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What is Polygon (MATIC)?

Polygon is a cryptocurrency and one of the biggest smart contract platforms. Polygon’s history stretches back to 2017. Polygon’s development accelerated after 2021, and the project has taken significant steps in recent years. Although Polygon has expanded to a multi-chain ecosystem, its Ethereum sidechain is still the most-used blockchain.

Polygon zkEVM is a new scaling solution for Ethereum that combines ZK technology with EVM compatibility. Polygon is also developing Polygon Miden, another scalability solution based on ZK technology. Polygon’s native token is MATIC.

Polygon is an exciting investment that has the potential to raise its current status significantly.

What is Polygon?

Polygon is a cryptocurrency and one of the biggest smart contract platforms. It was initially created as a sidechain of Ethereum, but the project has grown much broader in recent years. These days, Polygon competes with the most prominent smart contract platforms, such as Cardano, Solana, and BNB Chain.

Polygon also has to compete with Ethereum’s Layer 2 solutions. L2s such as Base, Arbitrum, and Optimism are growing fast in popularity. Polygon’s answer to the challenging competitive landscape is new technical innovations, which this article will review in more detail.

Polygon’s native token is MATIC. The ticker comes from the project’s original name, Matic Network. The rebranding to Polygon occurred in 2021, but the token’s ticker remained unchanged. MATIC tokens will be migrated to POL tokens in 2024.

Below is some basic information about Polygon:

Founder Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun
Category Smart contract platform
Ticker MATIC
Circulating supply 9.3 billion MATIC
Max supply 10 billion MATIC
All-Time Low (date) $0.003012 (May 9, 2019)
All-Time High (date) $2.92 (Dec 27, 2021)

Follow the real-time price of Polygon from here: Polygon’s price.

The role of the MATIC token is similar to that of native tokens on other smart contract platforms. Its primary use case is for paying transaction fees on the Polygon blockchain. The network’s validators are also staking MATIC because Polygon is a Proof of Stake blockchain.

This article is the Polygon beginner’s guide. It covers Polygon’s history, technology, and potential as an investment.

The history of Polygon

Polygon’s history stretches back to 2017. Jaynti Kanani was working with the service at the time, but he also followed the development of the crypto industry, especially Ethereum’s scalability problems.

Kanani wanted to solve Ethereum’s challenges but wasn’t the only one. Many crypto projects started around the same time with similar goals. Jaynti Kanani contacted Sandeep Nailwal, whom he knew before. Anurag Arjun, on the other hand, worked in the same office. Kanani pitched the idea of Matic Network to them, and the project launched in 2018.

Mihalio Bjelic joined the team a little later. Below is a picture of the core team members.

polygon team

Polygon (formerly Matic Network) is one of the few large crypto projects originating in India. The country’s regulations posed extraordinary challenges for Matic Network. The team had to build the project’s administration outside India and prepare for different scenarios.

India is also a relatively unknown country in the crypto industry. This prevented Matic Network from accessing the pockets of well-known VCs, making the first stages of the project financially challenging.

In 2019, things started to happen. Coinbase Ventures invested in Matic Network, one of the most famous crypto VC firms. Matic Network also released the Alpha version of MainNet and signed numerous partnerships. You can read more about them in this blog post.

The most crucial event in April 2019 was the IEO organized on the Binance Launchpad. 19% of Matic Network’s 10 billion tokens were sold to investors. 2020 finally saw the MainNet launch, which happened in stages during the summer and early autumn.

Matic Network initially focused on implementing a Proof of Stake blockchain that scales to thousands of transactions per second using Plasma technology. This blockchain also links to Ethereum and leverages its security.

In the summer of 2020, a DeFi boom started, clogging the Ethereum blockchain again and skyrocketing transaction fees. Although the setup was favorable for Matic Network, it remained hidden from the general public.

The DeFi industry exploded again at the beginning of 2021 when the entire crypto market was booming. This is when Matic Network finally received interest from investors and application developers. The MATIC token also ten-folded in price in a few months.

Matic Network was rebranded as Polygon in February 2021. Its native token still retained the ticker MATIC.

The project also announced expanding from the Ethereum sidechain towards wider use cases. The term “Internet of blockchains” has often been used in the industry and became Polygon’s goal. This new approach moved the project closer to Polkadot and Cosmos.

Polygon ID, Supernets, zkEVM, and Polygon 2.0

Polygon’s development accelerated after 2021, and the project has taken significant steps in recent years. Let’s review four essential developments from 2022-2023: Polydon ID, Supernets, Polygon zkEVM, and the vision of the Polygon 2.0 version.

