What is SX Network? A Look at Polygon's First Layer 2 Blockchain by@Cryptonite

What is SX Network? A Look at Polygon's First Layer 2 Blockchain

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Cryptonite

Cryptocurrency & Tech Writer.

Polygon has established itself as a leading Layer 2 network for scaling the Ethereum blockchain. Its low fees and ultra-fast transactions have been instrumental in its rapid growth.

However, Polygon has another Layer 2 network built on top of its platform, SX Network which originally catered to the crypto betting community and has expanded into a blockchain development platform.

In this post, we'll be looking at SX Network and how it works.

What Is SX Network (SX)?

SX Network (SX) is an Ethereum compatible, smart contract platform built using the Polygon Software Development Kit (SDK).

The network is built specifically to scale betting, decentralized finance (DeFi), and non-fungible token (NFT) applications.

The SX Protocol was launched in March 2018 on the Ethereum blockchain initially, however, the team migrated to the Polygon blockchain due to high gas costs.

It was one of the first applications to launch on the Polygon network when they migrated in September 2020.

SX Network is Polygon's first Layer 2 blockchain and it's being developed in collaboration with the Polygon team.

It is being built to complement both Ethereum and Polygon and it will be tied to both blockchains for added security.

Since the blockchain is being built with the help of Polygon, SX Network will inherit Polygon's Total Value Locked (TVL) which currently stands at $5.47 Billion.

The SX blockchain is also Ethereum Virtual Machine (EVM) compatible, making it easier for Ethereum developers to build applications on the network.

This also enables users to use Ethereum wallets, wallet addresses, token names and block explorers when accessing the network.

How Does the SX Network Work?

SX Network consists of five main components:

  1. SX Chain — The base layer for the entire network of SX applications including the SportX exchange.
  2. SX Protocol — Set of smart contracts which power SportX and governs non-custodial and peer-to-peer prediction markets
  3. SportX — Consumer focused, prediction market application where users can interact with the SX protocol.
  4. SX Token — Native cryptocurrency used for governance, managing of the SX treasury and rules of the SX Protocol.
  5. SX Treasury — On-chain fee pool that receives 55% of all SX, along with 100% of the fees generated by the SX Protocol (Treasury)

Due to it's EVM compatibility, Ethereum dapps like Automated Market Makers (AMM's), Yield Farms, Decentralized Exchanges (DEX's) and lending protocols can easily launch on the SX Chain.

The SX Network has a working product known as SportX, a decentralized prediction market platform that has processed over $40 Million in volume across over 500,000 bets since its launch.

SportX uses non-custodial, Central Limit Order Book (CLOB) liquidity and the SX governed community treasury to power its platform.

The team behind SX Network also built the first prediction market liquidity mining program to help with powering SportX.

SX Network's On-Chain Community Ecosystem Fund

SX Network has set up a treasury to make it easier for decentralized applications (dapps) to migrate or launch on their network. SX Token holders will decide how funds from the treasury is spent.

This will help to ensure that dapps running on the SX Chain are economically aligned with SX Network.

The SX Token

SX Network's native cryptocurrency SX is used for the following purposes:

  1. Governance - Users can stake SX tokens to vote on important decisions regarding the governance of the SX Network. The more SX tokens staked, the more voting power a user has.
  2. Staking - Users can stake SX and earn additional SX tokens as reward for securing the network.
  3. Fee Discounts - Holding SX gives users a fee discount on any exchanges within the SX Ecosystem.

Why SX Network is a Promising Compliment to Polygon

Whilst SX Network is built to complement Polygon and Ethereum blockchains, it does have some benefits for users and developers who may choose to use the SX Chain.

The SX Network stands out as good compliment to Polygon for a couple reasons:

  • Ownership - SX Network is the first blockchain network where token holders are granted ownership over applications that launched on the SX Chain.
  • Lower Costs - Transactions on SX Chain are up to 1,000 times cheaper whilst inheriting the security of the Polygon and Ethereum blockchains.
  • Large Betting Community - SX Chain may be attractive for developers who plan on creating prediction market related dapps due their already existing large community of users.
  • Funding - Developers get access to funding from the SX Treasury fund which currently includes over 20 businesses.

Investors should keep an eye out for SX Network too, since it's Polygon's first Layer 2 blockchain, transactions are much cheaper than Polygon's already low fees.

This will attract dapp developers who will help the ecosystem to grow, and increase the usage of SX Token, which in turn will drive up demand and increase its value.

Being an SX Token holder gives investors ownership in the network's native applications and voting rights to decide on how the platform is managed.

How to Invest in SX Network (SX)

If you decide to invest in SX Network (SX) you can buy the token from Sushiswap on the Polygon network. It's also available on QuickSwap, Bitfinex, Apeswap, IDEX (x3 farm multiplier) and many other exchanges.

I hope you enjoyed this story!

You can keep up with me on Twitter for more stories.

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