Crypto for Beginners 101: All you need to know about MATIC Network aka Polygon if you’re new to Blockchain
MATIC Network as known as Polygon is a new blockchain technology that has recently emerged. It is now an easy-to-use platform on the Ethereum network that enables scalability via layer-2 solutions, as well as a multi-chain system that enables the integration of many blockchains and networks. However, before breaking into the top 15 cryptocurrencies and being branded the “internet of blockchains,” the Polygon network was known as MATIC Network.
The history of Polygon (MATIC Network)
The MATIC network was launched in October of 2017. The Indian-founded cryptocurrency was co-founded by three individuals who discovered a scalability issue with Ethereum and want to solve it.
Jaynti Kanani, the current CEO of Polygon, came up with the initial concept. Kanani worked as a data scientist at Housing.com in 2017. He first discovered a scalability issue and significant congestion on the Ethereum network as a result of a prominent NFT project at the time, Crypto Kitties.
Reaching out to Sandeep Nailwal, a blockchain engineer he knew from a crypto company group, and now business consultant Anurag Arjun, with whom he had ties due to relative work circles, the three of them would be extensively successful in their joint endeavor. The three partners then founded MATIC, with headquarters in Mumbai.
MATIC was able to provide scaling solutions for Ethereum, largely through the use of sidechains, while also assuring asset security through the use of the Plasma framework and decentralized Proof-of-Stake validators. The Plasma framework was a hot trend among other projects at the time, but MATIC stood out from the crowd, beating off the competition to become one of the most well-known scaling solutions in crypto at the time.
What is Polygon? (MATIC Network)
Polygon, formerly known as the Matic Network, is a scaling solution that seeks to give a variety of tools to improve the speed, lower the cost, and simplify transactions on blockchain networks.
Polygon, in a nutshell, bills itself as a layer-2 network, which means it is an add-on layer to Ethereum that does not intend to alter the original blockchain layer. Polygon, like its geometric namesake, has numerous sides, shapes, and applications, and it promises a simpler structure for developing interconnected networks. It aims to assist Ethereum in growing in size, security, efficiency, and utility, as well as to encourage developers to bring appealing products to market as soon as possible.
Polygon kept its MATIC cryptocurrency, the digital coin that powers the network, after the rebranding. MATIC is utilized as a payment and settlement unit amongst network participants.
Polygon (MATIC Network) can be used to generate Optimistic Rollup chains, ZK Rollup chains, stand-alone chains, or any other type of infra that the developer requires.
Polygon (MATIC Network) successfully converts Ethereum into a full-fledged multi-chain system (aka Internet of Blockchains). This multi-chain system is similar to others such as Polkadot, Cosmos, Avalanche, and others, but it benefits from Ethereum’s security, active ecosystem, and openness.
Some of its key features include:
- Scalability: rapid, low-cost, and secure transactions on Matic sidechains, with finality accomplished on the mainchain and Ethereum as the first Layer 1 base chain compatible.
- High throughput: up to 7,000 TPS on a single sidechain on the internal testnet; For horizontal scaling, many chains will be created.
- User experience: a fluid user interface and developer abstraction from the main chain to the Matic chain; native mobile apps and SDK with WalletConnect support
- Security: Matic chain operators are participants in the PoS system.
- Public sidechains: Matic sidechains are public in nature (vs. individual dApp chains), permissionless, and capable of supporting multiple protocols
Matic Network’s objective is to develop a plasma-influenced Layer 2 scaling solution that will “provide throughput capable of satisfying transaction demand for mainstream adoption of dApps.” Matic is unique in both its technological approach to Layer 2 and its potential support for a wide range of use cases.
Key products and features
Dagger, one of Matic’s ecosystem products, is a Zapier interface that allows any builder to gather real-time Ethereum changes to plug into their spreadsheets, apps, or other products. This trigger tool is being used to create over 400 dApps and trackers. Matic will provide its own wallet with WalletConnect integration to ensure a smooth asset transition to sidechains and simple asset management for users.
Several dApps are actively being developed on Matic to provide a better user experience with lower transaction costs:
- Confirmed DAU: 79
- Current Daily Transactions: 402
- Expected DAU with Matic Marketplace with low txn fee and better user experience games should be much higher. Maybe a 100 times higher than this as it is expected to complete the user experience of centralized games and apps
Cryptostaw – Venmo using DAI
Pocket Full of Quarters – Game that raised funds on Republic.co
Chainbreakers – Game built on Decentraland Universe
The flow chart below explains the fees abstraction mechanism that will be applied on Matic sidechains. The dApps will use their native dApp tokens on the Matic chain for in-app transactions and pay network fees to MATIC consensus enablers.
