What is the Matic Network?
The Matic Network is a Layer 2 scaling solution that strives to tackle crypto scaling problems by utilizing side chains for off-chain computation. It does this while ensuring asset security via the Plasma framework, using a decentralized network of Proof-of-Stake (PoS) validators. The Matic Network has contributed to the Ethereum ecosystem by working on implementations of Plasma MVP (Minimum Viable Plasma), WalletConnect protocol, and Ethereum’s event notification engine, Dagger. Its native currency is known as MATIC.
History of the Matic Network
The MATIC IEO was one of the first and most successful IEOs hosted on the Binance Launchpad. It lasted for three days in the month of April 2019, during it managed to raise about $5,000,000 in token sales. Matic has partnered with several blockchain projects, including Decentraland, Quarkchain, and Maker DAO. In October 2019, the MATIC market cap value surpassed $35 million, placing it in the top 100 coins by market cap.
How Matic Network Works
The Matic Network interoperates exclusively with the Ethereum blockchain. Staking of the Matic token is performed in order to be eligible for participation in the Proof of Stake consensus mechanism of the network of side chains. The Matic token is also used to pay mining rewards to the POS stakers as well as transaction / gas fees. Each time a transaction happens, a small percentage of transaction fees are kept and reserved in-protocol to support the building of projects related to enhancing the Matic Ecosystem and will be disbursed using on-chain governance.
The MATIC token has three primary use cases:
- Participating in the Proof of Stake consensus. Matic side chains enforce consensus using a Proof of Stake (PoS) layer in which network participants stake Matic tokens in order to participate as validators.
- Paying for transaction fees in the network. The transaction fees on Matic side chains are paid in MATIC tokens. The more users onboard to use the apps on Matic Network, the more the transaction volume and hence the transaction fees.
- Dapp development. Having taken inspiration from Livepeer and its “protocol funding the ecosystem” model, Matic intends to enable a separate staking mechanism for supporting ecosystem projects. This will serve to create a fund out of the “block rewards” that can help support developers working on features and DApps needed by the network to get a part of block rewards. This mechanism is funded by reserving a percentage of the transaction fees in-protocol to support the projects building for enhancing the Matic Ecosystem.
Its key features include:
- Scalability: Fast, low-cost and secure transactions on Matic side chains with finality achieved on main chain and Ethereum as the first compatible Layer 1 base chain.
- High Throughput: Achieved up to 7,000 TPS on a single side chain on internal testnet; Multiple chains to be added for horizontal scaling.
- User Experience: Smooth UX and developer abstraction from main chain to Matic chain; native mobile apps and SDK with WalletConnect support.
- Security: Matic chain operators are themselves stakers in the PoS system.
- Public Side chains: Matic side chains are public in nature (vs. individual dApp chains), permissionless and capable of supporting multiple protocols.