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The Bankless Guide to Polygon

Updated September 2023
Bankless Bankless Mar 24, 20237 min read
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The Bankless Guide to Polygon

Polygon is a blockchain ecosystem that has gained considerable popularity in recent years for its rising status as a hub for DeFi and NFT activity.

This ecosystem boasts a highly-scalable technology stack that is both deep and wide, and has attracted a large and diverse international community of users and developers accordingly.

As such, for teams looking to sidestep the expensive transaction fees of the Ethereum mainnet, Polygon has the scaling solution of choice for hundreds of apps and dozens of the largest brands in the world who have made the leap into the web3 space.

What is Polygon

Polygon is a suite of Ethereum scaling resources because it offers a range of different blockchain solutions that are designed to make Ethereum-based transactions fast and low-fee.

The most popular of these solutions today is the flagship Polygon Proof-of-Stake (PoS) chain. Unlike a simple sidechain, Polygon is rather a “commit-chain” system that handles computation offchain and then commits some of its block data to Ethereum to inherit security from Ethereum. And unlike a singular sidechain, Polygon PoS can use multiple sidechains simultaneously for horizontal scaling.

Notably, today Polygon PoS can facilitate up to 700 transactions per second, with the average cost of a Polygon transaction being ~$0.017 currently. That is roughly 30,000% cheaper than the ~$5 average transaction fee that Ethereum users are facing right now.

Polygon PoS acts across three chains: Ethereum for checkpoints, Heimdall for staking, and Bor for producing EVM-compatible blocks

Beyond Polygon PoS, the Polygon team has also worked on a variety of ZK rollups, which are layer-two (L2) scaling solutions that use “zero-knowledge” cryptographic proofs to efficiently execute off-chain transactions and then batch them to Ethereum. The foremost of these in-development L2s are Polygon zkEVM (a zkEVM with opcode equivalence to the EVM) and Polygon Miden (a zk-Rollup for arbitrary smart contracts).

Ultimately, the plan is to migrate Polygon PoS to the Polygon zkEVM. The Polygon zkEVM had its mainnet beta officially activated in March 2023 and then updated in September 2023. Yet the future of the Polygon tech stack also entails third-party projects launching their own zk-based L2s using the Polygon Chain Development Kit (CDK). Immutable and Canto are two early adopters here.


The pulse of Polygon

Since Polygon PoS is the main Polygon chain used in production today, most Polygon activity you see around right now stems from use of this particular chain.

That said, Polygon PoS is currently one of the most teeming blockchains in the entire crypto ecosystem. At the time of this guide’s latest update (September 2023), Polygon had facilitated +219 million unique addresses, +2.44 billion transactions, +1.17M created smart contracts, and +$12.8B worth of NFT trading volume.

Zooming in, the early Polygon DeFi and NFT ecosystems are among the most robust in crypto, too, since Polygon already boasts over 600 DeFi and 500 NFT apps built atop it.

According to DeFiLlama, Polygon is currently the 5th-largest DeFi chain at over $780M in total value locked (TVL), behind only Ethereum, Tron, BNB Chain, and Arbitrum. As for NFTs, Polygon’s top 15 NFT collections alone have already accounted for over 85k ETH worth of trading volume to date.

Polygon PoS TVL - via DeFiLlama

As for Polygon zkEVM, it's currently the 13th-largest L2 in the cryptoeconomy per its current $41M TVL.


Polygon’s MATIC token

MATIC is the native token of Polygon. It’s related to Polygon as ETH is to Ethereum, meaning MATIC is used to pay for transactions on Polygon and also for staking since Polygon is a PoS chain. The token ticker stems from Polygon’s original name, the Matic Network, from 2017.

Per this guide’s latest update, MATIC was trading around the $0.50 USD mark with an $4.8B market capitalization, making it the 14th-largest crypto in the cryptoeconomy at the time. Its circulating supply was just over 9B out of a 10B total supply. Note, though, that the plan is to migrate MATIC into a new POL token as early as Q4 2023.

For now, the most common venues for buying or selling MATIC is large centralized crypto exchanges as well as decentralized exchanges like Uniswap.


What you need to use Polygon PoS

  1. 👛 A wallet — since Polygon is EVM-compatible, you can use any Ethereum wallet (MetaMask, Coinbase Wallet, WalletConnect, etc.) to create a Polygon address
  2. 🌐 Network support — use the Chainlist tool to add the Polygon network to your wallet, the network ID is 137
  3. 🪙 Starter MATIC — like you need ETH for gas on Ethereum, you need MATIC to pay for transactions on Polygon; if you acquire MATIC on Ethereum you can then bridge the tokens over to use on Polygon

How to bridge to Polygon

The Polygon Bridge is the native bridge for sending Ethereum-based assets to and from Polygon PoS. If you want to move funds to Polygon for the first time, this is a simple and solid place to start, but keep in mind that it can take up to 3 hours for withdrawn funds to become available on Ethereum again.

