A layer two, also referred to as a sidechain, is a separate blockchain network that connects to a parent blockchain or mainnet. Such secondary networks operate independently with their own consensus protocols to provide privacy and security while running in a parallel capacity to the mainnet.
A key benefit of sidechains is their ability to facilitate smoother asset exchanges between the mainnet and the secondary network. In practical terms, this means digital assets such as tokens can be securely transferred between blockchains, presenting users with a wider ecosystem for digital assets exchanges to happen.
To facilitate such transfers, a two-way peg is required. Interestingly, transfers do not actually take place. Instead, assets are locked onto the mainnet while an equivalent amount is unlocked in the sidechain. Smart contracts help to validate the locking and release of digital assets on either ends of the sidechain and mainnet.
Polygon is a layer two scaling solution created to run in a parallel capacity to the Ethereum mainnet. It caters to the diverse needs of developers by providing tools to create scalable decentralised applications (dApps) that prioritise performance, user experience, and security.
The Polygon chain is responsible for its own security and consensus protocol. This allows for innovation and optimisation, resulting in the Polygon chain boasting lower gas fees and faster speeds compared to the Ethereum mainnet.
Polygon also has its own cryptocurrency, called MATIC, which is used to pay fees on the Polygon network, for staking, and for governance (MATIC holders get to vote on changes to Polygon). The name “MATIC” comes from Polygon’s earlier years in development. After launching as Matic Network in October 2017, the chain was rebranded as Polygon in 2021.
XSGD and XIDR are now available natively on Polygon, which will leverage on the chain’s cross-chain interoperability to provide fast and efficient transactions.
StraitsX users are able to transfer and mint XSGD & XIDR (Polygon) directly from their StraitsX accounts starting today. XSGD & XIDR (Polygon) transferred into StraitsX accounts can seamlessly be converted back to SGD. Read our latest update to find out more.