In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

In recent months, Ethereum has seen a large influx of new users, creating more than 3 million unique addresses in the past 30 days. Although the growth of the Ethereum ecosystem is positive for the market as a whole, it also proves some significant shortcomings of Ethereum. On the one hand, decentralized applications (Dapps) have become very expensive. According to data from Ethgasstation.com, the average DEX transaction cost is more than 100 Gwei or $10, so for many people around the world, the barriers to entry have become higher and higher. As the Ethereum 2.0 upgrade is about to be carried out later this year, in recent months, the possible solution of the Ethereum main chain upgrade has received widespread attention. However, another possible solution, the Ethereum sidechain, may be able to provide a more effective solution. Layer 1 side chains such as Ethereum are collectively referred to as Layer 2 extension solutions. These L2 platforms are built on top of the existing L1, and aim to add side chain functions to reduce transaction costs and increase speed.

What is Polygon (Matic) network?

Polygon (MATIC) is an L2 scaling solution built on Ethereum. Its goal is to eliminate some of the most important barriers to Dapp adoption: speed, scalability, and availability.

Polygon calls itself “Ethereum’s Blockchain Internet” because users on Polygon can create off-chain transactions for payment and smart contract interactions. Polygon takes a unique approach to L2 scaling affected by plasma. This is a proposed L2 scaling solution that involves creating a set of tree-shaped “sub-blockchains” that use Ethereum The blockchain serves as the trust and arbitration layer. The sub-blockchain allows batch processing of many transactions before sending to the Ethereum blockchain, thereby helping to reduce transaction costs.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Matic uses something called MoreVP (More Viable Plasma), which allows assets on the Ethereum blockchain to stay in place, while transactions on L2 can be conducted on a separate proof-of-stake network. Matic has multiple side chains, each of which supports EVM, which allows the deployment and interaction of smart contracts at a much lower cost than the Ethereum main chain.

How does Polygon actually work?

When studying Polygon, the first thing to understand is that Polygon is actually separate from the original MATIC blockchain launched on Ethereum. Polygon’s new blockchain is built as a “commit chain” rather than a “side chain”. The main difference to note here is that side chains usually rely on their own validators to ensure security. In contrast, submission chains like Polygon can internalize Ethereum’s network security by using Ethereum validators. In short, the commit chain allows developers to take advantage of the extended advantages of the side chain while gaining the security of Ethereum.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

In the Polygon ecosystem, two different types of chains can be built: independent chains and secure chains. The independent chain can have its own consensus model, so it is not as secure as the network using the Ethereum consensus model, but it is more flexible. Security chains can be directly protected by Ethereum or by validators in the Polygon ecosystem, which makes them more secure than independent chains, but they are less flexible. Polygon’s network architecture is unique in that it enables developers to mix and match different extensions without having to choose just one.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Ethereum layer: The Ethereum layer simply uses Ethereum as the base layer of the Polygon chain, which has high security but low flexibility. As a project on Polygon, there is no need to build on this layer.

Security layer: The security layer is where Polygon provides the “Verifier as a Service” function, allowing the Polygon verifier to be used as a consensus mechanism on the chain. This is more flexible than using the Ethereum layer, but slightly less secure. As a project on Polygon, there is no need to build on this layer.

Polygon network layer: The Polygon network layer is composed of independent blockchain networks, each of which can maintain central functions, such as block production and transaction sorting. As a project on Polygon, it needs to be built on this layer.

Execution layer: The execution layer is responsible for executing transactions published in the Polygon ecosystem. As a project of Polygon, it needs to be executed on this layer.

Due to its unique structure, Polygon can overcome many obstacles to the expansion of Ethereum. The structure includes scalability and backward compatibility while preserving security and user experience.

MATIC Token Economics

The distribution details of MATIC are as follows:

MATIC’s seed round of financing ended in April 2019, raising approximately $165,000 from institutional investors (including Coinbase Ventures and ZBS Capital). In the seed round, 1 MATIC is priced at US$0.00079.

Later, early supporters have the opportunity to invest at a price of $0.00263 per MATIC (more than 3 times higher than the seed round price). The “early supporters” round raised $450,000 at a price of $0.00263 per MATIC.

The next round of financing includes a public sale on Binance Launchpad, which raised $5 million at a price of $0.00263 per token (equivalent to the price of early supporters at launch).

The remaining funds are equivalent to more than 75% of MATIC’s circulation, and are dedicated to maintaining the operation of the MATIC mainnet team, consultants, foundations, ecosystems and network operations.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

The number of MATIC tokens exceeds 10 billion, but the circulation is less than 6.4 billion (or about 64%). Although investors who purchase MATIC through the Launchpad sale can get their tokens immediately, the remaining groups are given lock-up periods of different lengths. Seed investors and early supporters can get half of the tokens immediately, and the rest will be released in October 2019. Tokens dedicated to teams, advisors, foundations, ecosystems, and pledge rewards are also distributed over time. It is estimated that 100% of the tokens will be distributed by the fourth quarter of 2022.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Polygon Blog

Polygon Ecosystem

The most active Dapps on Polygon in the past 24 hours (based on the number of users).

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Dappradar.com

Although many top projects on Ethereum, such as Sushiswap, Curve, 1inch, and Balancer, have been ported to Polygon, there are also some native Polygon projects that have become more popular and bring people to the Polygon ecosystem.

