Polygon (POL): The Ethereum Scaling Network That Became More Than Cheap Gas

Polygon has evolved from a straightforward Ethereum scaling solution into one of the most actively used blockchain networks in crypto. What started as a way to escape Ethereum's high transaction fees has grown into infrastructure handling billions of dollars in stablecoin transfers, real-world payment systems, and enterprise integrations. 

At Coinminutes, we track Polygon as one of the networks where usage metrics tell a compelling story beyond speculative hype.

1Polygon in Plain English

To understand what Polygon is, one must first grasp the unique features in its operation and how users and developers would benefit from this setup beyond basic blockchain functionality.

The One-Minute Explanation of Polygon

Polygon PoS is a proof-of-stake network that runs alongside Ethereum. In this configuration, users are able to process their transactions using Polygon at a fraction of the cost of Ethereum. As a result, users get faster transaction confirmations. Every 30 minutes, the validators on Polygon bundle these transactions together to form a checkpoint which they submit to Ethereum. This provides users with fast and low-cost confirmations for their transactions, while still benefiting from Ethereum’s base-layer security.

Polygon PoS runs parallel to Ethereum, offering cheaper and faster transactions.

POL is the native currency used to pay for transaction fees as well as stake with validators who provide the security to the network. The network maintains full EVM compatibility, meaning contracts written for Ethereum deploy to Polygon without code changes.

The Problem Polygon Was Built to Solve

Network congestion makes it too costly to do simple transfers using Ethereum gas fees. In peak times of mainnet activity, a simple token swap could easily cost $50 in fees. If your application is doing many small value transactions, these economic conditions are not feasible.

I was frustrated firsthand with high gas fees when I did a simple Uniswap transaction on Ethereum during the 2021 DeFi boom that cost me over $80. That experience showed me that scaling solutions were essential, not optional.

Polygon solved this issue by allowing users to execute their transactions off of Ethereum and still maintain their connection to Ethereum as their underlying security model. On Polygon, validators produce blocks much faster than on Ethereum, which allows for a greater amount of TPS and lower fee structures.

Polygon Chain, Polygon PoS, and the Broader Polygon Ecosystem

Terminology around Polygon can confuse newcomers because there are many things that have been referred to by the name "polygon." Polygon Chain (also known as Polygon PoS), is the primary network that users have been interacting with. It is a proof-of-stake network, in which POL acts as the native gas token and serves as the primary point of interaction for most current user activities.

In addition to the Polygon Chain, there are other components of the overall Polygon ecosystem. The Polygon CDK is an open-source framework that provides tools for developers to build their own custom blockchains. Agglayer aims to provide a unified interface for aggregating cross-chain liquidity. Because tracking the development of the ecosystem involves identifying what currently exists within the ecosystem and differentiating it from what has yet to be developed, the Coinminutes team focuses on the operational reality today versus the potential future promises made by roadmaps.

The broader Polygon ecosystem includes infrastructures such as Polygon CDK and Agglayer.

Sidechain, Layer 2, or Ethereum Scaling Network?

The classification of Polygon PoS has long been debated in the crypto community. From a technical perspective, the Polygon Chain is considered to be a sidechain since it uses its own method for reaching consensus independently of that used by Ethereum. Therefore, this would technically differ from a pure Layer 2 network such as Arbitrum or Optimism since those require the validation of transactions using the same consensus method as Ethereum.

Polygon considers itself an "Ethereum scaling network". While this does capture the practical relationship, it also indicates how users are trusting Polygon's validator group and governance structure rather than simply relying upon the Ethereum consensus.

2Under the Hood of Polygon

Polygon's technical architecture combines multiple layers working together to deliver fast, low-cost transactions while maintaining a connection to Ethereum's security.

The Three Layers Powering Polygon Chain

Polygon is structured in a three-layered manner. It consists of three main layers: Heimdall-v2, Bor, and the Ethereum layer. 

• Ethereum Layer: Contains stake contracts (where validators lock POL), contains checkpoint storage for state proofs of Polygon and manages transfer of assets via bridge contracts.

• Heimdall-v2: Runs as consensus and validation layer, based on CometBFT and Cosmos SDK.

