6.22% - flexible

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

OrganizationDeposit assetsReward assetsAPY Rate
OKEx

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

21.3% - fixed (15 days)

OKEx

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

12.0% - fixed (60 days)

OKEx

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

10.1% - fixed (90 days)

Ascendex

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

10.0% - fixed (5 days)

OKEx

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

8.55% - fixed (30 days)

Uphold

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

7.00% - flexible

BTSE

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

5.48% - fixed (60 days)

BTSE

Staking

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

5.12% - fixed (30 days)

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

OrganizationDeposit assetsReward assetsAPY Rate
Bunny

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit QuickSwapQuickSwap (QUICK)

Earn Pancake BunnyPancake Bunny (BUNNY)

120% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit MoonbeamMoonbeam (GLMR)

Earn Beefy.FinanceBeefy.Finance (BIFI)

21.6% - flexible

StellaSwap

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit Wrapped MoonbeamWrapped Moonbeam (WGLMR)

Earn StellaSwapStellaSwap (STELLA)

21.3% - flexible

Bunny

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit USD CoinUSD Coin (USDC)

Earn Pancake BunnyPancake Bunny (BUNNY)

13.3% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit FantomFantom (FTM)

Earn Beefy.FinanceBeefy.Finance (BIFI)

11.0% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit TetherTether (USDT)

Earn Beefy.FinanceBeefy.Finance (BIFI)

7.40% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit DaiDai (DAI)

Earn Beefy.FinanceBeefy.Finance (BIFI)

6.01% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit BNBBNB (BNB)

Earn Beefy.FinanceBeefy.Finance (BIFI)

5.07% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit USD CoinUSD Coin (USDC)

Earn Beefy.FinanceBeefy.Finance (BIFI)

3.10% - flexible

Beefy Finance

Yield Farming

Deposit PolygonPolygon (MATIC)Deposit EthereumEthereum (ETH)

Earn Beefy.FinanceBeefy.Finance (BIFI)

2.63% - flexible

Polygon FAQs

The gas fee is a transaction charge levied for using the Polygon network. The charge is imposed in order to reward the nodes that operate the network and also limit the possibility of congestion or spam.

Decentralised exchanges such as Binance or Coinbase will allow you to purchase Polygon using fiat currencies.

No. Polygon will only ever complement Ethereum. The Ethereum blockchain is required for Polygon to function.

This question has been posed by many as the improvements in Ethereum led to the development of Polygon. Whilst transactions will become faster, it is felt that gas fees will still by expensive.

Polygon is not the only blockchain that seeks to address the limitations of Ethereum. The likes of Cardano, Solana, Binance Smart Chain, Harmony etc. have also been created with similar objectives to Polygon.


Jonathan

Jonathan

An editor at Coincrop
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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.


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