The blockchain platform has brought improvement in digital processes. This has resulted in improved efficiency in business. However, improvements, it has brought certain challenges as well. One of the key elements of the blockchain platform is decentralization. The platform relies on the network infrastructure for achieving complete decentralization. This is because blockchain nodes are connected through a distributed network.
This has resulted in two specific challenges, increased network traffic, and increased transaction fees. To counter this, there are multiple layer 2 scaling solutions have come up, and one such solution is provided by Polygon Network. In this article, we will discuss Polygon use cases, that are based on the solution provided by Polygon Network.
What is Polygon?
With the growing demand for blockchain solutions, the demand for scalable solutions is increasing. There are multiple solutions available in the market, which provides complete scalability to the blockchain platform. They provide layer 2 scaling solutions which are gradually creating their footprint in the blockchain market. One such solution is Matic, which is an Ethereum Layer 2 scaling solution.
In 2021, Matic became Polygon Network. Polygon provides a framework that is not only scalable but it is interoperable as well. It has paved the way for multiple polygon use cases which can be developed on blockchain platforms. As a polygon blockchain development company, the polygon will be a top choice for creating Defi (Decentralized Finance) applications. In fact, Defi apps were one of the first polygon use cases.
Some of the top companies such as Decentraland and MakerDao initially adopted Polygon for DeFi apps on the blockchain. Today, there are multiple polygon use cases, apart from DeFi apps, which will be discussed in this article.
How does Polygon Work?
Before we deep dive into polygon use cases, it is very important to understand why a Polygon blockchain development company is preferred for blockchain solutions, and how Polygon works. Polygon networks make use of proof of stake-based protocol for communicating between the network nodes. These protocols are used for effective governance and management of network operations. Proof of Stake validates the transaction blocks at the node level.
A good thing over here is, that polygon use cases don’t rely much on Proof Of Work consensus, rather they create new blocks with minimal processing power. In this solution Matic tokens are used, which are validated and verified for transactions.
Polygon also uses Polygon Bridge which is a channel between two blockchain systems. This bridge is created with Proof Of Stake protocols. The Proof of Stake bridge in Polygon consists set of smart contracts. These smart contracts help to transfer the assets from the Ethereum network to the Polygon network. Users have to pay transaction fees while using the Polygon bridge. However, these fees are much cheaper compared to other networks.
Polygon Use Cases
One of the most important polygon use cases is digital payment. Digital payments require faster processing, which is achieved through decentralized applications, backed by the Polygon network.
In proven case studies, the Polygon network has helped in achieving almost closer real-time payment settlements in digital payment solutions. The Polygon brings a noticeable improvement in speed with the help of a dedicated API and a software development kit (SDK).
Multiple decentralized apps can operate along with multiple users and merchants. The best part is Polygon network supports all the cryptocurrencies. With instant digital payments on the rise, digital payment solution has been one of the most significant Polygon use cases. The tokens that are used currently for enabling payments are, ERC-20 and Ethereum.
DeFi is one of the most significant Polygon use cases. There are many sub-use cases within DeFi. One such use case is the evaluation of credit ratings of the users who are subscribed to the platform. This allows merchants to check the credit before enrolling the users for any kind of transaction. This is done through an assessment of transaction history.
It must be noted that the total value locked for Polygon in DeFi space stands at 5 billion US dollars, which is huge. The only other two operators with such a huge value are Binance Smart Chain and Ethereum. For a polygon blockchain development company, DeFi applications have been the top revenue generator.
Two of the biggest DeFi platforms Aave and Compound have already adopted Polygon for developing DeFi applications. Aave which implements the DeFi lending protocol has over 1 billion US dollars locked in the Polygon markets. There are two key reasons, which make DeFi one of the most popular polygon use cases.
First, Polygon is interoperable, and second, it provides a scalable solution for decentralized apps. DeFi has gained a lot of popularity in recent days, as it enables users to use financial services from anywhere, at any time irrespective of who they are. DeFi uses distributed apps to give complete control to the users over their wallets.
Polygon blockchain is used for NFT trading. One of the key benefits of using Polygon for NFT trading is low transaction fees. Another key reason why NFTs have become one of the popular Polygon use cases is access to the biggest NFT marketplace, OpenSea.
OpenSea has been one of the most popular NFT trading platforms. Users can not only purchase and sell NFTs on the Polygon platform but can also develop NFTs. Users can also configure Metamask Crypto Wallet for its usage on the Polygon network. Once configured, users can pay with the help of Matic, which is the native token on the Polygon platform.
By launching Polygon Studios, the polygon has already taken a step forward to establish itself in the gaming space. Polygon studios help in transitioning game applications from web 2.0 to web 3.0. Polygon Studios is meant for developers who want to develop games on the Polygon platform.
Polygon also supports developers in multiple ways. This includes community support, investments, and marketing assistance. This is one of the reasons why Polygon has become one of the top choices for game developers.
Gaming is one of the popular polygon use cases amongst other blockchain platforms, as Polygon provides required scalability for game performance. It also improves transaction speeds. In other words, Polygon manages to eliminate network latency, making the games much more effective and efficient. Blockchain-based gaming is yet to become popular amongst gamers, and it would not be wrong to say Polygon is leading this space. It is making the right investment, and also creating the right solutions.