Polygon vs. Ethereum - What's the Difference
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If you’ve been following the crypto sector for some time now, you might be aware of the fact that, despite scalability problems, the Ethereum network continues to draw a lot of attention, investment, and growth. In fact, Ethereum controls almost 56% of the TVL (total value locked) in the whole DeFi ecosystem.
Polygon, on the other hand, has just 3.3% of TVL and 180 protocols implemented on its networks. Nevertheless, it is difficult to overlook the fact that Polygon is a relatively young player in the DeFi space. As a result, MATIC, the native Polygon token, has risen more than 6,500% since early 2021.
This blog post will explain the key differences between the two blockchain systems – Polygon and Ethereum - and provide a head-to-head comparison of both technologies.
What is Polygon?
Originally introduced as MATIC - a network of blockchains for Ethereum projects built around the Proof-of-Stake (PoS) mechanism - was renamed in 2021 as Polygon. Polygon, in a nutshell, is an Ethereum Layer2 solution that is highly compatible with Ethereum’s architecture and addresses the most pressing issues facing Ethereum today, namely, slow transactions and excessive gas fees.
Polygon is, simply saying, a blockchain platform created on top of the Ethereum network to deliver a quicker and less expensive Ethereum-like experience. However, it’s far more than that. The platform has evolved into perhaps the most prominent scalability solution for Ethereum projects over the years, and it now provides multiple effective tools and SDKs for blockchain developers.
Polygon is a name that cannot be overlooked, with an ambitious staff, a passionate community, well-known collaborations, and a commitment to improving the overall Web3 experience.
Polygon, consequently, seeks to make Ethereum transactions quicker and cheaper by utilizing sidechains. A sidechain is a blockchain that is connected to the primary blockchain (in this example, Ethereum) by a two-way peg. The peg allows for the movement of data and assets throughout the primary chain as well as the side chains while retaining the integrity and immutability of the main network.
In addition to that, Polygon allows you to create several sidechains, each featuring its own regulations and governance systems. This allows developers to design tailored blockchain environments for their individual requirements.
What is Ethereum?
Ethereum, which debuted in 2015, is the second-largest cryptocurrency by market capitalization, second only to Bitcoin. However, unlike many other cryptocurrencies, it was not designed solely to be a digital currency. Instead, Ethereum’s creators set out to build a new type of international, decentralized computing platform that extended the protection and transparency of blockchains to a wide range of applications.
Ethereum, therefore, is best considered a well-rounded system that allows you to create apps and launch business ventures, buy assets, perform financial transactions, and communicate without relying on a central authority. It’s not necessary to send your personal information to be able to use Ethereum; you remain in control of all your data and what is shared. Ethereum has its own token, Ether, which is used to pay for specific Ethereum-based network operations.
The blockchain can be used by anyone to program or develop secure applications. Having its own token means the network is independent of third parties to perform transactions or compensate members for effort rendered in favor of the blockchain. It can also be used to pay for physical items and services if approved.
Ethereum was created with the goal of being scalable, configurable, safe, and decentralized. It’s the blockchain of preference for developers and businesses designing new technologies based on its blockchain to transform the way many industries work and how we lead our lives.
Ether, Ethereum’s native token, is similar to Bitcoin, in that it can be used to purchase and trade goods and services. What truly distinguishes Ethereum from other cryptocurrencies is that users can create apps that “run” on the blockchain in the same way that software “runs” on a computer. Personal data and complicated financial information may be stored and transferred via these programs.
Polygon’s structure can be best understood as a four-tier system built on top of the Ethereum layer, the safety layer, the Polygon networking layer, and the execution layer.
The Ethereum layer is simply a collection of smart contracts built atop Ethereum. Transaction completion, staking, and interaction between Ethereum and the multiple Polygon chains are all handled by these smart contracts. The security layer operates alongside Ethereum and offers a “validators-as-a-service” function, thus enabling these chains to benefit from an extra layer of security.
