What is MATIC, and what role does it play in the world of emerging dApps? Let’s see. For the first time, high fees, low transaction speed and scaling difficulties on Ethereum presented themselves back in 2017 when CryptoKitties caused the network to become heavily congested and significantly slowed trade.
And here we go again. The explosive growth of DeFi this February, with almost $45 bln in total value locked, once again showed how scalability is a vital problem for prominent blockchains.
It’s not that the issue is a huge spoiler, because everybody on Ethereum’s team has been working towards a more scalable state of the network for years.
However, there is currently already a project that offers an external layer two solution with side-chains, thousands of transactions per second (TPS), a self-standing ecosystem and, in theory, lower fees.
You’re right, we’re talking about Matic Network, now rebranding as Polygon.
Layer two solution from Matic
So, how do layer two solutions work in Polygon, former Matic?
“Child” blockchains are normally created as a secondary framework where transactions and other processes can take place independently of the first layer/targeted blockchain.
If you’ve heard of Plasma, a framework in early development that allows the creation of ‘child’ blockchains and uses the main Ethereum chain as a trust and arbitration layer, you will probably know better how Matic’s side chains, Optimistic Rollups, zkRollups, and Validium, would work in Polygon. They somewhat resemble Plasma but offer different configurations for different clients.
That being said, a lot of work that normally would be performed by the mainchain is thus moved to the second layer, and now a dApp can grow on Ethereum without dealing with Ethereum’s issues.
Higher throughput with Matic
The developers of the protocol say that they’ve achieved up to 7,000 TPS on a single sidechain on an internal testnet as a result of their proprietary proof-of-stake checkpoints system.
So what is this magical PoS system? Put simply, the system sends snapshots of the side-chain to Ethereum at specific time intervals, but before these snapshots get through to the main chain, they have to be attested by two thirds of the validators set.
Because the system is based on the proof-of-stake protocol, decentralization is thus achieved and, yet, lower amounts of energy are spent.
In other words, the Matic network uses the progressive mining method where a PoS miner is limited to validating a percentage of transactions that is reflective of his or her ownership stake. For example, a miner who owns 12% of Matic available, can theoretically validate 12% of the blocks.
So, once miners validate the side-chain, its shapshot is ready to be sent to Ethereum, and that is basically how the mainchain doesn’t get clogged.
Solutions potentially existing on Matic
Here are some of the use cases that you can find interesting and explanatory as to what Matic was designed for.
- MakerDAO: Matic Network strives to integrate DAI as the first ERC-20 token on Matic sidechains.
- Decentraland: Matic Network collaborates with Decentraland to scale the transactions in the game, such as payments and sales, and snapshot the general state of the game and other data.
- Portis: Matic helps Portis achieve scalability and an enhanced user experience on their platform.
So, what is Matic again?
The platform seems to be cooming to prominence just in time because not so long ago, the average Ethereum transaction fee broke above $20 per transfer.
Matic is a proof-of-stake (PoS) Ethereum sidechain for scaling, faster transactions and lower fees. This protocol emerged earlier than Plasma and can now solve many of the issues pertaining to the second biggest blockchain in the world.
Its token currently trades at $0.22 with well over $1 billion in market cap and almost 5 billion units in circulation.
Version 1 of the software development kit (SDK) for layer 2 aggregation is reported to be ready in March, and soon enough, other blockchain products, dApps, will be built on top of it.
Interestingly, Matic had been noticed long before this article was written. Rumor has it that Coinbase Ventures bought into it a year ago and now, with the higher price of the token, has started to reap the fruits.