Polygon ID

In June 2022, Polygon released the Polygon ID solution, focusing on digital identity development. It allows users to prove certain aspects of their identity without revealing all personal information. Polygon ID makes it possible to manage and authenticate your identity securely and decentralizedly.

online identity

With Polygon ID, users can, for example, prove their age, place of residence, or education without disclosing sensitive information. This is useful for online services that require reliable proof of identity without sharing private information.

Polygon Supernets

In September 2022, Polygon announced it was working on the Polygon Supernets solution. Supernets are practically EVM (Ethereum Virtual Machine) compatible blockchains. Supernets’ idea is to offer application developers an easy way to create blockchains and decentralized apps leveraging Polygon’s scalability.

Supernets aims to promote the expansion and diversification of the Polygon ecosystem. It offers new opportunities for the development of various applications. Polygon Supernets are today known as the Polygon Chain Development Kit (CDK) and have gained tremendous popularity among application developers.

Polygon zkEVM and Polygon 2.0

Polygon released the Polygon zkEVM scalability solution on its public testnet in March 2023. Polygon zkEVM is a zk-based and EVM-compatible scalability solution for Ethereum. Thanks to EVM compatibility, application developers have the same user experience in Polygon zkEVM as in Ethereum.

In June 2023, Polygon published its vision of version 2.0 (also check our news on the subject). Polygon 2.0 includes a series of updates that aim to connect all parts of the Polygon ecosystem by utilizing Zero-Knowledge technology.

The most essential part of Polygon 2.0 is updating the Polygon PoS Chain to support zk-technology. This update is known as zkEVM Validium. In the Polygon 2.0 update, the ticker of the MATIC token also becomes POL, and the token gets new functionality.

Polygon PoS Chain

Although Polygon has expanded to a multi-chain ecosystem, its Ethereum sidechain is still the most-used blockchain. It is known as the Polygon Pos Chain. Layer 2 solutions such as Base, Arbitrum, and Optimism have also emerged alongside Pos Chain. Their purpose is also to scale Ethereum, but the implementation is technically a bit different.

The PoS Chain is a blockchain that uses Proof of Stake consensus. It can handle about 7000 transactions per second. This is possible because only a handful of validators create blocks in Polygon’s architecture. They are located in a layer called the Bor Layer. It practically means the same as the Pos Chain.

polygon architecture

The Heimdall Layer contains the 100 validators who have staked the most MATIC tokens. Bor Layer validators are randomly selected from this group and get to create new blocks. Heimdall layer validators also take a snapshot of the Bor Layer data and send it to the Ethereum blockchain, allowing the Pos Chain to leverage Ethereum’s security.

Polygon’s Pos Chain is also linked to Ethereum in more ways than via snapshots. As the graphic above shows, staking contracts are on the Ethereum blockchain. This means the Polygon validators are staking MATIC tokens on Ethereum. Reward contracts are also located there.

There is no minimum requirement for tokens to be used for staking MATIC. However, a validator must stake enough tokens to enter the top 100 list. Otherwise, it cannot be selected for a block creator.

Small investors can delegate their MATIC tokens to be staked, which is also possible in other PoS platforms. Polygon staking yields about a seven percent annual return.

The Polygon Pos Chain uses MATIC to pay transaction fees, which are just fractions of a penny. In the future, the MATIC token will also be used in other scaling solutions built by Polygon.

Polygon zkEVM

Polygon zkEVM is a new scaling solution for Ethereum that combines ZK technology with EVM compatibility. It was launched in March 2023 when Ethereum founder Vitalik Buterin signed the first transaction on the new blockchain.

ZK (zero-knowledge) technology has attracted great interest in the crypto world. It is based on zero-knowledge proofs, which allows transactions to be verified without revealing all information to the network validators. This differs from the traditional verification method, where all transaction data is shared with validators.

ZK technology offers several advantages over traditional verification methods, such as better data protection, scalability, and security. Below is a picture from Polygon’s website. You can learn more about the zkEVM solution at

polygon zkevm

EVM stands for Ethereum Virtual Machine. EVM compatibility refers to the blockchain’s ability to execute smart contracts built on Ethereum. It can be considered a significant feature as it allows application developers to seamlessly transition from Ethereum to EVM-compatible blockchains, increasing compatibility and scalability.

Polygon zkEVM is currently the market-leading scalability solution based on zkEVM technology. It is expected to be of great importance to Polygon’s future.

Polygon Miden

Polygon is also developing Polygon Miden, another scalability solution based on ZK technology. It is a modular execution layer aiming to extend Ethereum’s features. It strives to achieve this goal by utilizing parallel processing and client-side proving technology.