The dApps that run on Matic chains will help maintain a reserve of Matic Tokens with the liquidity providers, allowing their clients to deal freely without having to worry about holding Matic Tokens in their own wallets.
Blockchain and Network Data
Validators on Matic Network will stake their assets in exchange for the opportunity to participate in the PoS consensus mechanism on the sidechains. The transaction fees will be determined by network users, as they are on Ethereum, however, because of the enormous transaction throughput that is conceivable, the transaction fees are predicted to be substantially lower than those of Ethereum due to supply and demand in “gas fee” markets.
The sidechain is represented by the blue boxes in the diagram below, while the staking layer is represented by the human images. More blue-colored sidechains can be attached below the staking layer, allowing for many sidechains to be added below the staking layer.
Economics and Supply
- Token Name: Polygon.
- Ticker: MATIC.
- Blockchain: Ethereum.
- Token Standard: ERC-20.
- Contract: 0x7D1AfA7B718fb893dB30A3aBc0Cfc608AaCfeBB0
- Token Type: Utility.
- Total Supply: 10,000,000,000 MATIC
- Circulating Supply: 6,783,681,380 MATIC
Token Supply Distribution
- Private Sale tokens comprise 3.80% of the total supply:
- Seed Round: Sale conducted at a rate of 1 MATIC = 0.00079 USD and raised a total of USD 165,000, selling 2.09% of total token supply
- Early Supporters: sale conducted at a rate of 1 MATIC = 0.00263 USD and raised a total of USD 450,000, selling 1.71% of the total token supply.
- Launchpad sale tokens comprise 19% of total supply. It was conducted in April 2019 for a total raise of ~$5,000,000 USD worth of BNB at ~$0.00263 per token for 19% of the total token supply. The BNB to MATIC rate will be determined on the day of the sale.
- Team tokens comprise 16% of the total supply.
- Advisors tokens comprise 4% of the total supply.
- Network Operations tokens comprise 12% of the total supply.
- Foundation tokens comprise 21.86% of the total supply.
- Ecosystem tokens comprise 23.33% of the total supply.
Token Governance and Use of Funds
Matic Network had spent approximately 7% of TGE funding as of February 26th, 2019, according to the allocations below:
- 1% Partnerships.
- 9% Marketing.
- 15% Legal.
- 75% Technical Development.
Matic intends to keep enough fiat reserves to cover their operational expenditures for at least a year, according to their risk management policy. The remainder of any crypto monies will be kept in cold wallets with multi-sig support.
MATIC token release schedule
Roadmap, Updates, and Business development
Communicated vs. completed milestones
By Q1 2019, some of the projects built on top of Matic included:
- A Burner wallet (i.e., a friction-free mechanism to move tokens quickly through a web browser interface and withdraw out to cold storage when complete) implementation for onboarding users to dApps with one-use wallets.
- An upcoming games platform.
- A marketplace for NFT assets.
- A VR game.
- An advertisement exchange.
- Others (still in development).
- Matic Network Mainnet release (alpha)
- Allow Deposits and withdrawals of Ethereum-based assets using the Matic Plasma implementation in alpha
- Plasma – Cross-asset swaps between ERC721-ERC20, ERC20-ERC20, ERC721-ERC721) on testnet
- Proof-of-Stake Validator onboarding
- dApps developer program
- Matic Wallet – WalletConnect for dApps (Ethereum & Matic Network transactions)
- Matic Network Mainnet release (beta)
- Plasma – Asset swaps (ERC721-ERC20, ERC20-ERC20, ERC721-ERC721) support on mainnet
- Generic smart contract support (with PoS guarantees)
- Plasma Fast exits implementation on testnet
- Plasma Watcher nodes
Q4 2019 & Q1 2020
- Matic Network Mainnet release
- Plasma Fast exit services on mainnet
- Transaction relay pool (perform transactions without ETH) – for enabling easy asset/state movement from Ethereum to Matic
- Generic smart-contract support (with Plasma guarantees) – Proof-of-Concept
- Plasma – NFT Marketplace platform release for Ethereum assets
We will update you soon about the 2021 Roadmap
Progress in commercial relationship and Business development
Matic Network has already collaborated with the following blockchain projects:
- Decentraland: The Ethereum blockchain powers Decentraland, a virtual reality network. Users can create, enjoy, and monetize content and applications by using a developer toolkit designed to construct virtual environments and applications that work on any platform (all VR headsets and web browsers). Matic is working with Decentraland to scale the transactions that will take place as a result of user interactions within the virtual universe. Payments, NFT purchases, and, eventually, general game statuses and other data will be included.
- Quarkchain is a permissionless blockchain architecture that seeks to deliver a safe, decentralized, and scalable blockchain solution. Matic Network and Quarkchain plan to cooperate together on L2 scaling research by investigating and building Plasma sidechain solutions on top of Quarkchain. Matic will also collaborate with Quarkchain to provide notification services like as Dagger and Mobile Wallet features.