• Bor: Functions as block creation layer. It is built on Go-Ethereum

Bor as the Block Factory

Bor is an extension of Polygon Chain’s block factory which aggregates transactions into blocks. Smart contract execution and state changes happen in this environment. Bor runs entirely compatible with Ethereum’s current execution model due to being built upon Go-Ethereum.

Bor is Polygon PoS’s block-producing layer.

New blocks are produced by Bor at very high rates, often every couple of seconds. High rates of new blocks per second contribute greatly to providing Polygon users a better response rate.

Heimdall-v2 as the Validation and Checkpoint Layer

Heimdall-v2 builds Merkle trees from Bor-produced blocks and publishes their roots (periodically) to the Ethereum blockchain. These periodic snapshots are called checkpoints. For each group of Bor blocks, a Heimdall-v2 validator will validate all blocks that have been generated since the last checkpoint. It builds a Merkle tree of the hash values of those blocks, then generates a new hash value (called the Merkle root) and publishes it in the Ethereum mainnet.

Heimdall-v2 validates Bor blocks.

A proposer from the set of validators will collect all signatures and submit the new checkpoint to the Ethereum mainnet. Heimdall-v2 is an entirely rewritten version of the original Heimdall consensus layer.

Checkpoints and Ethereum: Why the Connection Matters

Checkpoints are used for several things. They allow users to withdraw their assets from Polygon back into Ethereum. It can take anywhere from 30 minutes to 5 hours for an Ethereum user to submit a "burn" transaction on Polygon for those burned funds to be withdrawn.

Polygon checkpoints support withdrawals to Ethereum.

The second use for checkpoints is to anchor the state of Polygon to the state of Ethereum. This provides a method of recovering in the event of a failure of all validators or disruptions within the Polygon network. The checkpoint mechanism represents a security trade-off where Polygon gains speed and low costs by not putting every transaction on Ethereum.

Technical Design and User Benefits

There are numerous ways in which this layered architecture is beneficial to users. Transaction fees on Polygon are usually less than one cent. Real-time processing is supported by confirmation in a few seconds. Because of full EVM compatibility, developers can take their existing contract and move it to Polygon with no need to write new code.

From a research standpoint at Coinminutes, this architecture creates dependencies that should be monitored. Usability of Polygon depends on good health of all validators, good security of bridges, and submission of checkpoints as they are needed.

3The Token Shift: From MATIC to POL

In 2024, Polygon changed the native token from MATIC to POL. Besides the name change, several new features and the token governance model were introduced to this cryptocurrency.

POL as Polygon's Native Gas and Staking Token

As of September 2024, POL was adopted by the Polygon community as its new native token after the community approved the migration from MATIC. All transactions on the Polygon Chain are now charged in POL as gas fees. To produce blocks on the Polygon Chain, validators must stake POL. They also receive their block reward paid in POL.

POL replaced MATIC as Polygon PoS’s native gas and staking token.

This is more than just a rebranding process. The community governance proposals PIP-17 through PIP-26 outlined the potential use of POL within Polygon’s future plans for a decentralized blockchain network that aggregates multiple blockchains.

MATIC's Former Role in the Polygon Network

Before the transition, MATIC was used as the native currency of the Polygon Chain. As such, it served essentially the same function that ETH does on Ethereum. Users would pay MATIC gas fees to conduct transactions and interact with smart contracts, while validators would stake MATIC to run nodes and be involved in the consensus process. 

The total amount of MATIC was capped at 10 billion tokens. The team did not completely abandon their first coin, they just made an upgrade to expand their future vision for multi chain use cases.

The 1:1 Migration Path Without the Confusion

The migration of MATIC to POL was a 1:1 process. For each MATIC token migrated, users got exactly one POL token. The migration smart contract for ETH will accept MATIC and give you POL. Instead of burning your MATIC after migrating, the contract holds it. 

No additional steps were needed by holders who had MATIC on Polygon PoS at time of migration. Holders with MATIC on ETH would have to go through Polygon Portal’s user interface to manually approve and then swap tokens.

