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What is Polygon (MATIC)? A Guide on the Ethereum Layer Two Solution

Polygon (formerly known as Matic Network) is a layer two (L2) scaling solution for Ethereum-compatible blockchain networks that enables fast, inexpensive, and secure off-chain transactions for payments and general interactions…

The post What is Polygon (MATIC)? A Guide on the Ethereum Layer Two Solution appeared first on CoinCentral.

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Polygon (formerly known as Matic Network) is a layer two (L2) scaling solution for Ethereum-compatible blockchain networks that enables fast, inexpensive, and secure off-chain transactions for payments and general interactions with off-chain smart contracts.

Polygon was initially launched in 2017 under the name of Matic Network with the purpose of creating a protocol and a framework for building and connecting Ethereum-compatible blockchains using a variety of technical solutions.

Polygon’s current flagship product is the Matic PoS Chain, an EVM-compatible sidechain secured by a permissionless set of PoS validators with a theoretical throughput capacity of 65,000 transactions/second on a single Matic sidechain. 

Polygon DeFi pulse

Value locked on Polygon, courtesy of DeFi Pulse

Polygon also built a modular and extensible framework for building Ethereum-compatible blockchain networks, written in Golang, called Polygon SDK, and is further working on two additional L2 scaling solutions, zk-Rollups and Optimistic rollups, based on zero-knowledge and fraud proofs respectively.

Who is Building Polygon?

The Polygon team has thirteen employees, with four technical co-founders, six additional developers, a product manager, and two marketing specialists. The core team is additionally supported by a community of reputable advisors, including Hudson Jameson from the Ethereum Foundation, Ryan Sean Adams from Bankless, Anthony Sassano from EthHub & SetProtocol, Pete Kim from Coinbase, and John Lilic – ex ConsenSys.

Polygon team

The core co-founding and development team consists of CEO Jaynti Kanani, COO Sandeep Nailwal, CPO Anurag Arjun, and VP of engineering Mihailo Bjelic.

Jaynti Kanani is a full-stack developer and blockchain engineer who’s previously contributed to many notable projects, including Web3, Plasma, and WalletConnect.

Sandeep Nailwal is a blockchain programmer, entrepreneur, and co-founder & CEO at ScopeWeaver, a firm that provides blockchain products and consulting services.

Anurag Arjun is a product/project manager who previously worked for AVP, IRIS Business, Cognizant Technologies, and SNL Financial.

Mihailo Bjelic joined the Matic team as a co-founder and VP of engineering only recently, when the project rebranded to Polygon. Before joining Polygon, Bjelic worked on similar blockchain scaling solutions as Matic.

What Problem is Polygon (MATIC) Solving?

Polygon is addressing Ethereum’s top limitations: scaling or transaction throughput and poor user experience. 

Rather than offering limited scaling solutions like its predecessor Matic—which utilized a technology known as Plasma that allows for the creation of customizable ‘child’ blockchains to process transactions off-chain before finalizing them on the main Ethereum chain—Polygon is designed to be a comprehensive protocol and framework for launching interoperable blockchains.

Scaling is Ethereum’s oldest and most hindering problem. Ethereum’s current transaction throughput capabilities are grossly insufficient to satisfy the growing demands of the community. DeFi is blowing up fast, and with most of it being built on Ethereum, the protocol needs to scale yesterday because the current transaction costs are pricing out a vast majority of the users. 

When it comes to scaling, blockchains can generally take two different paths: 

  1. Scale the mainchain or the so-called layer one of the protocol, where projects are typically forced tо choose between different trade-offs and make certain sacrifices in either decentralization, scalability, or security (aka the blockchain trilemma)
  2. Or, use side chains that operate on top of the mainchain (layer two) to offload some of the work and hence ease the congestion on the main chain.

In this regard, Ethereum’s approach is to take both directions simultaneously — i.e., scale on layer one by implementing sharding and transitioning to a proof-of-stake consensus mechanism (Ethereum 2.0), and also use sidechain solutions like the one Polygon is building to scale even more and sooner. 