- Portis is a technological startup that intends to ensure that everyone in the world can use decentralized applications as easily as they use “normal” apps. Matic is collaborating with Portis to help these Portis-powered dApps gain scalability and a better user experience.
- Ankr is a distributed computing platform that intends to maximize the use of idle computing resources in data centers and edge devices. Matic and Ankr will work together to investigate the development of a decentralized Web3 stack in which Ankr may provide Distributed Cloud Computing services for Decentralized Application Development on the Matic Network.
- Maker is the company that created the DAI stablecoin. Matic Network is collaborating with MakerDAO to investigate and support teams developing dApps that use DAI on Matic Network sidechains. DAI will be the first ERC-20 coin to be integrated into Matic sidechains, according to Matic Network.
- Ripio Credit Network is a peer-to-peer credit network that connects lenders and borrowers worldwide. Matic is collaborating with Ripio to make micro loans available on its Plasma sidechains. Matic is also working with RCN on speedier Plasma exits, where exit NFTs will be utilized as collateral for loans on the RCN platform.
Matic Network’s activity
Community strategy overview
Matic’s main community goal has been to recruit an increasing number of dApp developers to build on the network. As a result, Matic wishes to establish a developer community and tap into the enormous potential of developers who have yet to venture into crypto. To do this, Matic is engaging with leading colleges in India and around the world to make sure that aspiring developers are aware of Matic and use it as a platform to scale their dApps.
Matic’s primary geographical focuses are detailed as below:
India – Matic has sponsored, coached, and judged various hackathons in India, including ETHIndia, and has also conducted a DApp training course at India’s finest engineering college, IIT Bombay, where 80 developers were exposed to developing and maintaining decentralized applications. Some of the projects from this cohort have continued to get support and advice from the team. Matic has also spoken to students at blockchain events at IT Mumbai, IIT Roorkee, and NIT Surat. Matic was also a sponsor and member of the judging panel at ETHIndia in Bangalore and ETHSIngapore.
US and China – Because these locations are the epicenters of blockchain development, they are strategically important to Matic because they are home to a sizable proportion of current blockchain developers. Matic intends to establish developer outreach hubs in San Francisco and Hong Kong, as well as working spaces, to foster creativity and development on the Matic platform.
Japan – Matic has a good working relationship with the Japanese plasma research community and is also striving to create awareness in the local population. Matic plans to establish a sizable developer community in Japan focused on enterprise use cases.
Germany -Chainbreakers is a German team working on a Decentraland RPG game. They’ve announced that they’ll be employing Matic Network for scalability. Matic intends to hire from Berlin’s thriving blockchain development community and is investigating the potential of establishing a development center there.
United Kingdom – Matic is cooperating with a decentralized exchange in the United Kingdom to investigate migrating to Matic sidechains in order to improve transaction processing speeds and user adoption.
Korea – Matic spoke with KoreaCryptoSocial at a blockchain event in Seoul, but the team will spend more resources to the Korean market following the Launchpad sale.
Vietnam – Matic has created a local Telegram channel to engage the Vietnamese community, conduct developer meetups, and establish university ties.
Thailand – Matic has established a Thailand community group and intends to find colleges and developer hotspots with which to collaborate in order to accelerate blockchain development.
Matic has a total of 13 public and 17 private repos. Indeed, Matic has only released a portion of its code publicly at this stage of development. The contracts repo contains the main business logic of the Matic Network. However, private repos’ metrics and overviews are the most informative in learning about the Matic project and ecosystem.
Jaynti Kanani (CEO)
Contributor to the first Plasma MVP implementation. Wrote the initial Node implementation of the original Walletconnect protocol. Contributed to Web3 and developer ecosystem tools such as sol-trace. Previously worked as a Data Scientist at Housing.com.
Sandeep Nailwal (Co-Founder)
Welspun Group’s former CTO (Ecommerce). Previously led a Blockchain service and product organization, designing and implementing Decentralized software architectures for a variety of clients. An ex-Deloitte Technology consultant who graduated from India’s premier business school.
Anurag Arjun (Co-Founder)
Previously, AVP (Product Management) at IRIS Business, a global leader in software products for regulatory agencies. He is also a serial entrepreneur who had a successful exit with his prior firm, Dexter Consultancy. Previously employed with Cognizant Technologies and SNL Financial.
- Pete Kim (Coinbase: Head of Engineering, Wallet)
- Esteban Ordano (Decentraland: Founder & CTO)
- Ari Meilich (Decentraland: Founder & CEO)
Find more information about Polygon:
If you have any questions, comments, suggestions, or ideas about the project, please email [email protected].