Polygon (MATIC) definition: A layer-2 scaling solution and multi-chain system for Ethereum, that aims to provide faster transactions and lower fees.

As the demand for decentralized applications (dApps) and transactions has grown, the limitations of blockchains like Ethereum in terms of speed and cost have become apparent. Polygon is a prominent blockchain scaling solution that aims to address the challenges of scalability and interoperability by providing a framework that enables faster and more cost-effective transactions while maintaining compatibility with the Ethereum ecosystem.

Formerly known as Matic Network, Polygon is a layer 2 scaling solution for Ethereum, designed to mitigate the bottlenecks of the Ethereum network. It operates as a multi-chain scaling solution that facilitates the creation of interconnected blockchain networks, often referred to as "sidechains," which are linked to the Ethereum mainnet. These sidechains are secured by Ethereum's underlying technology but operate with their consensus mechanisms, enabling them to process transactions and execute smart contracts more efficiently.

Polygon employs a two-layer architecture to achieve its scaling goals. The first layer, known as the "Polygon PoS (Proof of Stake) Chain," handles transactions and smart contracts within its own environment. This layer benefits from the faster consensus mechanism of PoS, which significantly reduces transaction confirmation times and lowers fees compared to Ethereum's PoW (Proof of Work) mechanism.

The second layer, called the "Polygon SDK (Software Development Kit)," enables developers to create their sidechains with specific configurations to meet their project's requirements. These sidechains can support various consensus mechanisms and customized rules, offering flexibility and optimization for different use cases. Additionally, the sidechains remain connected to the Ethereum mainnet through checkpoints, ensuring data integrity and security.

Polygon's scalability improvements have broad implications for the blockchain ecosystem. Its faster and cheaper transactions make decentralized applications more practical and user-friendly, encouraging wider adoption. Developers can build complex dApps without worrying about congestion and high gas fees on the Ethereum mainnet. This scalability boost enhances the overall user experience, making blockchain technology accessible to a larger audience.

Polygon's interoperability has the potential to create a more interconnected blockchain landscape, allowing assets and data to move more freely across various platforms and contributing to the evolution of the decentralized internet, often referred to as Web 3.0.

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Michelle Legge
By Michelle LeggeHead of Crypto Tax Education
Updated Nov 9, 2023
This article has been fact checked and reviewed as per our editorial policy.