What is Polygon?
Today, the Ethereum (ETH) network is immensely popular for trading crypto assets across various apps and protocols. However, the rapid growth of Ethereum also presents new challenges, such as increasing the bandwidth of the network. More people using Ethereum means more pressure on Ethereum’s limited throughput, which results in high fees and wait times for each transaction.
Polygon (MATIC) is a blockchain network designed to solve some of Ethereum’s problems by taking pressure off the Ethereum network proper. Polygon has its own separate technology “stack”, dev team and blockchain protocol, all designed with Ethereum compatibility in mind. It is often called a ‘second-layer’ network, with Ethereum being the ‘first-layer’ Polygon is intended to extend.
Polygon’s different design and tech – especially its proof-of-stake (PoS) model – give it an advantage over Ethereum in terms of speed, and transaction costs on Polygon are very cheap. However, Polygon isn’t designed to compete with Ethereum, having been built from the ground up to improve Ethereum’s capabilities.
Many crypto assets on Ethereum can be easily ‘bridged’ (transferred) to Polygon and then traded within the Polygon network freely. This is especially useful for holders of Ethereum ‘ERC-20’ tokens. UST, SHIB, UNI and other ERC-20 tokens can be swapped on Polygon cheaply and quickly. Many popular crypto trading protocols that support Ethereum have expanded to support the Polygon network, including Uniswap and 1inch. This has further encouraged interoperability between Polygon and Ethereum.
What is MATIC?
MATIC is the native coin of the Polygon network. MATIC is used to pay for fees on Polygon, such as when sending a transaction or interacting with a smart contract or other crypto protocol. In this regard, it functions similarly to ETH on the Ethereum network. Anyone wishing to trade or otherwise do business on the Polygon network must have some MATIC to pay fees. Fortunately, the low cost of transacting on the Polygon network means that traders only need a small amount of MATIC to use the network effectively, as fees are much lower than Ethereum.
MATIC has a few other roles on the Polygon network, such as securing Polygon’s PoS model. Holders of a large amount of MATIC can stake their MATIC to act as validators, verifying transactions on the Polygon network and collecting fees in return. Smaller holders of MATIC can also delegate their MATIC to validators for a portion of their rewards. MATIC holders can participate in the governance of the network, by voting on any potential feature development or changes to how Polygon operates in the future.
Buying and Trading MATIC
To get started on the Polygon network, you’ll need at least a little bit of MATIC to cover transaction fees. MATIC is a very popular crypto asset available on top crypto exchanges like Binance and Coinbase. You can choose to keep your MATIC on an exchange if you just want to invest in the future of the network. If you want to use the Polygon network, you will have to withdraw your MATIC to a wallet with Polygon support. Many wallets that support Ethereum also support Polygon, and some of the most popular include MetaMask (metamask.io), Trust Wallet and Exodus Wallet. These wallets are available for both desktop and mobile devices.
ETH <-> MATIC Swapping and the Polygon Bridge
If you already have some Ethereum assets, you can trade these for MATIC on the Polygon network on many of the most popular DEXes (decentralised exchanges). DEXes that support cross-chain swaps between Ethereum and Polygon are increasingly common. By using a DEX, you can get started with Polygon without buying MATIC for cash on a centralised exchange.
You can also ‘bridge’ assets from Ethereum to Polygon through a Polygon bridge. These bridges accept tokens from Ethereum and then send you the equivalent token on Polygon, or vice versa. The official Polygon Bridge is available through the Polygon web wallet interface. By connecting a third-party wallet such as MetaMask or Coinbase Wallet, users can securely bridge cross-chain assets to Polygon from the Ethereum network.
This can be a painless way to transfer value between the Ethereum and Polygon networks, especially if you have a large number of tokens or one-of-a-kind assets like NFTs. Instead of being sold into the market, the assets are held in a smart contract and can be retrieved at a later date by bridging the assets off of the Polygon network.
Swapping assets from Ethereum to Polygon (or vice versa) typically requires you to fund transactions on the Ethereum network. This depends on which assets you swap, how many addresses are involved, and how busy the Ethereum network is when you make the swap. Make sure you understand any fees incurred by a transaction before confirming it.