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Is Polygon (MATIC) here to stay? • Benzinga Crypto


Have you decided that Polygon is a good investment? You can get MATIC on Coinbase today.

As the popularity of cryptocurrency increases, many large blockchains are struggling to handle the increase in capacity. Thus, transaction fees have increased significantly, especially on the Ethereum chain. For example, transaction fees on Ethereum were just pennies in its early days. However, transaction fees could reach thousands of dollars at their peak. This is where Polygon comes in. Polygon aims to create a layer 2 solution for Ethereum to reduce the load on the Ethereum mainnet and therefore reduce transaction fees.

Is Polygon (MATIC) here to stay or just a fad?

As a sidechain of Ethereum and soon to be a Layer 2 solution, Polygon enables Ethereum-based transactions to occur outside of the main Ethereum chain. This practice reduces transaction fees. Moreover, it allows users to create their own chains and currencies and add them to the global Ethereum network.

The project token, MATIC, is used for both governance and utility. For governance, it allows unitholders to vote on new projects and initiatives. For utility, it is used for both transaction fees and transaction verification. Unlike Ethereum, which uses a proof-of-work (PoW) system, Polygon uses a proof-of-stake (PoS) system to verify its transactions.

MATIC is currently trading for around $1.00 and has a market capitalization of over $8 billion. About 78% of the total supply is currently in circulation.

Polygon history (MATIC)

Polygon was founded in October 2017 by a team that had experience developing on the Ethereum blockchain. They saw possible network capacity issues and decided that Polygon would be a great opportunity to help Ethereum scale.

For the first two years after launch, Polygon saw minimal growth. However, several major projects have started using its network, such as AAVE, MetaMask, and CurveDAO. These projects brought both use cases and trading volume to the project, driving the coin higher. The token went from less than $0.01 to almost $2.50 in a matter of months. However, it has since fallen back to its current price of around $1.00.

Advantages and disadvantages of the polygon (MATIC)

Polygon has a variety of pros and cons. For the pros, it has real use cases and an experienced team. On the other hand, it is heavily dependent on Ethereum and may struggle to compare to its competitors.

Polygon is one of a small group of crypto projects that provide real-world use cases. It supports lower transaction fees for everyone and encourages decentralized finance (DeFi) activity. Moreover, it has one of the most experienced teams backed by software engineers, blockchain developers, and business consultants. This experience can allow them to shine in areas that their competitors cannot.

In terms of cons, Polygon is deeply connected to the Ethereum network. As such, if Ethereum starts to struggle, so will Polygon. Additionally, ETH 2.0 is supposed to reduce pressure on the network and enable lower transaction fees; however, that transformation likely won’t happen for years. Ethereum plans to merge to PoS this year, but it is a common misconception that this change will immediately reduce transaction fees.

If Ethereum can scale, then Polygon won’t be needed as much as it is now. Additionally, Polygon can only connect applications that are compatible with Ethereum. Other projects are able to connect multiple strings and may provide more use cases.

Polygon Competition (MATIC)

While there are many major Polygon competitors, Polkadot is currently the biggest. Other competitors include Cosmos, Kusama, and Arbitrum. Polygon primarily seeks to improve the Ethereum network by connecting it to other Ethereum-enabled blockchains and helping scale the Ethereum network. Polkadot seeks to create a network of many blockchains, not just Ethereum-enabled chains.

Polygon hopes to expand the Ethereum network by creating a multi-chain system. It allows almost anyone to create new protocols on the Ethereum chain. Polygon can take advantage of the security and decentralization of the Ethereum network when moving from a sidechain to a layer 2.

Polkadot is a network that seeks to connect many smaller blockchains. It differs from Polygon in that it is a layer 1 solution, which means it uses its own blockchain separate from Ethereum. Polkadot currently supports 100 parachains or parallel blockchains. The project hopes to help blockchains communicate with each other by connecting them.

Polkadot is currently trading around $15 with a market cap of over $14 billion.

How to make money with Polygon (MATIC)

Exam in 1 minute

Maybe you think cryptocurrency is the future, or maybe you were swept away by the early waves of Bitcoin. BlockFi can be your next step if you are ready to grow as a crypto investor.

Whether you are a native crypto user or curious enough to start investing, BlockFi seeks to bring institutional-grade financial products to crypto markets that often face restricted access. It strives to bring customers simple and inexpensive applications designed to maximize the potential of crypto assets. Read more in our BlockFi review.

Best for

  • Native Crypto Clients
  • Curious crypto customers
Advantages

  • Mainly free platform
  • Best interest rates on the market
  • Earn interest, trade, and borrow from a centralized hub using the BlockFi app
The inconvenients

  • Mainly reserved for those with a basic knowledge of cryptocurrency
  • No dedicated relationship with an investment adviser, so better for those with a solid grasp of crypto trading

As with any investment, the easiest way to make a profit is to buy low and sell high. However, it can be extremely difficult to time your trades in a way that allows you to do so consistently. Fortunately, there are several ways to earn MATIC through DeFi technology.

First, you can earn interest on your MATIC position through trades. You can earn over 10% APY on your MATIC position by staking it with sites like Crypto.com and BlockFi.

Another way to earn passive income on your MATIC position is to stake it. This can be done through the Polygon website and can generate regular returns.

How to buy a polygon (MATIC)

Exam in 1 minute

Gemini is a cryptocurrency exchange and custodian that offers investors access to over 100 coins and tokens. Founded in the United States, Gemini is expanding globally, particularly in Europe and Asia. The offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.

Gemini is one of the only brokers that offers multiple platform options depending on skill level. New investors will love Gemini’s streamlined mobile and web app interface, while advanced investors might appreciate all the tools that ActiveTrader comes with.

In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.

Best for

  • New investors looking for a simple mobile and web app
  • Day traders looking to use technical analysis tools
  • Users looking for a one-stop-shop to buy, sell, and store all their cryptos
Advantages

  • Easy and fast registrations – can start in as little as 5 minutes
  • Multitude of platforms to accommodate traders of all levels
  • Hot wallets include insurance to protect against theft and hacking attempts
The inconvenients

  • Charges both commission and convenience fees for users who buy and sell through the desktop or mobile app

Since Polygon is a relatively large project, it can be purchased on a variety of major exchanges, such as Coinbase Global Inc. (NASDAQ: COIN), FTX, Gemini and Crypto.com. These exchanges are known for their ease of use, low fees, and overall security.

To open an account, all you need to do is register with an email and password. You will then need to provide some basic personal information to verify your account. Then you can connect your bank account and start trading.

So, is Polygon (MATIC) here to stay?

As Polygon depends almost exclusively on the Ethereum chain, the success of ETH will almost certainly correlate with that of MATIC. Additionally, Polygon performs well when the Ethereum network is under high transaction volume. If ETH 2.0 can solve the problem of excessive transaction demand, Polygon might suffer. Conversely, if ETH 2.0 cannot handle the pressure of trading volume, Polygon could prove extremely useful.


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Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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