Blockchain tech has proven to the world that it’s a force to reckon with. It has powered thousands of cryptocurrencies that have shaken the finance world to the core. Multiple industries are scrambling to integrate the tech to benefit from the remarkable characteristics of decentralization, immutability, and radical transparency.
But despite the attention they have garnered, blockchain-based applications still haven’t gone mainstream. Even applications based on Ethereum, the most popular decentralized applications (DApps) platform, are yet to receive wide-scale recognition. Even in the case of the wildly popular CryptoKitties game, it was only a matter of time before the entire Ethereum network was almost crippled because it couldn’t handle the sheer volume of transactions. Scalability issues and not-so-friendly user experiences are partly to blame.
The other problem is, for the few smart contract platforms that have managed to achieve high throughput levels, they tend to trade-off speed with decentralization. Also, most upcoming solutions create their own blockchains incognizant of the fact that platforms like Ethereum have already attracted a massive developer community.
Matic is a Layer 2 solution that seeks to solve the problems facing blockchain-based applications through the use of sidechains. For now, Matic focuses on the Ethereum blockchain but plans to extend its offerings for other smart contracts platforms in the future.
Let’s examine just how Matic intends to do this.
Matic is a platform that wants to solve the scalability and user experience issues of the blockchain, all while still letting decentralization thrive. Matic aims to achieve this through the following key features:
- Scalability: provide fast, secure, and minimal to low-cost transactions.
- High throughput: achieve up to 10,000 TPS enabled by multiple side chains for horizontal scaling
- User experience: provide a smooth interface and provide native mobile apps
- Security: Matic token stakers maintain and secure the network themselves
- Public sidechains: Matic supports public and permissionless side chains (as opposed to individual DApp chains) that are capable of supporting multiple functionalities
Matic’s Value Proposition
Matic’s value proposition lies both in its technical approach and its variety of potential use cases. Let’s see how:
#1. Matic utilizes a variant of MoreVP (More Viable Plasma). This framework facilitates protection for assets in the main chain, while generic transactions are secured by a proof-of-stake consensus mechanism. Matic sidechains can use the Ethereum Virtual Machine (EVM) and are thus capable of deploying solidity smart contracts, making it easy for Ethereum developers to use to scale their decentralized applications.
#2. Matic sidechains are capable of supporting the many decentralized finance (DeFi) applications running on top of Ethereum
#3. Matic’s core aim is to provide an enhanced user experience that’s unlike anything offered by today’s centralized applications
#4. Matic aims to support more base chains in the future, apart from Ethereum, as will be proposed by community members
Players of the Matic Ecosystem
The Matic ecosystem will comprise the following participants:
- End Users
- DApps developers. These are the businesses that will take advantage of the Matic platform to offer a better user experience
- Stakers: Stakers maintain the security of the network through a proof of stake consensus mechanism with a two-thirds majority. Stakers will also elect block producers amongst themselves, according to certain criteria. Stakers must purchase Matic tokens to qualify for the role
- Block producers: These are individuals who facilitate block generation. They are chosen by the stakers and have to purchase a significant stake to qualify for the role
The Matic Architecture
The Matic network features a three-tiered architecture that enables it to achieve its scalability and user scalability goals:
- The Staking and Plasma smart contracts on Ethereum
- Heimdall (Proof of Stake Layer)
- Bor (Block producer layer)
#1. Matic Smart Contracts
Matic runs a set of smart contracts on the Ethereum blockchain. These smart contracts carry out the following responsibilities:
- Managing staking functions for the proof-of-stake layer
- Delegating various management roles, including validator shares
- Managing plasma contracts for MoreVP, including checkpoints for sidechains
#2. Heimdall (proof-of-stake validator layer)
This is the PoS validator node that works together with staking contracts on Ethereum to facilitate the PoS mechanism on Matic. The Heimdall nodes are built on Tendermint, and they validate blocks, select the block producer committee, and so on.
#3. Bor (Block Producer Layer)
Bor is the block producer layer for the Matic network. Block producers are not permanent, but rather shuffled periodically in durations known as ‘spans.’
Potential Use Cases
The Matic network, with its goal to provide a scalable and user-friendly environment for users, will support various uses cases, including the following:
The Matic network will facilitate payments in crypto assets for users, payment APIs, merchants. The network will first support Ether, ERC20, and ERC721 tokens, with plans to add more cryptos in the future.
#2. Atomic swaps
Via Matic smart contracts, users will be able to pay and receive payments in their preferred crypto token.
#3. Liquidity providers
Individuals and entities will be able to use the Matic network to exchange a variety of tokens for others by utilizing Magic’s 0x liquidity pool. For Fiat, the Matic team it’s planning to onboard Fiat liquidity providers in major currencies.
#4. Decentralized exchange (DEX)
The Matic network will support trustless, reliable, and fast crypto trades. The DEX offers better security and solvency as compared to centralized exchanges.
The Matic network will support an Open-Identity system through which users can sign transactions without having to submit the private team for each single DApp. The system will provide users with control over their private keys.
The Matic network will support the buying, selling, and trading of in-game assets on its multiple side chains. Developers will get access to a fast, efficient, and secure platform to experiment with various games.
The Matic team believes in the mantra “simple and seamless.” For this reason, the network will offer a user-friendly app or structure with user-friendly crypto wallets for both users, user-friendly payroll dashboards, easy-to-use payment software development kits, and more.
To enhance the security and integrity of the network, the Matic network implements Fraud Proofs on the mainchain. Using this mechanism, users can submit the details of any transaction that they suspect is fraudulent. If the transaction turns out to be indeed fraudulent, the stake of the transaction owner is slashed, and the user who submitted the proof is given the slashed funds as a reward. The Matic team considers this a sort of ‘perpetual’ bug bounty program that can help to incentivize good behavior among network participants.
How Does the Matic Token Fit In?
The MATIC token is the native utility token of the network. It plays the following roles in the ecosystem:
- Participation and proof of stake consensus. For network participants to be chosen as block producers, they must stake Matic tokens.
- As a unit of payment by developers who wish to create DApps on the Matic ecosystem
- As payment of staking rewards to PoS stakers
The MATIC Token Distribution
The MATIC token was distributed as follows:
- 3.80% went to the private sale
- 19% went to the Launchpad token sales
- 16% went to the team
- 4% went to advisors
- 12% was reserved for network operations
- 21.86% went to the foundation
- 23.33% was reserved for the running of the ecosystem
Tokenomics of MATIC token
As of July 28, MATIC traded at $. 0.020814. With a market cap of $77, 987, 502, it was the 97th largest cryptocurrency in the world. The token has a 24-hour volume of $27, 493, 973, a circulating supply of 3, 746, 869, 854, and a total supply of 10 billion. MATIC’s all-time high was $0.045017 (May 21, 2019), and its all-time low was $0.003012 (May 09, 2019).
Where to Buy and Store Matic
You can purchase MATIC from any of several exchanges, including Binance, BitForex, BitMax, Poloniex, HitBTC CoinDCX, WhitBit, Folgory, Coinone, Omgfin, CEX.io, Cat.Ex and Oasis Exchange.
For storage, the Matic team provides the Matic Wallet available for iOS and Android. Third-party options include Trust, MyEtherWallet, Atomic Wallet, Ledger, and Trezor.
Matic wants to provide scaling solutions for smart-contract platforms through the innovative combination of sidechains, the Plasma Framework, and the PoS validation mechanism. Instead of trying to reinvent the wheel, Matic focuses on already working solutions that will complement its approach. The large developer community on Ethereum will find the Matic solution quite useful and timely.