Wednesday, October 5, 2022

What is Polygon (MATIC) Network?

In the face of increased congestion on the Ethereum Network and escalating transaction costs, Polygon Network’s incredibly cheap fees are making it gain popularity among users. Alongside its token, $MATIC, Polygon has enhanced functionalities and may be able to take on more projects as a result of the rising demand for scalability networks.

As the price of Ethereum continues to climb dramatically with Decentralized Finance (DeFi) introduction, so also has demand been surging. To meet up with worldwide demand for decentralized services, Ethereum’s throughput must be increased. This will avoid it from being surpassed by other faster and more scalable blockchains.

Three high-performance blockchains – BNB Chain, Polkadot, and Solana top the list of protocols vying for Ethereum’s rank as the leading smart contract platform.

Polygon’s Emergence

The Matic Network started out as a Layer 2 scaling solution but has now expanded into a self-sustaining, collaborative, and participative Ethereum blockchain ecosystem. As the project grew, it changed its name from Matic Network to Polygon on February 9, 2021.

With its origin in India, Jayanti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic were the four software engineers who worked together to create it.

However, despite the fact that the Polygon (MATIC) Network has already established itself as one of the top 15 cryptocurrencies, its founders have grandiose goals to make it the third-largest cryptocurrency project in the world, behind Bitcoin and Ethereum.

$MATIC Token in the Polygon Ecosystem?

The MATIC token is an ERC-20 token that serves as the fuel for the entire Polygon Network. There are several uses for it, including paying for gas fees, staking, and governance. According to CoinMarketCap, there are currently about 8 billion MATIC tokens in circulation, with a maximum supply of 10 billion tokens.

Providing computing resources and services to the Polygon network is a way for users to earn MATIC tokens. This is accomplished by validating transactions or executing smart contracts on the Polygon network.

Aside from voting on network enhancements, MATIC owners and stakers receive access to a voting system that is proportional to the amount of MATIC cryptocurrency they own.

After being rebranded as Polygon and introducing new features for developers and users in the ecosystem, the MATIC token experienced an accelerated rise in value. This is a result of the increased number of applications for which it is being used today.

Two years after Polygon’s founding, the MATIC token was launched as an initial exchange offering (IEO) on the Binance cryptocurrency trading platform. Here it gained its widespread adoption riding on the exchange’s broad-based community. The token’s price has varied between $0.03 and $2.92 since its creation in 2019 and has done so for the past two years.

Since then, the token has had a downward trend, with its price falling by about half from its all-time high of $2.92 to its current price of $0.4793, a bearish trend fueled by the current market downfall.

How it works

Polygon Network operates in a manner similar to other Proof of Stake (PoS) protocols in terms of network nodes, governance, and staking among other characteristics.

It is opposed to the traditional Proof of Work (PoW) consensus which requires an enormous amount of processing power to generate new blocks.

In contrast, the Polygon network relies on a group of node validators to verify and validate transaction blocks on the network. Its Proof-of-Stake (PoS) ecosystem operates by rewarding users with MATIC, the protocol’s native currency.

Polygon’s scaling solutions and uniqueness: the big picture

Ultimately, Polygon refers to itself as ​“Ethereum’s Internet of Blockchains,” thus it is not in competition with Ethereum.

If anything, they can be said to be co-dependent. The only negative is that people who intend to use Ethereum are now switching to Polygon. But that aside, Polygon improves Ethereum, which means more people will utilize the Ethereum blockchain, which increases the value.

The Polygon Protocol has continued to impress developers with scalability and rapid blockchain transactions which are some of the protocol’s major objectives. Its sidechains are commercially available and are designed to support a wide range of Ethereum-based decentralized finance (DeFi) protocols, among other things.

Here are a few advantages of Polygon against other cryptocurrencies

  • The Ethereum Virtual Machine (EVM), built on Ethereum’s blockchain, enables developers to create decentralized apps. This makes Polygon the first scaling solution that supports the EVM in its entirety.

  • The Ethereum community is already utilizing Solidity, a programming language for constructing object-oriented smart contracts. Consequently, dApps created on the Polygon network will benefit from Ethereum’s network effect while maintaining their superior security.

  • The security method of Polygon is optional, allowing blockchains to preserve their autonomy. This is a distinctive quality. Thus, connected blockchains can completely integrate with Ethereum’s main chain without using Polygon’s approach to security as a service.

However, there is a chance that with developments in Ethereum 2.0, Polygon will no longer be required as the second layer of Ethereum, which seems to be its only drawback.

Polygon wallet?

This is a blockchain wallet used to store and manage MATIC, the network’s native cryptocurrency. Some Polygon wallets support staking, lending, and trading, among other functions.

The system generates a unique wallet address that can be communicated between two MATIC users, to a third party or converted into a QR. As noted above, some Polygon wallets allow users to purchase and sell MATIC, as well as utilize blockchain-based financial services such as loans and interest accounts.

Some examples of these wallets include AlphaWallet, Coinbase Wallet, Metamask etc.

Future value of the Polygon Network and its token

It is difficult to predict the future of a layer-2 project as unique as Polygon. Still, it envisions a genuinely decentralized future devoid of digital borders. One that allows individuals to freely exchange value on a global scale without the need for intermediaries or friction.

Similarly to any other cryptocurrency, Polygon is subject to the same degree of volatility. However, earlier this year, Polygon announced its “Green Manifesto,” which included a $20 million commitment to combat climate change. The company also stated that it would become carbon negative by 2022.

The Bitcoin blockchain has been roundly attacked by climate change activist groups such as Greenpeace due to its excessive electricity use. With this, Polygon has the potential not only to make a beneficial contribution to the fight against climate change but also to draw the attention of environmentally conscious investors, strengthening the case for a positive Polygon MATIC price forecast.

Ayo Alabi
Ayo Alabi is an experienced writer and Fintech enthusiast, passionate about educating people and helping businesses that want to see their Google search rankings surge. Her articles have appeared in a number of e-zine sites, with focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.

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