Thanks to the Matic sidechain, the Ethereum network can scale significantly and do it effectively without making any sacrifices in terms of decentralization. Sidechains offer cheap and almost instantaneous transactions that are ultimately settled in batches on the mainchain, meaning that they leverage the robust security of the mainchain without making any compromises in terms of performance.

How Does Polygon (MATIC) Work?

Polygon’s so-called Matic Sidechain works like any other PoS-based blockchain, with its own infrastructure, token, user nodes, validator nodes, native dapps, and so on, except the transactions are ultimately batched and settled on the Ethereum mainchain (similar to how Bitcoin’s L2 scaling solution called Lightning Network works.)

You can think of the Matic sidechain as its own small interoperable ecosystem — part of the broader universe of Ethereum — offering users superior performance and user experience. Every decentralized application built on Ethereum or any other Ethereum-compatible blockchain can be ported to the Matic Sidechain and operate there in a much more performance-optimized environment.

Users who wish to interact with decentralized applications that have migrated to the Matic Sidechain need to:

  1. Approve the so-called Predicate Contract deployed on the Ethereum network, which locks the tokens to be deployed on the Matic Sidechain,
  2. Once the Predicate Contract has been approved; the next step is to deposit the tokens on the Matic Sidechain, which is done somewhat automatically. In this process, a particular smart contract called RootChainManager triggers another smart contract called ChildChainManager that mints the appropriate amount of locked or deposited ERC20/ERC721/ERC1155 tokens on the Matic network.
  3. Once the user receives their tokens on the Matic Sidechain, they can transfer them almost instantaneously and with negligible fees within the network. This means that trading or providing liquidity using a decentralized exchange such as SushiSwap on Matic will cost the user cents instead of $50-200, as is the case with using the same protocol on the Ethereum mainchain.
  4. Withdrawing the tokens back to Ethereum is a two-step process: first, the tokens have to be burnt on the Matic sidechain, and then the proof of this burn transaction has to be submitted to the Ethereum mainchain. Once this process is completed (takes about 20-30 mins), the RootChainManager smart contract will automatically deposit back assets to the user’s address (wallet) back on the Ethereum mainchain.

Polygon’s $MATIC Token?

The MATIC token (ticker: MATIC) serves a variety of purposes within the Polygon ecosystem, including paying for transaction fees (similar to how ETH tokens are used to pay for gas fees on the Ethereum mainchain), contributing to security through staking, and participating in the protocol’s decentralized governance by voting on Polygon Improvement Proposals (PIPs).

The current circulating supply of the MATIC token is 6.3 billion, while the total token supply (hard cap) is 10 billion. Users can also convert the MATIC token to other assets ported on the Matic Sidechain using different token swap or exchange protocols on the network.

Where Can You Buy Polygon’s $MATIC Token?

Polygon is available on popular cryptocurrency exchanges like Coinbase Pro, Binance, FTX, and Huobi Global

Modest Overview of the Polygon Ecosystem

In general, the Polygon ecosystem consists of multiple actors, including users, developers, stakers, and block producers.

Polygon users can use the Matic Sidechain to transact and interact with various Ethereum-based decentralized applications, just like they would do on Ethereum or any other blockchain, except Matic is much cheaper and faster.

On the other hand, the developers are expected to use the Polygon Network and the Polygon SDK stack to build their own sidechains or scale their own dapps to provide their users with a superior user experience.

The stakers on Polygon effectively play the same role as PoW miners on Ethereum. They need to stake (lock) MATIC tokens to participate in validating and verifying transactions on the Matic Sidechain. Moreover, using their staked tokens as voting power, they can elect so-called block producers (stakers that satisfy specific criteria) to produce the blocks on the sidechain.

Block producers are chosen by the stakers to produce the blocks and ultimately settle all transactions on the network. They need to stake a significant sum of MATIC tokens in order to qualify and be elected. 

Typically, the number of block producers will be relatively low because having fewer consensus creators allows for higher throughput and much faster transaction settlements. For example, the average block time on the Ethereum mainchain is ~20 seconds, while the Matic Sidechain mines or creates and settles a new block every second.

Final Thoughts: Will Polygon “Fix” Ethereum?