For more rapid bridging experiences, there are a range of third-party “fast withdrawal” cross-chain swap bridges you can also consider. Bungee, cBridge, and Hop are all options here, though note that every bridge will support different assets — some may support only stablecoin transfers, while others also support MATIC.


What to do on Polygon

1. Swap and provide liquidity on Uniswap

Uniswap is the most proven and trusted decentralized exchange in all of DeFi, and it’s become a major hub of trading activity on Polygon ever since the DEX’s community voted to deploy Uniswap V3 on Polygon back in December 2021.

As for trading on Uniswap via Polygon, it’s just like trading on Uniswap’s Ethereum deployment except your trades will be much faster and much more affordable. At the time of this guide’s latest update, a simple Uniswap swap on Polygon cost $0.05 in gas compared to $4.50 on Ethereum, making it 8,900% cheaper to trade on Polygon compared to L1!

To get to swapping, you’d simply head to app.uniswap.org and then use the network button to flick over from Ethereum to Polygon. Then rapid and inexpensive DeFi trades will be right at your fingertips. You can also try your chances at providing liquidity to Uniswap trading pools to attempt earning yield from accrued trading fees.

2. Borrow and lend on Aave

Among the first major DeFi protocols to launch on Polygon, Aave first deployed its decentralized borrowing and lending marketplace on the chain in March 2021.

Just like Aave on Ethereum L1, users can deposit assets to the protocol and use them as collateral in order to borrow against them. Aave’s Polygon market currently supports deposits for 18 assets, including USDT, USDC, DAI, wBTC, wETH, MATIC, and AAVE.

Aave’s TVL on Polygon to date - via DeFiLlama

With a limited slate compared to the Ethereum markets, Aave’s Polygon deployment still lets users borrow against some of the most liquid assets in DeFi to yield farm, leverage long, etc, and all in affordable fashion. At the time of this guide’s latest update, an Aave collateral deposit transaction on Polygon cost $0.09 in gas compared to $30 on Ethereum, making it over 33,200% cheaper to start on Aave’s Polygon deployment compared to L1.

3. Collect NFTs on OpenSea

Tiny Dinos, an omnichain collection, on OpenSea

Polygon has a teeming early NFT scene right now, and much of the trading activity here is taking place on OpenSea, the NFT ecosystem’s leading marketplace.

Trading via Polygon on OpenSea is exactly like trading on OpenSea with your Ethereum account, except you’ll use your Polygon account and MATIC for gas for Polygon NFTs, and again your transaction costs will be drastically cheaper on Polygon.

OpenSea doesn’t separate its discovery experience across different chains, so if you want to buy or sell a specific Polygon NFT, you simply have to head to that collection’s specific OpenSea page and proceed from there.


Additional Polygon apps

Interested in diving deeper into the Polygon app scene? Check out these additional apps, which are also among the most popular projects on Polygon PoS today, when you’re ready for the rabbit hole:

  1. 💨 Quickswap — DEX | $88M USD TVL
  2. 🍔 Beefy — Yield aggregator | $48M USD TVL
  3. 🌟 Stargate — Cross-chain bridge | $28M USD TVL

Additional Polygon resources

If you're looking to expand your knowledge on Polygon in general, make sure to explore these supplementary tools and resources. They can help you gain a more thorough understanding of this network of networks:

  1. 🌐 The Polygon Wiki
  2. 📜 Polygon Ecosystem database
  3. 🔍 Polygon PoS block explorer
  4. 💎 Polyrare Polygon NFT stats
  5. 🦙 DeFiLlama’s Polygon DeFi dashboard

Zooming out

The Polygon scaling suite is just beginning since Polygon zkEVM is just beginning to ramp up, but even still Polygon PoS is already a dominant force to be reckoned with and is enjoying considerable activity in the Ethereum scaling scene. Plus the Polygon team has additional resources in the works, like Supernets for appchains and Polygon ID for self-sovereign identity, that are poised to become popular tools in their own right.

The big idea, then, is that in the Polygon ecosystem you can fashion applications for rapid and virtually zero-cost UX. Whether that’s on Polygon PoS or on Polygon’s ZK rollups or Supernets is up to a given project’s needs, but the options will be there.

Bankless

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