Quick Facts

Approximate Market Cap$11,874,456,125
Year Established2017
FounderJaynti Kanani, Sandeep Nailwal, Anurag Arjun
Symbol/AbbreviationMATIC
UtilityUtility Token

One of cryptocurrency’s goals is to build a free and open financial system. This is precisely what the market of dApps that exist on Ethereum offers.

Unfortunately, there has been a significant issue with network costs. Many consumers found Ethereum’s gas prices to be too expensive.

Fortunately, Polygon, a cryptocurrency, supports some of Ethereum’s most popular DeFi dApps. Polygon also uses Ethereum’s Blockchain for security. Most significantly, Polygon enables any user to store, transfer, and use Ethereum tokens at a low cost.

What is Polygon – Definition

Polygon is a scalable system that seeks to give a variety of tools to enhance speed, lower the cost, and simplify activities on blockchain networks.

MATIC is the digital currency that powers the system. MATIC is utilized as a payment and settlement unit amongst network users.

The primary chain of Polygon is a PoS sidechain wherein multiple users may stake MATIC coins to verify operations and vote on network enhancements.

Polygon stakeholders work in the same way as Ethereum PoW miners do. Stakeholders must lock the MATIC coins in order to authorize and validate trades on the MATIC Sidechain. They may also pick qualified block producers by using their locked coins as voting power in order to manage the sidechain’s block generation process.

Polygon is made up of four levels, each of which serves a distinct purpose:

  • Ethereum’s layer
  • The Layer of Security
  • The Layer of Mandatory Polygon Networks
  • The Required Execution Layer

Pros and Cons

Pros

  • Secure
  • Cost-effective
  • Fast transactions

Cons

  • Increased competition
  • Cannot be mined
  • May become redundant

The History

Polygon was created in 2017 by a group of outstanding Ethereum experts who were involved in the development of several of Ethereum’s scaling solutions.

Matic Network was the initial name for Polygon. It changed its name to Polygon to reflect the project’s evolution from a single layer-2 chain to a toolset of scaling solutions for Ethereum. Polygon kept its MATIC cryptocurrency after the rebranding.

MATIC has made significant progress with initiatives such as Maker (MKR), Decentraland, and  (MANA). It also began collaborating with platforms such as Binance and Coinbase, which provided adequate funding to the MATIC team to expand its operations.

They then carried out Plasma, a method that they used in part following their renaming in February 2021. AAVE was then deployed on Polygon’s platform in April 2021. It increased the relevance of the Polygon ecosystem.

How Polygon Works

Ethereum, a platform that hosts a variety of decentralized apps, lies at the heart of Polygon’s concept. But, the amount of activity on Ethereum’s blockchain has made it nearly useless, since operational costs are growing and traffic is being congested.

The rapid popularity of Ethereum has resulted in excessive costs, with exchange fees frequently exceeding more than the transacted value. To fix the difficulties, Polygon MATIC is utilized. The Polygon system has many participants, including block makers, programmers, customers, and stakeholders. Polygon users use the MATIC Sidechain to run and collaborate with various Ethereum-based decentralized apps.

Off-chain methods are alluded to in Layer-2 scaling solutions. This involves reducing or removing components having evaluation capability from the primary Blockchain before they are executed on sidechains. This increases main chain performance. It also disperses the assessing proficiency throughout the network. Layer-2 solutions are critical to the widespread acceptance of cryptographic money.

Advantages & Disadvantages

Advantages

Minimal transaction costs

Significantly faster capabilities are available at a cheaper cost than on Ethereum. As a result, it is an appealing network for DeFi apps.

Fast transactions

Block verification occurs every 2 seconds, implying that transactions on the Polygon network may be completed incredibly rapidly.

Excellent for DeFi applications

Collaboration with a variety of different blockchain projects drew in development teams wanting both to build new dApps on Polygon or transfer their existing ones.

Disadvantages

High Market Cap/Total value locked ratio

The Market Cap to Total Value Locked ratio is currently high. This indicates that the asset’s worth exceeds the value of the assets locked into the system.

Competitors scaling options 

Polygon’s major drawback would be increased competition from other scaling alternatives, either for Ethereum as well as other blockchains.

Polygon in the Global Crypto Market

MATIC tokens, like all other cryptocurrencies, have a finite quantity. There can only be 10 billion MATIC tokens in circulation, according to the platform’s regulations.

MATIC coin is available on the majority of well-known distributed as well as centralized trading platforms. The crypto community is banding together to make purchasing MATIC tokens easier by accepting both cash and crypto.

FAQ

Can MATIC scale?

Yes, Polygon (MATIC) has the conceptual capability of scaling to millions of transactions per second.

Is MATIC a PoS system?

Polygon (MATIC) is, indeed, based on the consensus algorithm for PoS.

What is the MATIC coin’s purpose?

MATIC is used to assist accelerate network development. It may be staked and used to pay transaction fees.