The introduction of blockchain technology in the world of cryptocurrency exchange. It has led to the creation of several types of investment options offering great returns for investors. Moreover, it has given a platform for developers and creators to develop many blockchain applications. NFTs (Non-Fungible Tokens) and cryptocurrencies are the perfect examples of blockchain technology that operate in a decentralised finance (DeFi) ecosystem. Decentralisation has resulted in the rising popularity of crypto assets, and NFTs. By lowering their cost and increasing the rate of transparency.
Non-Fungible Tokens or NFTs are known for their unique features and way of functioning. They are attached to smart contracts developed on the blockchain. The process to trade NFTs is done on the platforms created on the Ethereum blockchain. Not only this, many NFT platforms like Polygon have entered the crypto market to manage the high fees required to mint the NFTs.
What is Polygon’s NFT network?
Known by the name Matic Network previously, Polygon is a layer 2 blockchain that is found on top of Ethereum (layer 1 blockchain). Besides this, the minting of NFTs occurs outside the Ethereum network preventing the high gas fee charge.
Polygon as a layer 2 blockchain facilitates quick or instant transactions at reduced speeds. But, one of the challenges that hindered the trading of crypto assets was the process of sharing tokens among different networks. Thus, to solve this issue, a bridge like the Polygon Bridge was created which enabled asset transfers between the Ethereum blockchain and other blockchains like Polygon.
What is Polygon Bridge?
As the name suggests, Polygon Bridge is a cross-chain bridge between Polygon and Ethereum which helps in creating transactions between the two networks. The users of this network can use smart contracts and trade NFTs and ERC tokens to the two-way bridge.
The distinct features of Polygon also expand towards Polygon Bridge which provides a smooth and reliable process of converting the network’s other crypto assets to Ethereum by using a dual consensus architecture i.e., Proof-of-stake and Plasma bridges.
How does a Polygon Bridge operate?
When passing through the Polygon Bridge, the supply of tokens in circulation does not change as the tokens leaving the Ethereum blockchain network are locked and minted as Polygon tokens or coins in a 1:1 ratio.
The Polygon tokens are burned when the tokens come back to the Ethereum network and are unlocked.
How is a Proof-of-stake Bridge used?
- Connect your crypto wallet like one of the best cryptocurrency wallets in India i.e., WazirX to the Polygon Web Wallet and then verify it with your sign.
- Choose the token you want to deposit at the Polygon Bridge interface. Tokens like MATIC, ERC721, ERC and other tokens are supported by the PoS Bridge.
- To process the gas fee and transaction, the important notes will cover the indefinite time.
- Click on withdraw and follow the same process for transferring the tokens back. As stated in the notes, your tokens will be returned after a certain time period.
- Your tokens are added back to your crypto wallet once the transaction is authorised.
How is a Plasma Bridge used?
A Plasma Bridge is used when an investor is thinking to buy MATIC coins and wishes to transfer them to ERC721, ETH or ERC20 tokens.
- Click on ‘Switch to Polygon’ once your crypto wallet like WazirX is connected to the Polygon Wallet
- The Polygon network’s details will pop up on your crypto wallet’s extension. You can switch from Ethereum’s Mainnet to the Polygon network. Once the details are approved and will be able to see the number of MATIC tokens you purchased
- Following the same process as above, you can go back to the Polygon Bridge and click on ‘Withdraw’
- There are 3 transactions that need to be authenticated on the Polygon Bridge:
- Withdrawing tokens from the Polygon Wallet
- Begin a 7-day challenge period where any user can challenge the transactions on Matic
- After the above step, you can transfer the MATIC cons to your designated crypto wallet.
Plasma Bridge offers optimum security to your transactions whereas PoS Bridge provides faster transactions. Therefore, it is necessary to observe how Polygon will be able to maintain its unique benefits as the network is highly active in developing different projects in the world of cryptocurrency exchange.