Polygon, also known as MATIC, is a blockchain platform that aims to improve upon some of Ethereum’s limitations by providing a faster and more cost-effective solution for transactions. It positions itself as “Ethereum’s internet of blockchains” and works by processing transactions on its own network before returning them to the main Ethereum blockchain. This reduces the load on the Ethereum network, allowing for faster transaction speeds and lower costs, which is less than a cent.
So, Polygon provides a convenient platform for new and existing blockchain projects to build on Ethereum without encountering scalability problems.
POLYGON: STRONG DEVELOPMENT TEAM: DRIVING FORCE
Polygon is considered as a highly promising Ethereum scalability project because of its strong development team. The team behind the project is the driving force behind its growth. The creators of the Matic network have demonstrated the ability to anticipate the needs of the current crypto industry.
Cofounder Jaynti Kanani is the current CEO of Polygon. He developed the project alongside Sandeep Nailwal, co-founder and chief operating officer, and Anurag Arjun, cofounder, and chief product officer. The trio created Polygon in 2017, then known as Matic Network.
The company initially had support from friends and family in Mumbai, but it has since attracted investors from all over the globe. Polygon raised over $450,000 in two rounds of startup funding in 2019 and has roughly $450 million in funding from various investors. Balaji Srinivasa, an angel investor, and Mark Cuban, the billionaire, are among the growing list of backers of Polygon.
UNDERSTANDING THE FUNCTIONALITY OF POLYGON
Polygon’s system is made up of four layers, these include the Ethereum layer, security layer, Polygon networks layer, and execution layer.
The Ethereum layer allows Polygon chains to use the secure Ethereum network for executing important components such as finality, staking, checkpoints, and interoperable messaging through smart contracts.
The security layer, which operates alongside the Ethereum layer, offers a “validators as a service” feature which provides an extra layer of security for the chains. The use of both the Ethereum and security layer is optional.
The mandatory Polygon networks layer, composed of individual networks, is responsible for block production, local consensus, and the collation of transactions.
The mandatory execution layer, powered by Polygon’s Ethereum Virtual Machine implementation, is used for executing smart contracts.
WHAT IS MATIC?
MATIC is the native cryptocurrency of Polygon. It is an ERC-20 token, which means it is created on the Ethereum blockchain. The token is used to govern and secure the Polygon network, and to pay for the network’s transaction fees. Unlike other cryptocurrencies with an unlimited supply, the supply of MATIC is limited with around $7.4 billion in circulation. The total number of coins will never exceed 10 billion.
The proof-of-stake consensus mechanism of Polygon rewards token holders for keeping the network running and verifying transactions. This mechanism relies on token holders staking their tokens, which means locking them up to be eligible for rewards. However, there is a risk involved, as token holders can lose a portion or all of their stake. To start staking, you only need 1 MATIC, but staking rewards can be earned by delegating your staking to a validator. Validators may take a small commission, typically between 1% and 10% of your staking rewards.
MATIC TRADING ON LEADING EXCHANGES
The MATIC token is a highly liquid cryptocurrency that is currently ranked among the top 100 largest cryptocurrencies by market capitalization. It is available for purchase and trading on a wide variety of cryptocurrency exchanges, including top-tier platforms such as Coinbase Pro, Binance, Huobi Global, and Poloniex, as well as the popular decentralized exchange Uniswap. Additionally, some exchanges also offer staking services, which allow you to earn interest on your MATIC while keeping your tokens on the exchange.
To purchase MATIC, you can use a fiat on-ramp, which is a payment processor that allows you to buy MATIC directly. However, some wallets may require you to first purchase another token, then pay a fee to swap it for MATIC. If you want to get MATIC on the Polygon Mainnet, you can use the official Polygon Bridge, which allows you to deposit and withdraw MATIC once you connect an eligible wallet. Some wallets, such as the Crypto.com DeFi Wallet app, also allow you to receive MATIC directly from the Polygon network.
THE BENEFITS AND RISKS OF INVESTING IN POLYGON
The prices of cryptocurrencies can be quite unstable and can change rapidly, even if the underlying project is doing well. This can be problematic for short-term investors who may be caught off guard. However, for those who are willing to take on more risk, a small investment in a speculative cryptocurrency like Polygon can lead to significant returns over the long term. Polygon has gained a lot of momentum recently, and it has formed partnerships with notable companies such as Disney and Reddit. Due to this, it is considered as one of the strongest alternative coins in the market and a smart addition to portfolios when the price is below $1.
CONCLUSION
The Polygon (MATIC) blockchain platform aims to enhance Ethereum’s capabilities by offering a more efficient and cost-effective solution for transactions. The project team is deemed as a highly promising solution for Ethereum scalability. Initially, the company had support from friends and family in Mumbai, but it has since attracted global investors. Polygon has established partnerships with well-known companies such as Disney and Reddit, which will aid in the adoption and usage of their network over time. Thus, investing in Polygon may be a smart choice for one’s portfolio.
