Polygon(MATIC): How Does It Work, Benefits and Price Prediction
Polygon (MATIC) is a scaling solution for Ethereum, and MATIC is the name of the token that powers the Polygon Network. MATIC was created in India in 2017 by a team of blockchain developers, including Anurag Arjun, Sandeep Nailwal and Jaynti Kanani. Previously called the Matic Network, these developers would later rebrand it as Polygon.
This blog helps you understand what a polygon is, how it works, its features, price prediction and more. Read on!
What is Polygon Crypto?
Over the years, Ethereum has bought all kinds of advancements in the cryptocurrency space, including smart contracts and high-interest paying decentralised applications (DApps). However, it faces three big challenges: low throughput, high transaction fees and limited options for developers.
Polygon is a decentralised scaling solution that uses Ethereum blockchain networks. It tackles a number of problems faced by the Ethereum network using a parallel blockchain (sidechain) that facilitates faster and cheaper transactions. This allows developers to create secure, user-friendly and scalable DApps.
What is the Polygon MATIC Token?
MATIC is the Polygon network’s native token, and it is an ERC-20 token. Since it is on the Ethereum blockchain, one can store it in Ethereum wallets like MetaMask and Eidoo. Moreover, this polygon token has performed much better in 2022’s bear market than most other cryptocurrencies.
This Ethereum-based token powers Polygon’s networks. One can also use MATIC tokens to pay Polygon’s transactional fees and participate in proof-of-stake (PoS) validations.
Moreover, it is compatible with Ethereum-based digital currencies. You can purchase these using a variety of decentralised exchanges like Sushiswap and Uniswap. You can also use Polygon Bridge to exchange assets between Polygon and Ethereum.
How Does the Polygon (Matic) Work?
A huge number of DeFi (Decentralised Finance) applications support the Polygon cryptocurrency. Its layer- 2 scaling solution and PoS protocol drives popularity among users. In Polygon’s PoS protocol, validators on the network stake MATIC tokens to validate new blocks before they are added to the blockchain.
Polygon’s Matic Chain serves as a commit chain to the main Ethereum chain. A commit chain functions as a transaction network that operates close to the real chain. Therefore, in Polygon’s case, it works alongside Ethereum.
The Polygon commit chain groups up transaction clusters and processes them together before it sends all this information back to the Ethereum blockchain. To understand this, let us say that Polygon takes a snapshot of all transactions and sends it to this Ethereum chain.
Thus, it does not have to process a lot of data to validate transactions. This allows Polygon to validate up to 65000 transactions in a second.
Furthermore, Polygon’s architecture works according to a 4-layered system which consists of the following layers:
- Ethereum Layer- This layer is responsible for transaction approval, staking and interactions between Ethereum and other blockchains.
- Polygon Networks Layer- This mandatory layer is responsible for handling the local consensus of new blocks added to Polygon.
- Security Layer- It provides additional security alongside Ethereum and is useful for validation purposes.
- Execution Layer- Its main function is to execute smart contracts on the actual Polygon Blockchain.
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What Are the Features of a MATIC Token?
Here are some key features of MATIC:
- Availability- Polygon sidechains offer transactions that are quick, inexpensive and safe. Moreover, transactions have finality in this network, similar to the Ethereum mainchain.
- Security- It offers a high level of security as Polygon operators are also associated with the PoS system.
- Customer experience- It offers WalletConnect support, SDK and native mobile applications from the mainchain to Polygon’s chain.
- Public sidechains- Compared to various other DApps chains, Polygon is capable of supporting many protocols and is also open to the public.
- High throughput- Internal testing has the potential to reach 7,000 TPS on a single sidechain. Moreover, horizontal scaling creates many sidechains.
How to Use the Polygon Token?
An important use of Polygon is that developers can use it to create DApps which are interoperable and can access numerous blockchains. By providing solutions for Ethereum’s lack of scalability and interoperability, Polygon makes itself indispensable for Ethereum users.
It is also important to remember that transaction fees will be less in the Polygon network as it uses Layer-2 solutions than Ethereum’s main network.
If you want to know how to buy Polygon crypto and use it, then you need to create a crypto wallet and link it to the Polygon network. Once you link the wallet and the network, you can deposit funds on Polygon’s blockchain.
What Is the Circulating Supply of Polygon?
Polygon’s developers release a certain number of Polygon tokens every month. According to CoinMarketCap the maximum supply is 10,000,000,000. It means around 8 billion, or 80% are in circulation. Furthermore, after its shift to mainnet in January, the network removed 650,000 Polygon MATIC coins from circulation.
Around 16% of tokens are team tokens, 4% are for advisors, and 12% are network tokens. 23.33% are tokens in the ecosystem, and the rest 21.86% are foundation tokens.
Price Prediction of Polygon Matic Token
According to CoinMarketCap, the latest price of the Polygon token is $0.4231. This data was taken on June 21 2022. Furthermore, this token has a market cap of $3,383,635,846, and its 24-hour volume is $526,013,295.
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Final Word
Polygon uses a PoS mechanism to scale the Ethereum blockchain and allows developers to build cryptocurrencies that are frictionless and accessible. However, it is as volatile as any other cryptocurrency in the market currently. So if you want to invest in Polygon(MATIC), you must stick to the golden rule of investing. You must not invest an amount you cannot afford to lose.
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FAQs
Ans: You can buy Polygon MATIC from various cryptocurrency exchanges like:
• ZebPay
• Binance
• Hotbit
• KuCoin
• BitYard
Ans: Polygon is volatile, just like any other market, but if you are a long-term investor, you might get good returns. However, if you are a short-term investor, you may risk losing more money.
Ans: Polygon might not go obsolete shortly as the transactional fee is less expensive than Ethereum’s. Additionally, it uses the same blockchain as Ethereum.
Ans: Some factors that led to Polygon’s price increase are:
• Addition of a new protocol
• A rise in the number of users
• Increase in the institutional investors in Polygon
Ans: Polygon was mentioned in 17,369 Twitter and Reddit posts on July 27 2022. Moreover, it ranked #11 on most mentioned activities from collective posts.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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