Perhaps the paramount aspect of Polygon’s value proposition is that it is one of the only layer-two scaling solutions built on Ethereum that has experienced moderate to mass adoption. 

Polygon helps to significantly improve Ethereum’s transaction throughput and solve the high gas fee problem, but it also plays a crucial role in improving the broader problem of blockchain interoperability.

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Source: https://coincentral.com/what-is-polygon-matic-a-guide-on-the-ethereum-layer-two-solution/

Blockchain

Bitcoin Price Could Reach $25,000 After Grayscale’s Unlock: JPMorgan

The unlocking of GBTC shares could increase the selling pressure and drive BTC’s price further south to $25,000, predicted analysts from JPMorgan.

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Although bitcoin recovered several thousand dollars after its mid-week crash, JPMorgan strategists still envision a bearish future for the asset. In their latest memo on its performance, they touched upon the upcoming unlocking of GBTC shares, which could drive the cryptocurrency down to $25,000.

GBTC Shares to Play a Crucial Role

Led by Nikolaos Panigirtzoglou, the analysts from the giant multinational investment bank have displayed a controversial approach to the primary cryptocurrency. They have gone from predicting a six-digit price tag to outlining multiple doomsday scenarios.

One thing that they have been consistent with is the role of the largest cryptocurrency asset manager – Grayscale. Earlier this year, they warned that BTC’s price might head for a correction as the inflows to the Grayscale Bitcoin Trust had declined.

In the latest memo reported by Bloomberg, they broached another bearish scenario involving the largest BTC-tracking fund. This time, they touched upon the unlocking GBTC shares.

As previously reported by CryptoPotato, institutional investors employing Grayscale’s services will receive access to 16,000 bitcoins in one day alone in July. The rest of the month will also see substantial quantities unlocked.


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After this six-month locking period and keeping in mind BTC’s value appreciation in this time frame, it’s safe to assume that at least some of the investors will decide to cash in. This, according to JPM, could lead to enhanced volatility and could bring sell pressure to the market.

Stack Funds also spoke about a similar possibility recently, but their paper argued that bitcoin might have already reached its bottom.

$25K on the Map for BTC?

Just a few days ago, bitcoin dropped to its lowest price point in almost half a year, below $29,000. It has recovered some ground since then and currently stands above $32,000, but JPM’s analysts still see more adverse price movements on the horizon.

“Despite this week’s correction, we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally. Despite some improvement, our signals remain overall bearish.” – they wrote.

Furthermore, they believe BTC’s price is close to being overvalued, which is evident from the comparison between its volatility versus gold. As such, they noted that “it would still take price declines to the $25,000 level before longer-term momentum would signal capitulation.”

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Source: https://cryptopotato.com/bitcoin-price-could-reach-25000-after-grayscales-unlock-jpmorgan/

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After the Miami Heat: FTX Partners With Major League Baseball (MLB)

FTX continues with its sports partnerships in the US by announcing a new collaboration with Major League Baseball (MLB).

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After joining forces with NBA’s Miami Heat, the cryptocurrency exchange FTX keeps its expansion with significant partnerships – this time is the US MLB. As a result, the trading platform has become the Official Cryptocurrency Exchange brand of the league.

  • According to a press release from earlier on June 23rd, FTX has entered into a “long term, global partnership” with MLB. This has become the “first-ever” official collaboration between “a professional sports league and a cryptocurrency exchange.”
  • Becoming the Official Cryptocurrency Exchange brand of MLB will enable FTX to “create increased brand awareness” and “continued innovation.”
  • The US branch of the trading platform has also “formed an agreement” with MLB Players Inc. to receive group player rights. As a result, FTX will use MLB highlights to create original content.
  • “It’s an honor for FTX to be the first cryptocurrency exchange to be associated with the history and tradition of America’s national pastime. At FTX, we strive each day to make a positive global impact, and there is no better partner for us to achieve this goal with than with MLB and its international fan base.” – commented the exchange’s CEO and Founder – Sam Bankman-Fried.