Here is a brief introduction to the most active native Dapp on Polygon.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

QuickSwap

Quickswap is a next-generation DEX built on Polygon, allowing users to conduct fast and cheap transactions on more than 100 trading pairs. Quickswap was originally forked from the Uniswap protocol and powered by QUICK tokens. Quickswap has quickly become the user’s most active Polygon project, with more than 225,000 users and a transaction volume of more than $4.5 billion in the past 30 days. At the time of writing, the liquidity on the platform exceeds $1 billion, making it one of the most liquid DEX on the market, even though it was only launched in March 2021.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Defipulse.com

Polycat Finance

Polycat Finance is a revenue aggregator. DEX describes itself as “a value-oriented, economically sustainable hybrid revenue aggregator on Polygon.” Polycat Finance is backed by the FISH token, which is an ERC20 token with a maximum supply of 3 million FISH. FISH also acts as Polycat’s governance token. Since the maximum supply of 3 million FISH was reached in August, FISH owners can receive a “dividend” (percentage of platform transaction fees). Polycat Finance also has a unique mechanism to support early projects, allowing them to raise funds through IFO (Initial Farm Offer). Once the FISH tokens in the pool are burned, users can pledge FISH and get new tokens (and the additional benefits they earn).

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

An example of the IFO description for PAW tokens on Polycat (polycat.finance)

Although it reached a TVL of more than US$284 million in June, at the time of writing, Polycat Finance’s current TVL is less than US$130 million. The number of daily users on the platform dropped from more than 15,000 at the peak in June to more than 900 in early August. As APY on the platform began to increase, it has risen to more than 5,000 in the past 24 hours.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Aavegotchi

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Aavegotchis is the incarnation of an NFT game on the Ethereum blockchain that complies with the ERC721 standard. The world of Aavegotchi is supported by GHST tokens, which allows users to upgrade their tokens and earn revenue through Aave, bridging the gap between blockchain games and DeFi through gamification revenue experience. Aavegotchi ported their code from the Ethereum mainnet to Polygon in March 2021, which allowed the game to grow significantly due to the lower threshold.

Aavegotchi team member Nick Mudge said on Twitter on March 17 this year that within 15 days after the deployment of the Polygon upgrade, the upgrade has saved users more than $14 million in gas fees on the platform.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

PolyMarket

PolyMarket is a decentralized information market built on Polygon, launched in June 2020. PolyMarket allows users to trade binary contracts on countless real-world events, from elections to celebrity court cases. On this platform, users can make market recommendations for a particular event, and other users can place binary bets on the outcome of the event. Events on the platform are traded between $0.00 and $1.00, representing a collective belief in the possibility of an event. For example, if the “yes” value of the contract is $0.82, this means that the market believes that the probability of the event is 82%. However, unlike traditional betting, users’ bets are liquid and can be traded like assets, making the process more flexible and efficient. By allowing users to create unique markets and have real-time liquidity, PolyMarket uses the wisdom of everyone to become an extremely accurate forecasting model. Currently, there is no native PolyMarket token, and users can use USDC to place bets.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Polymarket.com

0xUniverse

0xUniverse is a Polygon-based game, supported by 0XE tokens, in which users can build spaceships and explore the vast universe. 0XE tokens are used as utility tokens in the game and used as “energy” to participate in battles and construction in the game. 0xUniverse also involves NFT through planetary NFT, which is an important part of the game. Each planet is unique, the rarity (and value) of the planet depends on the design and resources of the planet, and the player hopes to colonize the planet for profit. 0xUniverse also has an embedded storyline. Players can build “knowledge” by searching for ancient artifacts hidden on their planet and participate in the storyline.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

0xuniverse.com

In order to start playing the game, you first need your own planet and a spaceship. Spaceships can be built after accumulating “knowledge” on your home planet. Planets can be purchased on websites such as Opensea, and at the time of writing, the cheapest planet is only 0.0009 ETH .

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Market statistics

On-chain data

In 2021, the number of unique addresses on the Polygon network has doubled, from approximately 120,000 addresses to more than 35 million addresses in 8 months, an increase of approximately 28,000%.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Polygon (Matic) unique addresses

The number of daily active users on the Polygon network is a good indicator actually adopted, and it has also increased sharply over the 8-month period, and is proportional to the exponential growth of addresses. Daily active users on Polygon increased from approximately 750 in early 2021 to 192,000 on August 1, an increase of 25,000%.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Polygon daily active users

According to Nansen’s data, the daily transaction volume on Polygon surpassed the Ethereum transaction volume in May. At the time of writing, the daily transaction volume is almost 4 times that of Ethereum.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Comparison of transaction volume between Polygon and Ethereum

Although the transaction volume exceeds nearly 4 times, the total gas fee of Polygon is still cheaper than the gas fee of Ethereum, slightly less than 40,000 US dollars, while the daily fee of Ethereum is 21 million US dollars.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

Polygon daily gas fee

The result of this fee difference is that starting from 2021, the ratio of tokens deployed on Polygon to Ethereum has increased dramatically, from 0 (without Polygon deployment) to more than 73% in August 2021. This upward trend represents a major shift in the cryptocurrency community towards L2 solutions. This shift occurred at the beginning of the year when Ethereum gas rose, indicating that developers are using Polygon as a legitimate alternative to Ethereum.

In-depth interpretation of Polygon and its ecosystem from DEX to NFT chain games

in conclusion

Overall, since network congestion is still a problem for the Ethereum blockchain, scaling solutions like Polygon may gain huge appeal. In the next few months, you may see that most existing projects built on Ethereum start to turn to L2 solutions like Polygon to reduce transaction prices and increase speed.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/in-depth-interpretation-of-polygon-and-its-ecosystem-from-dex-to-nft-chain-games/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-08-19 11:32
Next 2021-08-19 11:36

Related articles