My migration of MATIC experienced a processing time of approximately five minutes and an Ethereum gas charge of around $8. It is clear from this experience, even if a token migration appears simple or straightforward, all Ethereum-related costs are inherited when executing the on-chain portions.

POL Emissions, Governance, and Long-Term Utility

Ongoing token emissions were implemented by POL to establish an alternative to MATIC's limited supply of tokens. Each year, the emission rate of 2% will be distributed between validator rewards and a community treasury. The EmissionManager smart contract (with upgradable code) has the capability to modify future emission characteristics through updates that are controlled by governance mechanisms.

POL introduced ongoing emissions with a 2% annual rate split between validator rewards and a community treasury.

Governance proposals follow the standard PIP voting process for POL holders to have a voice in network economics.

Token Migration Safety Checklist

Verify the POL contract address in official Polygon documentation before migrating MATIC. Fraudulent activity was a problem during this migration as scammers created fake migration interfaces. Always use Polygon Portal (portal.polygon.technology) for migration.

Confirm your wallet's network shows POL as the native token after you migrate. Contract developers should confirm all logic that receives bridged assets will handle POL instead of MATIC.

4Using Polygon in Practice

Moving from theory to practice means setting up wallets, bridging assets, interacting with dApps, and understanding how staking works on Polygon's infrastructure.

Practical steps to start using Polygon.

Setting Up a Wallet for Polygon Chain

To connect to the Polygon Chain, you need to add network settings to your EVM compatible wallet such as MetaMask. The network settings include the RPC endpoint, the chain ID (which is 137 for mainnet), the currency symbol (POL), and the block explorer URL.

Once the network has been added, you will be required to fund the wallet with POL tokens. To obtain POL tokens for use in the amoy testnet for testing purposes, you can get free testnet POL from Polygon’s faucet. On the mainnet, users usually acquire POL by buying it on an exchange and then withdrawing to their wallet.

Moving Assets Through Polygon Bridges

Polygon Portal is the official interface for depositing and withdrawing assets between Ethereum and Polygon. Users deposit tokens into a bridge contract on Ethereum and receive the corresponding assets on Polygon. It will be confirmed within minutes.

The withdrawals will burn the tokens on Polygon. Once the burn transaction is checkpointed to Ethereum, the user needs to create an exit transaction to unlock its funds. Withdrawal speed is asymmetric compared with deposit speed because of the checkpoint. 

In my testing, withdrawal times were unpredictable enough that I’d leave at least three hours for large transfers.

Exploring dApps on Polygon

Polygon is an extensive ecosystem that includes DeFi, NFT, gaming, and payment applications. DeFi platforms such as Aave, Uniswap, and Curve are operating in Polygon with the same user interface as they do on Ethereum and at much lower costs than the transaction costs of Ethereum. 

You interact with dApps in the same way as you would on Ethereum. Make sure your wallet has Polygon selected from the list of networks and that you have enough POL to pay for transactions.

Delegating POL to Validators

Delegating POL to validators allows token holders to earn staking rewards without running their own validator node. The Polygon staking dashboard provides the interface. Users first link their Ethereum wallet which has POL, then choose the validator to support, and finally set how much they will delegate.

The act of delegating is done through two Ethereum transactions (approval and delegation). Since there are many different validators to choose from, users may want to consider selecting multiple validators in order to reduce their exposure to risk. Typically validators charge a fee for supporting a user's stake, this fee can be around 5% to 10%.

I maintain delegated stakes with three different validators to diversify risk. This approach costs more in gas for initial setup but provides protection against individual validator performance issues or commission changes.

Unbonding, Rewards, and Validator Selection

Unbonding (unstaking) is a process that begins an 80-checkpoint wait prior to withdrawal of your staked POL. The checkpoint timeframe is typically about 40 hours. Moving your stake from one validator to another can be done in a single transaction with no delay. 

Rewards are distributed based on checkpoint activity and validator performance. The compounding nature of restaking rewards increases your returns through increased delegation of your stake. When selecting which validators to delegate to, please take into consideration their commission rate, historical uptime, total amount of stake they have, and their reputation within the community.