Client-side proving refers to situations where a user can produce proof of the authenticity of a particular event on their device without revealing all the details to other parties in the network. The technology allows users to maintain privacy while ensuring the correctness and security of the transaction.

Below is a picture from Polygon’s website. You can explore the Miden scaling solution at

polygon miden

Application developers can use Miden to create privacy-enhancing high-performance applications, especially for the DeFi and RWA sectors. The ZK-optimized approach enables local execution of smart contracts and uses ZK proofs for verification, significantly improving network performance and user privacy.

Polygon Miden emphasizes ZK compatibility rather than EVM compatibility, the most significant difference between its Miden and zkEVM solutions. Focusing on ZK compatibility at the expense of EVM compatibility enables innovations that would be difficult or impractical in EVM-compatible systems.

Miden’s development is still ongoing at the time of this writing. Its TestNet is scheduled to start in 2024. Polygon wants Miden to form the backbone of its zkEVM ecosystem.

The MATIC token

Polygon’s native token is MATIC. As mentioned, the ticker is derived from the project’s original name, Matic Network. The MATIC token was launched in April 2019 via the Binance Launchpad. The token allocation was as follows:

  • 12.0% for staking rewards
  • 23.3% for the ecosystem
  • 21.9% for the Polygon Foundation
  • 4.0% for advisors
  • 16.0% for the Polygon team
  • 3.8% for private investors
  • 19.0% for the Binance Launchpad

The maximum supply of MATIC is 10.0 billion tokens. When this article was written, almost 9.3 billion tokens were already on the market. All token allocations have been unlocked except for the staking rewards, shown below as the lowest blue section.

matic supply

The entire MATIC supply will be released to the market by April 2025. What happens after this?

Before the deadline, the MATIC token will be migrated to the POL token, i.e., Polygon’s ticker will change. The change will take place in 2024. After this, an annual three percent inflation will be introduced to cover staking rewards.

You don’t need to do anything if you own MATIC tokens and keep them on a crypto exchange. If you store MATIC in your wallet, you must perform the migration manually or deposit the tokens to a crypto exchange.

Polygon as an investment

Polygon is an exciting investment that has the potential to raise its current status significantly. From a technical point of view, the project has taken substantial steps in recent years, which have not been reflected in Polygon’s price development or the liquidity of its DeFi market.

Polygon devotes considerable resources to developing its zkEVM solution. Its goal is to offer the most versatile ZK-based development platform. According to many experts, the potential of ZK-based scalability solutions is enormous, so Polygon is well-positioned here.

Polygon’s PoS Chain has also worked without issues for years. It processes millions of transactions every day.

polygon pos

Some investors might think of Chainlink, even though these projects have no direct connection. Chainlink and Polygon have great fundamentals that haven’t yet materialized in the token price. Crypto investors are increasingly pursuing meme coins, RWA & AI coins, and Ethereum’s Layer 2 solutions.

Will Polygon be able to make itself as attractive to crypto investors as it was in 2021?

Polygon has also lost its position in the DeFi rankings. Below is a list of the largest DeFi platforms on the market, ordered by liquidity (TVL).

PlatformNative tokenTVLMarket share
Ethereum ETH $50.3 billion 57.0%
Tron TRX $9.5 billion 10.7%
BNB Chain BNB $5.7 billion 6.3%
Solana SOL $4.6 billion 5.2%
Arbitrum ARB $3.2 billion 3.6%
Blast BLAST $1.3 billion 1.5%
Avalanche AVAX 1.2 billion 1.4%
Base - 1.2 billion 1.3%

Polygon doesn’t even make it to the top 10. In addition to Bitcoin, half a dozen Layer 2 solutions have risen above it.

Polygon’s challenge is the loss of its competitive advantage. In 2021, Polygon was one of the few working Ethereum scaling solutions, which gave the MATIC token an enormous boost. The market has changed significantly since those days.

Ethereum’s Layer 2 solutions offer an EVM-compatible platform and zero fees. Almost half of Polygon’s DeFi liquidity is in the Aave lending service. Is Aave significantly better or cheaper to use on Polygon than Base, Arbitrum, or Optimism? Hardly.

However, Polygon has potential. Its zkEVM implementation could be a massive hit, and the Polygon 2.0 architecture will significantly change the entire ecosystem.

If you are interested in investing in Polygon, read this beginner’s guide: How to Buy Polygon. The article provides step-by-step instructions on how to buy Polygon safely from Binance.

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