As Ethereum gas prices rise, the chain that inspired Web3 is becoming gentrified, with high transaction costs pushing less wealthy users onto competing blockchains or scaling solutions.
This means that many use cases are becoming unfeasible in the proverbial layer-one downtown, and suburban neighborhoods are being developed to allow for a cost-effective layer-two blockchain experience.
Since getting acquainted with Polygon around the time of its launch in late 2019, Sameep Singhania has been an avid supporter of projects built on the protocol. In 2021, he created QuickSwap, a decentralized exchange (DEX) serving the needs of the budding Polygon ecosystem.
Singhania left a promising career as a software developer in 2017 to work as a freelance developer, only to find himself writing code for an array of blockchain projects in the DeFi and layer-two sector. Among the many projects he worked on, he spent 18 months with blockchain e-commerce site OpenBazaar, and served as lead developer for DeFi exchange ParaSwap.
Polygon is one layer-two solution built on Ethereum, and it offers users lower fees when transacting on-chain. QuickSwap is Polygon’s primary DEX and functions as a heart of the network.
A DEX for Polygon
After working on perhaps dozens of projects on Polygon from 2019 onward, Singhania “realized that to grow the Polygon ecosystem, we need a DEX.”
This was because while “99% of blockchain projects have a token,” listings on popular exchanges are not easy to arrange, and many users are not willing to create an account at an obscure exchange just to trade a particular token that is not listed elsewhere. A DEX can function as the central market square of a blockchain network, giving its users access to everything they need without having to venture to another chain.
Singhania recalls being encouraged to create a DEX by Polygon’s co-founder, Sandeep Nailwal, who put him in touch with Roc Zacharias, a marketer with Lunar Digital Assets. “That’s how we set up a team — we had developers, we had a marketing team, a perfect mix, and we launched the app,” he explains.
The QuickSwap interface. Source: QuickSwap
Polygon — previously called Matic Network, with MATIC remaining its ticker — is a layer-two blockchain. That means it’s a blockchain built on top of an existing chain. Whereas Lighting is an example of a layer-two, or L2, built on Bitcoin, Polygon is built upon Ethereum. As a result, Polygon-based tokens can be sent to Ethereum addresses, whose users can retrieve them simply by switching to the Polygon network on a DApp such as MetaMask.
The oft-stated advantage of L2 solutions is that they are more nimble than their behemoth parents, allowing for faster and cheaper transactions. With Bitcoin transactions costing over $10 and taking approximately 10 minutes for the first of six confirmations, it is clear that transacting on the parent chain is not practical for everyday transactions in El Salvador, for example, where laborers can earn as little as $100 per month. Instead, Salvadorans use Bitcoin Lighting, whose transactions cost as little as 1 satoshi.
Sameep Singhania wants to scale up crypto’s potential.
The transaction costs on the Ethereum network are much higher, making it “unusable by the small users” who are effectively priced out of using DeFi solutions or decentralized exchanges like Uniswap. In January 2021, a “normal Ethereum transaction on Uniswap cost around $100,” Singhania recalls.
“If I’m a normal user and I want to do a small trade, I cannot do it on Ethereum — the average transaction size on Uniswap is somewhere around $50,000.”
“Polygon is there to scale Ethereum,” Singhania says, which has its pros and cons. He further explains that while “Ethereum is the most secure solution out there,” it comes at the cost of high gas fees and relatively slow transaction times.
That’s not exactly desirable for an economy — smaller denominations of currency exist because not everything can be done with $100 bills. L2s are the answer for allowing smaller transactions on existing networks like Bitcoin and Ethereum. On Polygon, users can exchange Ethereum-based tokens, NFTs, and interact with smart contracts cheaply.
