Matic Network, a Plasma-based layer two scaling and performance solution for Ethereum, has been making significant strides with its beta mainnet, which officially went live at the end of September. Culminating in a recent post enumerating the staking dynamics of the network, Matic’s anticipated launch will mark a subtle milestone in crypto — the long-awaited fruition of projects that arose out of Ethereum’s scaling woes.
Additionally, Matic will be one of the first live implementations of Plasma, a complex technology web of root chains and side chains that can drastically bolster the performance of decentralized applications (dapps) on Ethereum.
“The β-Mainnet is Matic Network’s sidechain (iteration 2) working on the top of Ethereum Mainnet,” details the Matic official blog post. “The developers can build and test their full end to end applications with this version as well.”
At a time when bootstrapped blockchain competitors like Cosmos, Algorand, and Polkadot are seeking to absorb some of Ethereum’s market share, Matic presents an intriguing case study at the convergence of two prominent crypto narratives.
High-Performance Infrastructure for The Next Generation of Finance.
Much of the focus in Ethereum circles has shifted to the ballooning DeFi ecosystem and the looming Ethereum 2.0 transition in recent months. However, projects like Matic represent more flexible, bespoke solutions for dapps that require performance on public blockchains — like DeFi.
In particular, Matic’s blend of Plasma and proof-of-stake (PoS) validation can empower up to 65k transactions per second (TPS) on a single Matic sidechain. For some context, Matic functions as a virtual layer on top of Ethereum’s primary blockchain (i.e., root chain), offloading the execution of smart contract tasks and transactions to sidechains, the “Matic” chains.
Similar to the tendrils of branches stemming from a tree trunk (Ethereum), these sidechains process exceptionally rapid and low-cost transactions using their own PoS consensus, with the actual final settlement tethered Ethereum’s root chain.
Crafting a more scalable layer on top of Ethereum also breeds other specific advantages for dapps that want to build on Matic.
For example, the user interface and UX can be improved by abstracting away the underlying complexity of Ethereum, making dapps more conducive to mainstream user preferences. Similarly, Matic is set to eventually roll out interoperability between other networks, enabling a “plug-and-play” dynamic between assets on the sidechains of different networks.
In the context of DeFi, scalable, high-performance infrastructure is congruent with the long-term vision of building a legitimate alternative to conventional finance. From micro-insurance products to decentralized financial leverage products, DeFi platforms that can support wide-ranging functions with scalable liquidity require a performant foundation.
Many DeFi projects on Ethereum remain localized to small communities of early investors and governance participants, but that will change should arbitrage and market-making strategies help the market mature to a level appealing to financial institutions.
With Matic, DeFi projects that begin to attract vast amounts of liquidity and users will look to flexible, scalable solutions like Matic for a frictionless experience.
Compatibility and Convenience Are King
Open-source projects are exploding in popularity, forging global communities of contributors and supporters. Ethereum is one of those rapidly growing projects, which gives it some powerful network effects in crypto. And many projects building on Ethereum are wont to understand the relationship between users, convenience, and liquidity when it comes to DeFi.
For its part, Matic is catering to Ethereum developers by allowing them quickly port over existing smart contracts to its sidechains — a boon of developer convenience.
“Matic Chains are Ethereum Virtual Machine (EVM) compatible and extremely developer-friendly,” details the Matic Medium post. “Deploying smart-contracts is similar to deploying contracts on Ethereum using tools like Remix, Truffle. Teams developing on Ethereum can immediately port their existing smart contracts and begin testing on Matic sidechains.”
Add in Matic’s partnership with MakerDAO, which recently extended to multi-collateral lending (Sai), and new doors open for developers seeking to build commerce applications that leverage the Dai stablecoin.
Complementing platforms like MakerDAO will only serve to attract more developers, and eventually, users to Matic.
In the process, market makers and arbitragers can wield atomic swaps and atomic batched transfers to smooth market inefficiencies ranging from differing interest yields on lending platforms to spreads between DEXs. Markets eventually mature, infrastructure scales to attract more institutional liquidity, and the axiom of “liquidity begets liquidity” materializes.
That eventual fruition of a more mature Ethereum is a vision that many developers and users have anxiously awaited since the ICO mania of late 2017.
Now, that vision looks more like a matter of “when” than “if,” and Matic’s looming mainnet launch is set to mark a pivotal moment in the trajectory of Ethereum — the transition of scaling projects from hype to reality.