  • Noah Garden, the Chief Revenue Officer of the MLB, said his organization is “incredibly” excited to partner with a “global leader” like FTX. It will allow the league to adopt new technology and engage with fans.
  • This major development comes just months after the trading venue inked another partnership with one of the most popular NBA teams – the Miami Heat.
  • After the deal, worth $135 million, the team’s home court received a name change and is now officially called the FTX Arena.
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Source: https://cryptopotato.com/after-the-miami-heat-ftx-partners-with-major-league-baseball-mlb/

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John McAfee Reportedly Found Dead After Spain’s High Court Approved Extradition to the US

John McAfee, the person behind the well-known McAfee antivirus and a vocal proponent of cryptocurrencies, has been reportedly found dead in a prison cell in Barcelona.

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John McAfee, the veteran entrepreneur, and cryptocurrency proponent, has been reportedly found dead in his prison cell.

  • Two leading Spanish outlets, El Mundo and El Pais reported that the US entrepreneur has been found dead in his prison cell in Barcelona.
  • The news was also shared by Reuters Legal on Twitter.
  • At the time of this writing, there’s no other confirmation of his death or the reasons for it, though both Spanish outlets quote the Department of Justice.
  • Meanwhile, reports indicate, on several occasions, that McAfee committed suicide.
  • It’s worth noting that the news of his death started circling on the same day Reuters reported that Spain’s High Court approved the extradition order of the entrepreneur to the United States.
  • McAfee was charged with tax evasion, which he has been rather vocal about in the past.
  • Separately, he was also charged by the US SEC for fraudulently promoting initial coin offerings.

This story is developing. 

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Source: https://cryptopotato.com/john-mcafee-reportedly-found-dead-after-spains-high-court-approved-extradition-to-the-us/

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Overbit Surveys 3000 Crypto Traders

While the crypto sector continues its fluctuations, Overbit has released some interesting data regarding the community after its latest survey. The leading Bitcoin exchange conducted a survey involving 3,000 crypto traders across 87 countries. The survey highlighted details related to crypto exchange selection, trading strategies, and diligence techniques. The survey spanned two weeks and took …

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While the crypto sector continues its fluctuations, Overbit has released some interesting data regarding the community after its latest survey. The leading Bitcoin exchange conducted a survey involving 3,000 crypto traders across 87 countries. The survey highlighted details related to crypto exchange selection, trading strategies, and diligence techniques.

The survey spanned two weeks and took place back in March 2021. As per the report, over 34% of traders expected the crypto sector to go higher. Users should note that the cryptocurrency community was already witnessing a record-breaking high at that point. An interesting pattern was pointed out among the traders with 1-2 years of trading experience as they were highly optimistic about the industry.

Overbit Surveys 3000 Crypto Traders

Over 44% of them expected the sector to rise while most traders speculated a relatively less-bullish trend. As expected, Ethereum and Bitcoin remained the two most popular crypto choices among the lot.

The ownership statistics for Bitcoin did not differ much from 2020’s report. However, Ethereum experienced a substantial increase in this regard. Among the 3,000 traders, almost 65% owned Ethereum, which was 50% back in 2020.

Overbit Surveys 3000 Crypto Traders

Most of the correspondents (65%) stated that they left cryptocurrencies in exchange wallets. Surprisingly, only 25% of the respondents used cold wallets to store crypto. Among the traders, 9% accepted losing cryptocurrencies due to a security breach. However, almost 11% stated that they lost digital assets kept within a private wallet. The statistics showcased how exchanges are offering a better security performance than cold wallets.

Cheh Liu (Founder and CEO of Overbit) stated the crypto sector had evolved substantially in the past few years. Traders are showing more trust in crypto exchanges, eliminating the issues faced by new traders. In addition, the crypto sector is garnering global adoption, and as the standard financial means face decreased interest rates and inflation, traders prefer cryptos like Bitcoin over them.

The report supported the statement, revealing that 32% of the new traders only invested in cryptocurrencies in 12 months.

Overbit, the well-known Bitcoin exchange platform, recently revealed the findings of its latest survey. The report conducted back in March 2021 showcased interesting exchange selection, crypto preferences, diligence techniques, trading strategies, and more information.

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Source: https://www.cryptonewsz.com/overbit-surveys-3000-crypto-traders/

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