POLYGON NETWORK
- February 9, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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POLYGON NETWORK
TOPIC: Science & Tech
Context- In the biggest round of investments in an Indian blockchain venture, marquee investment firms have infused $450 million in Polygon, a decentralised scaling platform for ethereum blockchain.
Concept-
Polygon Network:
- Polygon is essentially a “Layer 2” network built on the Ethereum blockchain to mitigate the traffic load on the main blockchain.
- It is a decentralized finance (DeFi) platform that facilitates peer-to-peer transactions with a focus on allowing users to transfer or swap tokens across different blockchains.
- For example, a customer could use Poly Network to transfer tokens such as bitcoin from the Ethereumblockchain to the Binance Smart Chain, perhaps looking to access a specific application.
- Tokens are swapped between the blockchains using a smart contract which contains instructions on when to release the assets to the counterparties.
- It is a layer 2 solution, i.e it works on top of Ethereum’s primary blockchain. Polygon uses side chains to unclog the main platform in a smart and cost-effective manner.
- Polygon’s multi-chain network provides an infrastructure for facilitating blockchain networks that can communicate with each other outside of Ethereum’s primary chain though it retains Ethereum’s liquidity, security and interoperability.