After this, there are two more essential levels. The very first is the Polygon networks layer, which makes up the entire ecosystem of Polygon-based networks. Each of them has its own neighborhood and is in charge of local unanimity and block production. The second level is the execution layer, which is responsible for Polygon’s Ethereum Virtual Machine (EVM) implementation for smart contracts.
Polygon-based chains can communicate with one another as well as with the main-chain of Ethereum, thanks to Polygon’s flexible message-passing features. This will open the door to a number of new use cases, including interoperable decentralized programs (DApps) as well as the simple trading of currencies between networks.
Furthermore, Polygon employs a tweaked Proof-of-Stake consensus algorithm that allows for unanimity with each block added to the network (to obtain consensus using classical Proof-of-Stake, several blocks must be processed.) To confirm the Polygon network’s transactions, network participants must stake or agree not to trade their MATIC tokens. After verification is complete, stakers are rewarded with newly minted MATIC tokens.
The Ethereum network, like Bitcoin, operates via thousands of computers throughout the world due to people acting as “nodes” as opposed to a centralized server. As a result, the network is decentralized and highly resistant to breaches, and it is basically incapable of going down consequentially. It makes little difference if one computer fails since thousands of others keep the network running.
Basically, Ethereum is basically one decentralized system that operates an Ethereum Virtual Machine computer (EVM). Since each node has a copy of this software, all interactions must be confirmed so that everyone’s copy may be updated. Just like Polygon and many other cryptocurrencies, Ethereum involves the use of blockchain technology. Visualize a very big chain of blocks. Every newly-generated block receives all the stored information in each block. A unique copy of the blockchain is, thus, rolled out throughout the entire network.
A network of automated systems that obtain a mutual agreement on the reliability of transaction information helps validate this blockchain. As a matter of fact, the blockchain cannot be changed until the network achieves an agreement. This is what makes Ethereum an extremely secure virtual currency.
Consensus is achieved via the use of an algorithm known as a Proof-of-Stake. In this model, a number of nodes, known as validators, produce new blocks and collaborate to validate the data contained inside them. The blocks hold information on the blockchain’s current status, a list of attestations (a validator’s signature and vote on the block’s authenticity), transactions, and a lot more.
Key Features of Polygon
Polygon offloads transactions from the primary Ethereum chain via a network of side chains, allowing for better transaction processing.
Support for WalletConnect, traditional mobile apps, and SDK, and developer isolation from main-chain to the Polygon chain are also available.
Polygon is completely compatible with the EVM, which means that programmers can operate on Polygon using the same tools and languages that they would on Ethereum.
Matic sidechains, unlike most of the individual DApp chains, are accessible to anyone in the world, permissionless, and fully capable of supporting a wide range of projects and protocols.
Polygon is flexible, meaning it may be modified to meet particular requirements and use cases.
Key Features of Ethereum
Ethereum enables programmers to generate self-executing smart contracts in which the conditions of the buyer-seller agreement are directly encoded into the code.
A DApp is a decentralized application. Ethereum enables the creation of consolidated apps, otherwise known as decentralized applications.
Ethereum employs the most active and extensive team of developers in any blockchain network, in addition to a continuously expanding ecosystem of tools and resources for developing DApps.
Ethereum Virtual Machine
Ethereum offers the core technology architecture and software that enables smart contracts to be understood and interacted with.
Ethereum might be the ideal blockchain solution today for high-profile investors and developers to generate yield and introduce new tokens for a wide range of DeFi projects.
Polygon, on the other hand, intends to make it faster, cheaper, and more convenient for users to access and utilize Ethereum technology by delivering a scaled-up version of the Ethereum network with reduced fees and quicker transaction speeds.
While there may be some uncertainty regarding Polygon’s significance in the future as Ethereum implements its latest developments and innovations, Polygon currently performs an important role in the larger crypto ecosystem.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.