You might see Polygon-based tokens in Best Wallet, or the option to transact on the Polygon network. But what exactly is it?
The Polygon network, formerly known as Matic Network, is a multi-chain scaling solution for the Ethereum network. It aims to improve the speed and reduce the cost and complexities of transactions on Ethereum (also referred to as improving Ethereum’s scalability).
Polygon is, therefore, like a high-speed train system for Ethereum, allowing for faster and more efficient travel (transactions) without congesting the main tracks (the Ethereum network).
It operates by creating a multi-chain network of blockchains, similar to how a train network operates with multiple lines and stations. This setup helps to offload traffic from the main Ethereum blockchain, thereby reducing congestion and fees.
How does Polygon compare to Ethereum?
Ethereum is one of the most widely known and used networks, so how does Polygon compare?
The Ethereum blockchain can only perform a maximum of 17 transactions per second (TpS). In comparison, Polygon’s network can handle a maximum of 65,000 transactions per second.
As Ethereum has a relatively low transaction per second rate, the network becomes congested quickly. When this happens, gas fees (transaction fees) often spike and cost anywhere from $50 to $150 per transaction. This high cost of transacting on the Ethereum network is a huge issue for many users.
However, Polygon offers a cheap alternative. Whilst the current average cost of gas fees on Ethereum sits at around $20, Polygon’s average cost of gas fees is around $0.015. That’s why many users in Best Wallet hold and trade Polygon network tokens.
Why is trading on Polygon cheaper than Ethereum?
Sending and swapping on the Polygon network is cheaper than on Ethereum, but why is this?
In short, the network employs Proof of Stake (PoS) as its consensus mechanism, where validators stake POL tokens (the native cryptocurrency of Polygon) to secure the network.
These validators help in processing transactions and creating new blocks, making the network run smoothly, securely, and faster. This helps suppress Polygon’s congestion and therefore keeps gas fees low.
Additionally, Polygon uses a technology called Plasma to move assets between the root chain (Ethereum) and child chains (Polygon sidechains). This also makes it cheaper to move assets from Polygon to Ethereum (or vice versa).
It is important to note Polygon is not in competition with Ethereum – instead, the networks rely upon and work together. Polygon’s intended aim is to improve the scalability of the Ethereum network, not replace it.
What are the advantages of using the Polygon network on Best Wallet?
Using the Polygon network allows you to send, receive, and swap Polygon-based tokens cheaply and quickly within the Best Wallet app. Additionally, it offers several other advantages:
Lower Transaction Costs: By using Polygon, Best Wallet users can enjoy significantly lower transaction fees compared to directly trading on the Ethereum network. This is particularly beneficial for users who perform frequent transactions.
Faster Transactions: Polygon provides a higher transaction throughput than Ethereum, meaning that transactions on Best Wallet can be processed faster when conducted on the Polygon network.
Access to a Growing Ecosystem: Polygon hosts a vibrant and growing ecosystem of dApps, from DeFi platforms and NFT marketplaces to gaming and entertainment applications. Best Wallet users can access and interact with these dApps seamlessly.
Enhanced User Experience: The integration of Polygon in Best Wallet offers a smoother and more user-friendly experience, especially for users new to the crypto space, by mitigating common issues like network congestion and high gas fees.
Staking Opportunities: Users will be able to stake their POL tokens with Best Wallet to participate in network security and earn rewards, providing an additional avenue for investment and passive income. These updates are currently in development and will be announced on the Best Wallet social accounts.
Moving tokens to and from Polygon
Transferring tokens between the Polygon network and another network, such as Ethereum, involves a process known as "bridging".
This is crucial because assets in a wallet on one network, like Ethereum, are not automatically available on another, such as Polygon, even when using the same wallet interface as Best Wallet.
You will soon be able to swap your tokens cross-chain (cross-network) in Best Wallet. To keep up-to-date on all the feature releases and updates, follow Best Wallet's social accounts.
Polygon’s native token
POL is the native token of the Polygon network, playing a pivotal role in its ecosystem and operations. The native token was previously MATIC, but Polygon underwent a blockchain upgrade and token migration on September 4, 2024.
Similar to ETH on Ethereum, POL is used to pay for gas fees (transaction fees) on the Polygon network. This includes simple transfers, smart contract interactions and dApp operations, ensuring that transactions are processed efficiently.
Additionally, POL holders can stake their tokens to participate in network security and consensus through Polygon’s PoS mechanism, earning rewards in the process. You can do this by connecting your Best Wallet to a staking platform/protocol.
The token also facilitates governance, allowing holders to vote on key network decisions, and is widely utilised in various DeFi applications, acting as a medium of exchange or collateral.
Things to remember
If you currently use or want to use the Polygon network in Best Wallet, ensure you own Polygon’s native token. Owning an amount of POL tokens will allow you to successfully swap and send any Polygon-based tokens. You will need POL to pay the gas fees on the Polygon network.
You can buy POL directly in Best Wallet through Onramper and their trusted third-party fiat-to-crypto providers.