- A well-planned Blockchain which is made to implement interoperability of Blockchain systems.
- It has lower transaction fees and speedy transaction timing.
- Polygon has tied up with some technology majors and won backing of Mark Cuban.
- MATIC coin value has grown tremendously in recent times.
- The value growth of its token may not last forever.
- It faces competition from upcoming Ethereum 2.0 and rivals like Polkadot.
The growth and evolution of the cryptocurrency sector have made even the sector veterans amazed and the lack of govt regulations has not been able to hinder its growth. The Indian govt is yet to come up with a clearly defined policy for enabling crypto transactions. But the truth is thousands of Indians are already buying crypto coins and several crypto exchanges have come up. In fact, you can also buy Cryptocurrencies of Indian origin without hassles. One such example is Polygon, also known as MATIC.
The basics of Polygon (Matic)
Polygon is among the newer generation Cryptocurrencies that have been designed to overcome the innate limitations of their earlier generation counterparts. Polygon is a one of its kind Blockchain scalability platform and it aims to resolve the major problems Ethereum users cope with. It is meant to develop a multi-chain ecosystem of blockchains that are compatible with Ethereum.
India-based cryptocurrency MATIC which was renamed polygon was made to speed up transactions done on the Ethereum Blockchain. It also aims to reduce the cost of Ethereum blockchain transactions. Long-time Ethereum users grudge how the transactions take longer to be completed compared to the past and they are also not happy about the rising transaction charges on the network.
The potential of Polygon has not gone unnoticed and in terms of market cap, it is rated among the top 20 cryptocurrencies.
The origin of Polygon
Polygon was developed by four software engineers- Mihailo Bjelic, Anurag Arjun, Jayanti Kanani, Sandeep Narwal. The Mumbai-based start-up has grown from strength to strength. However, the founders have loftier plans for the project.
The salient features of polygon
Owing to the following features Polygon has become one of the sought after cryptocurrencies within a short time of launch:
- Polygon has a unique technology called sidechain. This lets it connect to a Blockchain network. As a result, the transactions are wrapped faster and fees are also lower. While Polygon has been designed to work with the Ethereum Blockchain but it can support other blockchain technologies thanks to the sidechain feature.
- Polygon has been made with some ambitious plans. With it, crypto users will be able to create blockchain networks with easy interoperability. This can also be quite helpful for the developers too.
- Polygon supports the Ethereum Virtual Machine which is a software platform used by developers for creating carious decentralized apps. Since Polygon works with the EVM, developers can port apps without woes.
- Every cryptocurrency project usually has its token and Polygon has one native token too. The polygon token is a non-mineable token and it is used for paying transaction fees, governance and Staking. You may choose to stake or lend your tokens and the network uses them. You earn interest over the time. The annual rate varies from time to time.
When you want to buy any cryptocurrency its availability has to be checked. Polygon is already available on popular crypto exchanges. Like many other cryptocurrencies, Polygon has witnessed a rise and fall in its value in recent times.
Why crypto sector veterans are betting on it?
It is not without reason that the veterans in the cryptocurrency sector are backing the polygon project.
- The increased congestion faced by the users on the Ethereum Network and growing charges have made many of them switch to Polygon network. Its speed and reduced transaction fees have acted as magnets.
- Polygon is going to tie up with some large organizations and technology majors and the buzz is active in the social media circles. For example, it is set to collaborate with Infosys Ltd. It also made headlines owing to its collaborative approach – The Trace Network.
- Polygon has integrated its assets into BigQuery powered by Google Cloud. So, the BigQuery users can execute queries on Polygon.
- Polygon has got the backing of Mark Cuban- a billionaire investor. He has already invested in the project. Cuban has praised Polygon network for ease of usage and versatility. His support and investment has acted as a catalyst for growth of the network.
The functioning of Polygon-explained
At the core of polygon is the Polygon SDK- a powerful and flexible modular framework. It is useful for developing decentralized applications. The platform is powered by a scalable consensus algorithm.
Polygon architecture is made up of 4 layers and each has a specific usage.
- Ethereum layer- It is used for handling staking, transactions and interoperability between various Polygon chains.
- Security layer- It offers an extra layer of security and runs alongside Ethereum.
- Polygon networks layer- It works as an ecosystem of Blockchain networks.
- Execution layer- The execution layer is what the EVM is all about.
Polygon chains are capable of communicating with the Ethereum chain and between themselves.
So, what’s the catch?
On the surface, it may look like Polygon has everything in its stride. However, on finer analysis the hurdles on their way become prominent.
There are other candidates for deploying Blockchain interoperability solutions. Polkadot and Cardano are among the major rivals and both are growing fast. Another big threat to it is the upcoming Ethereum 2.0 which is said to be powerful enough to overcome existing hurdles of the Ethereum network.
In 2021, the price surge of MATIC has made investors upbeat. Its price surged at a time when the price of lone-time players like Ethereum and Bitcoin plunged downwards. However, the token is not exactly immune to the volatility of the crypto sector. So, its bullish upward run may not last for long.
Should you invest in MATIC?
The massive price surge of MATIC has made a lot of crypto sector investors upbeat about its future prospects. It is true that the token value surged ahead in 2021 and predictions hint at a bullish growth in the future. However, the crypto sector is quite volatile and you never know when its value may plummet, driven by factors that are not visible now. So, investing in the token in moderation is advisable. If you already use the Ethereum ecosystem a lot, investing in Polygon makes absolute sense.