Who is Behind the Rise of the Polygon Network? Blockchain Consensus Mechanism Explained in One Article

According to Glassnode data, the 7-day average of the median Ethereum Gas fee on June 13 touched a 13-month low, reaching 19.955 Gwei. From May to mid-June, the gas fee on the Ethereum blockchain has been greatly reduced, and there are many factors that cause the gas fee to continue to fall. The reason is generally believed to be the collapse of the crypto coin market recently, which directly caused Ethereum The average daily transaction volume dropped from 1.65 million to 1.21 million in the recent past.

Image Source: The Block

The collapse of the cryptocurrency market has hit almost all crypto sectors on the market, including NFTs and decentralized exchanges, both in terms of trading capital and trading volume, which have declined to a certain extent. But another important factor that caused the Ethereum gas fee to fall is the release of many Layer 2 expansion solutions, of which Polygon (previously Matic Network) performed most outstandingly. As blockchain application sectors including data analysis engines, decentralized trading platforms, on-chain transaction aggregators, cross-chain wallets, etc. have integrated into the Polygon network, a short-term hot spot effect has been formed, and the average daily transaction amount has reached 7.5 million.

Polygon's predecessor is Matic Network, which uses sidechains for scalable, secure and instant blockchain transactions, while using the Plasma framework and a decentralized proof-of-stake (PoS) validator network to ensure asset security. Polygon is defined as the first structured, easy-to-use Ethereum expansion and infrastructure development platform. Its core component is Polygon SDK, a modular and flexible development framework that supports the construction and connection of two mainstream expansion paths: Secured chains (layer two chain) and Stand-alone chains (side chain).

At present, Ethereum is a PoW blockchain network. Since the steps to switch to the proof-of-stake consensus model have not been completed, its transaction processing capacity is limited, which usually causes network transaction congestion and higher costs. This is also the reason that Polygon based proof of equity (PoS) Consensus model is superior to Ethereum. This article will introduce several blockchain consensus mechanisms to allow users to have a clearer understanding of current popular blockchain networks.

Image is extracted from Internet

In the blockchain world,The consensus mechanism is vitial to ensure the normal issuance of digital currency, transaction confirmation, and maintenance of the normal operation of the network. At present, the three most common modes are PoW, PoS, and DPoS.

The Proof-of-Work Mechanism (PoW) was first used in Bitcoin mining. Its working principle is very simple, that is, the more the miner who provides the computing power, the greater the probability of obtaining the right to bookkeeping. Because of its simple algorithm and relatively high security, it has become an early mainstream mining method, such as Bitcoin, Ethereum, Litecoin, etc. However, with the increase in the difficulty of mining and the frequency of transactions, shortcomings such as excessive consumption of electric power and slow block production have gradually emerged, and will gradually become incapble of meeting the existing transaction needs.

Proof-of-Stake Mechanism (PoS), determines the probability of obtaining bookkeeping rights according to the currency age. The currency age refers to the number of coins multiplied by the number of days in which the currency is held. Once the bookkeeping rights are obtained, the currency age will be emptied with corrsponding mining rewards. Then, the next round of competition for the right to bookkeeping begins. Since this mechanism does not generate energy consumption, it speeds up block output and transaction confirmation, and improves efficiency.

But PoS is also not perfect. For example, users with a large amount of coins are more likely to get block rewards, which widens the gap between the rich and the poor. At the same time, it is very likely to lead to excessive centralization. Of course, this is also a problem that cannot be solved by PoS at present, thus it has lead to the birth of the Proof-of-Authorization Mechanism (DPoS).

The Proof of Share Authorization Mechanism (DPoS), through the voting of currency holders, selects nodes to produce blocks and process transactions, greatly shortening the consensus time, and will also distribute dividends to voters and block network maintenance nodes for their support and maintenance Rewards. Although the DPoS consensus mechanism optimizes the deficiencies of the first two consensus mechanisms, it also faces the centralization problem caused by election bribery.

In the blockchain network, although each consensus mechanism has its own pros and cons. However, in the end, they are all created to solve the three core problems of the blockchain: scalability, security, and decentralization. While people are still arguing over which is better, Layer1 or Layer2, the emerging new DApp ecosystem is attracting more traders with lower gas fees. Polygon is a typical example. The rights and interests behind it are the proof mechanism , which has greatly promoted the rise of the Polygon network.

Author: Gate.io Researcher Jacky.S

*This article only represents the views of the researcher and does not constitute as any investment advice.

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