Polygon (formerly Matic Network) is a Layer-2 solution for Ethereum that allows developers to create interoperable, scalable blockchain applications with low gas fees. MATIC is the name and ticker symbol of Polygon’s native ERC-20 Token.
Ethereum is the blockchain of choice for building decentralized applications, or DApps. However, as more applications are deployed on Ethereum, network congestion causes issues such as slow transactions, low transaction throughput, higher transaction fees and a poor user experience. Polygon solves these issues by providing a Plasma-based framework for building decentralized applications.
The Polygon network uses Plasma technology to process transactions off-chain before finalizing them on the Ethereum network, which helps achieve a high transaction throughput. Theoretically, Polygon can process 65,536 transactions per second on a single sidechain at near zero fees.
With Polygon, developers can deploy preset Ethereum-compatible blockchains in one click. Polygon also provides modules like pluggable consensus, staking and governance that allow developers to build customized blockchains.
Although Polygon uses Ethereum as its parent blockchain, it is blockchain-agnostic. This means Polygon is interoperable with other blockchains.
MATIC is used to participate in the network’s governance, to pay transaction fees on the platform, to distribute staking rewards and to stake collateral to become a validator.
Major projects like Aavegotchi, Decentral Games, Easyfi, Neon District, Polymarket, SushiSwap, among others, use Polygon’s architecture.
MATIC tokens have a maximum supply of 10 billion. Polygon distributed MATIC tokens via a private sale and a launchpad sale. In the private sale, 3.80% of the total supply was sold to seed investors (2.09%) and early supporters (1.71%). During the launchpad sale, 19% of the MATIC supply was sold, raising a total of $5 million.
In addition, 16% of the total supply was allocated to the founders, 4% was distributed to advisors and 12% was kept to run network operations smoothly. Lastly, 21.86% and 23.33% of all MATIC tokens were reserved as foundation and ecosyetm incentive tokens, respectively.
MATIC tokens are released into circulation on a monthly basis. As per Polygon’s release schedule, all MATIC tokens will be released by December 2022. This limited supply should have an impact on MATIC's price. The market demand for MATIC and subsequently MATIC price is driven by the demand for Polygon’s infrastructure.
Polygon was cofounded in 2017 by Jaynti Kanani, Sandeep Nailwal and Anurag Arjun. Before creating Polygon, the Polygon team was a major contributor within the Ethereum ecosystem. Their contributions include Plasma MVP, the WalletConnect protocol and the popular Dagger event notification engine on the Ethereum blockchain.
Kanani, currently the CEO of Polygon, worked as a data scientist at Housing.com before co-founding Polygon. Nailwal served as the CEO of Scopeweaver and the CTO of Welspun group. Arjun worked as a product manager at IRIS Business, SNL Financial, Dexter Consultancy and Cognizant Technologies.