Polygon aims to provide faster and cheaper transactions on Ethereum using Layer 2 sidechains, which are blockchains that run alongside the Ethereum main chain with pretty much the same functionality such as smart contract support.
Users can deposit Ether to a Polygon smart contract, interact with them within Polygon, and then later withdraw them back to the Ethereum blockchain.
MATIC, the native tokens of Polygon, is an ERC-20 token running on the Ethereum blockchain. The tokens are used for payment services on Polygon and as a settlement currency between users who operate within the Polygon ecosystem. The transaction fees on Polygon sidechains are also paid in MATIC tokens.
Polygon transforms Ethereum into a full-fledged multi-chain system akin to other networks such as Polkadot, Cosmos or Avalanche while benefiting from Ethereum’s security, ecosystem and openness.