Polygon Trading Guide: What Is Polygon (POLUSD)?

Polygon, formerly called the Matic network, is a technology network that is both a framework and a protocol that scales and connects Ethereum-compatible blockchain networks. In other words, Polygon builds on the Ethereum blockchain as it runs alongside it and adopts its flexibility, sovereignty, security, and interoperability.
Polygon is, therefore, considered a “side chain” or a “layer two” scaling network that adds to the Ethereum network (instead of altering it).

Interestingly, the Polygon network, like Ethereum, undergoes several updates to improve its functionality.

Here’s what you need to know about Polygon and the latest Polygon update, which took place in September of 2024:

TL;DR

• Formerly known as Matic Network, Polygon is a framework and protocol for scaling and connecting Ethereum-compatible blockchains.
• Polygon operates as a sidechain or layer two scaling network, enhancing Ethereum's capabilities without altering it.
• Polygon was developed to alleviate pressure on the Ethereum network, allowing users to engage in various activities without compromising performance.
• The MATIC to POL migration (upgrade) took place on 4 September 2024.

What Is a Sidechain?

A sidechain essentially is a blockchain attached to a “main chain, which in Polygon’s case is the Ethereum blockchain. The sidechain (Polygon) allows for the mainchain’s (Ethereum) assets or tokens to be utilised on it and then returned back to the mainchain if needed.

Why Was Polygon Created?

The Polygon network emerged in an attempt to take some pressure off of the Ethereum network. This is because Ethereum users can play games, engage in virtual realities, and partake in financial activities all at the same time, which would render the Ethereum network useless since it becomes hard for it to function under such pressures. Consequently, Polygon aims to enable faster transactions, lower fees (gas), and more security, efficiency, and usefulness than the ones on the Ethereum platform.

While sidechains are attached to the main chain, they are still considered independent blockchains. Their independence means that their security relies on them and not on the mainchain and that they connect to the mainchain through a two-way peg.

A two-way peg (2WP) enables a certain amount of cryptocurrencies to be temporarily locked on a certain blockchain and simultaneously unlocks the same number of cryptocurrencies on a secondary one. In simple terms, it enables the “transfer” of a certain amount of cryptocurrencies from one blockchain to another.

What Is the Polygon Upgrade?

On September 4, 2024, Polygon underwent a significant upgrade, transitioning from its original token, MATIC, to the new POL token. This change marks an exciting evolution for the network.

1. Token Migration: All existing MATIC tokens on the Polygon PoS chain were seamlessly converted to POL tokens, simplifying the network's operations.
2. Expanded Utility: The POL token is designed to enhance its functionality. It plays a crucial role in governance and transaction fees within the Polygon ecosystem.
3. Improved Scalability: This upgrade aims to boost the network's scalability and efficiency, providing better performance for developers and users.
4. Interconnected Blockchains: The change reflects Polygon’s vision of evolving into a network of interconnected blockchains that support a diverse range of projects and applications.
5. Enhanced User Experience: The upgrade seeks to create a more user-friendly and streamlined experience for everyone using the platform.

Overall, the transition from MATIC to POL is a strategic step for Polygon, positioning it for future growth and broader adoption in the ever-evolving blockchain landscape.

What Is the POL Token?

The POL token is the new native currency of the Polygon network, replacing MATIC. It enhances utility by facilitating governance, transaction fees, and staking. Token holders can participate in key decisions about network upgrades, while the transition aims to improve scalability and efficiency for developers and users. As part of Polygon's vision for interconnected blockchains, POLUSD enables seamless interactions across various projects, marking a significant step in creating a more vibrant and user-friendly ecosystem.

Polygon’s History

To fully grasp the functions of the Polygon network, it is important to understand its history and how it came about.

• 2017: Initially, Polygon was named the Matic Network, which was an India-based project that was built by blockchain experts Jayanti Kanani, Sandeep Nailwal, and Anurag Arjunin in 2017.
  Matic Network emerged as a response to the scalability problems experienced on the Ethereum network. Accordingly, it aimed to solve common blockchain problems such as high fees, security issues, performance speed, and more.
• 2019: Polygon’s initial native coin “Matic,” was launched and publicly exchanged (IPC).
• 2021: The Matic network was rebranded to Polygon. Nonetheless, in spite of the name change, Polygon’s initial currency retained its original name of Matic. Furthermore, on 26 December 2021, Polygon (Matic) peaked at an all-time high of $2.88 per token.
• 2022: In April 2022, Polygon made an effort to become more environmentally friendly by going carbon-negative and released its “Green Manifesto” project, which helped Polygon go back on an upward trajectory after experiencing a downwards trend.
• 2024: On 4 September 2024, Polygon underwent an upgrade from MATIC to POL, migrating all MATIC tokens on the Polygon PoS chain to POL tokens. This upgrade further expands the utility of Polygon’s native token, reflecting and powering Polygon's vision as an ever-growing network of aggregated blockchains.

What Does the Future Look Like for Polygon?

Much of what the future holds for this crypto is still unknown; like many other cryptocurrencies, Polygon (POLUSD) is inherently volatile. Nonetheless, some analysts argue that the future seems bright for this coin as they believe that it will continue to grow in the upcoming years. Moreover, some believe that its shift to a green approach might even attract more investors to it, especially environmentalists.

Conclusion

Polygon represents a significant evolution in the blockchain space, addressing the scalability challenges of Ethereum while enhancing user experience and functionality. The recent upgrade to the POL token marks a strategic move toward a more interconnected and efficient network, positioning Polygon for future growth. With its commitment to sustainability and innovative developments, Polygon will likely attract further investment and support in the ever-evolving cryptocurrency landscape.