Chainlink Vs. Polygon – What’s the Difference?

Savvy traders seek to learn the key differences between Chainlink (LINK) and Polygon (MATIC), to improve their market insight. Both platforms are recognized as popular projects that have seen some highly publicized market movements since launch. When you zoom in a little further and look at the details, you learn that these networks are more like partners than competitors.

What is Chainlink?

Chainlink is a well-recognized project that entered the market back in 2014 under the name SmartContract.com. Chainlink is a decentralized oracle protocol. This firm specializes in running a network of off-chain sensors that can communicate data to and from blockchains.

Chainlink changed the game when its oracle network officially went live in 2017. Its ICO saw massive support. The firm succeeded in securing $32M in funding, which at that time, was among the most ever raised. In 2019, Chainlink inked a deal with Google to help secure its smart contract strategy.

Today, Chainlink is a crucial part of the DeFi market. Its oracle price feeds are how DEXs (Decentralized Exchanges) price their assets without using order books. The firm has helped drive adoption and is considered a pioneer in the market.

Source: Twitter @Chainlink

What is Polygon?

Polygon was built to help make sense of the growing Ethereum ecosystem. The developer-centric blockchain enables a higher level of interoperability between ERC-20 assets. The network also improves scalability and has inked partnerships with global payments system Stripe, and Instagram to launch collectible NFTs.

Polygon was built to improve the security of Ethereum Dapps as well. Developers can leverage all the familiar EVM tools and features but from a more open and powerful interface. Notably, there are already 37,000+ Dapps that have leveraged Polygon to improve scalability.

Polygon seeks to streamline Dapp creation in multiple ways. The ecosystem includes a helpful block builder. The Polygon edge feature has a modular framework that supports the creation of private and public networks. Notably, Polygon has completed +$1.8B in total transactions.

What Problems Was Chainlink Built to Alleviate?

Chainlink helped to solve one of the biggest roadblocks to blockchain adoption – how to send and receive off-chain data reliably. The network accomplishes this task by using a redundant blockchain of oracle sensors. These systems can be set up to monitor nearly any type of data.

In the past, a malicious or faulty oracle could cause a lot of problems for a blockchain system. For one, you can't refund on most public blockchains so if your oracle sensor executes a smart contract that issues a payout, those funds are lost. Additionally, there is no way to void that data from the network.

These issues led to Chainlink introducing self-healing oracles. This system uses multiple self-checking oracles to ensure the data is correct. These oracles can eliminate sensors that provide late or faulty information. This self-healing protocol provides Chainlink with more reliability than centralized alternatives.

These sensors are becoming increasingly popular. In the future, you could see Chainlink oracles in use across nearly every sector of the blockchain market. As such, Chainlink provides a critical link between blockchain and real-world assets.

What Problems Was Polygon Built to Alleviate?

It is easy to see from Polygon's structure that it was built to help reduce some of the technical drawbacks that Ethereum developers were stuck dealing with at the time. Remember, Ethereum is the largest Dapp ecosystem in the world. However, it was technologically outdated until its recent PoS update.

Polygon operates as a fully compatible alternative with lower gas fees, higher interoperability, programmability, and security. The developers went to great lengths to enable anyone to create blockchain assets on the network. The system features popular languages, tools, and EVM standards as well.

Source: Twitter @0xPolygon

Polygon improves the security of Ethereum Dapps through the introduction of modular security features. This structure offers security as a service which lowers development time. Additionally, the services can be upgraded as the Dapp community expands and needs to alter.

How Does Chainlink Work?

Chainlink leverages a variety of custom-built smart contracts to keep its oracles in check. The network sends out data requests to its vast network of oracles. These requests include the number of oracles needed and the task required. Notably, this request is registered on the Chainlink blockchain.

The network then issues a smart contract that issues multiple sub-contracts. This system will then verify that each oracle is part of the network and authentic. It will also review the history of the oracles in use to ensure they are a reliable source of data. Interestingly, every oracle receives a rank in the Chainlink ecosystem.

The network will then enable the nodes to bid on the oracle request. The contract will specify the amount and type of nodes needed to ensure a streamlined process. From there, the system will verify any data received.

The Aggregating contract is responsible for this step. It accomplishes this task by comparing the approved data and validating the information against other data sets. The process is fast and provides real-time info to Dapps and the crypto community.

LINK

The Chainlink community uses LINK as its utility token. This flexible asset can be used to pay for oracle services and more. LINK is a limited asset with 1,000,000,000 tokens slated for issuance over the life of the project.

How Does Polygon Work?

Polygon can be broken down into two crucial mechanisms. The Polygon framework is the first component that makes everything tick. Developers can create custom blockchains and digital assets like NFTs and more.

One of the main things that make Polygon so effective is that it's simple to use. The network offers one-click deployment on many assets. Users can go through the presets and build the ideal asset in minutes using the network's modules.

The modules streamline the programming of crucial features like governance, dispute resolution, execution environments, and staking options. This structure reduces programming time significantly and eliminates any technical barriers to adoption. Users can also send messages directly using the Polygon protocol service.

How to Buy Chainlink (LINK) and Polygon (MATIC)

Currently, Chainlink (LINK) and Polygon (MATIC) are each available for purchase on the following exchanges.

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. (Excluding New York & Washington state).

Chainlink Vs. Polygon – Advance Networks for All

After reviewing these options, it's easy to see that there are many differences between Chainlink and Polygon. Chainlink has become an integral part of the DeFi community with some of the most popular networks using its services. On the flip side, Polygon services the largest DeFi community in the world. As such, both platforms are likely to work together in the future on multiple networks.

To learn more, make sure to visit our Investing in Chainlink and Investing in Polygon guides.