Deploying Smart Contracts on Polygon

The process of deploying smart contracts to the Polygon Chain is identical to that of deploying to Ethereum with some slight differences with respect to network configuration. The developer will set their deployment script up with Polygon’s RPC (Remote Procedure Call) endpoint and chain ID prior to deployment via Hardhat, Foundry, or Remix.

Costs associated with contract deployment are significantly less expensive when compared to the same on the Ethereum blockchain. A complex deployment may cost upwards of $200-$500 in gas on Ethereum but for a fraction of that price, around a couple of dollars, on Polygon.

5Polygon's Bigger Picture

Besides being a scaling solution for Ethereum, Polygon aspires to become a one-stop infrastructure provider while keeping its core network as the main operational ground.

Beyond Polygon Chain: CDK, Agglayer, and Aggregated Web3

The growth of Polygon continues to be a part of building out infrastructure for other projects. In addition to developing the Polygon Chain, Polygon CDK is a set of modular tools that allow users to launch ZK-powered chains. Agglayer is a representation of the cross-chain settlement layer (a unifying liquidity across all chains). 

These components remain in development or early deployment. While Polygon PoS has been operating as a well-established network, CDK, Agglayer, and related infrastructure will continue to evolve through their respective architectural designs.

The Main Benefits for Users and Builders

Compared with Ethereum mainnet, Polygon Chain offers cost savings and faster transaction times. All types of user interaction will be able to take advantage of Polygon’s economic model, including payment systems (i.e. sending money), games that require frequent communication with players, and many types of consumer-based applications.

Polygon Chain’s main advantages are lower costs and faster transactions than Ethereum mainnet.

Stablecoin usage is another strong example of an application of Polygon. Transactions on Polygon can occur at a fraction of the cost of those on Ethereum. Therefore, it makes economic sense for many to move USDC, USDT, and potentially other stablecoins via Polygon for everyday payment scenarios.

The Risks Beginners Should Not Ignore

Polygon Chain has security assumption differences compared to Ethereum. The validators that secure the Polygon Chain are fewer in number and require less overall staking than those on the Ethereum chain. There is an inherent bridge security risk as well since when assets move from one chain to another they do so by going through a contract which holds the assets at least until they can be moved. 

Token holders voting on protocol parameters via governance represents ongoing risk, such as centralization issues related to validator distributions and those participating in governance.

I size my positions in Polygon lower than my Ethereum positions simply due to their architectural differences. The risk-reward profile will differ significantly as it relates to investing in a sidechain versus investing in the Ethereum mainnet.

Polygon vs Ethereum: A Practical Comparison

Ethereum has the highest level of security because it uses an enormous number of validators in conjunction with a proof-of-stake consensus mechanism. Polygon is willing to sacrifice some of that security guarantee in order to provide faster transaction times and lower costs than Ethereum. For most applications, Polygon’s security model provides enough protection while offering much better economic value.

Ethereum offers stronger base-layer security, while Polygon trades some security guarantees for speed and cost efficiency.

The decision between which network to use can depend on the specific needs of your application. If you are building an application that requires high value transactions, using Ethereum's security would probably be the best option. On the other hand, if your application will require frequent interaction with users or machines, Polygon may offer faster and cheaper options.

Signals That Polygon Remains Relevant

Polygon Chain has a high volume of transactions as well as an increasing number of active addresses. Enterprises are using Polygon for stablecoin transactions, while some major technology organizations and financial institutions have begun integrating with Polygon. It is clear from these activities that there is growing mainstream credibility around Polygon. 

Continued development and protocol upgrades around Polygon show active maintenance. Growing stablecoin market cap on Polygon reflects expanding payment use cases rather than speculative trading.

6A Final Word on Polygon

With millions of users and billions in transaction volume, Polygon Chain has become an established network with proven usability. By trading off some security for speed and lower costs, Polygon creates usable infrastructure for applications that are cost-prohibitive under the current economic models of Ethereum.

At Coinminutes, our approach is fact-based rather than based upon marketing statements. In addition to having processed billions in transactions, Polygon has several active application offerings, and it currently supports stable infrastructure. Monitoring network health and other factors (such as governance) will help identify both the evolution of risk and opportunity within this ecosystem.