Polygon All You Need To Know

How was Polygon founded?

Formerly known as MATIC, the Indian origins Polygon is an Indian blockchain scalability platform referred to as ‘Ethereum’s Internet of Blockchains’. Its goal was to answer to some of the challenges still faced by Ethereum today – such as heavy fees, poor user experience and low transactions per second (TPS). And it aims to create a multi-chain ecosystem of ethereum compatible blockchains. 

As mentioned, originally, the project began as the MATIC Network. Later it was rebranded as Polygon when its scope expanded. It aims to provide distinct blockchains that can freely exchange value and information.

Jaynti Kanani, with Sandeep Nailwal, Mihailo Bjelic and Anurag Arjun founded Matic in 2017 while based in Mumbai. Kanani also collaborated with this team on a variety of other projects so they were more than comfortable with each others skill set and they first developed the vision for Polygon before swiftly moving in early 2018 to develop its complete ecosystem.

At the time, the aftermath of the bear market caused many savvy investors to look out for the next big thing within the crypto space and Polygon may have fitted the bill. Although Polygon seems to have fallen a little under their radar it ranks among the top 15 biggest cryptos globally (currently holding 13th place) and has cettainly become a massive hit in India. A surge in user requests and popularity has led cryptocurrency exchanges like CoinSwitch Kuber to list the currency on their platforms

Why is Polygon so popular?

Although it has already captured a place among the top 15 cryptocurrencies, its founders have ambitious plans to make it the third-largest crypto project following Bitcoin and Ethereum.

Polygon is certainly involved with some of the hottest areas of cryptocurrencies, such as DeFi (Decentralized Finance), DApp (Decentralized Application), DAO’s (Decentralized Autonomous Organizations) and NFT’s (Non-Fungible Tokens). 

We can think of Polygon as an express train. Although it’s on the same track as all other trains it moves faster and makes fewer stops along the way. In this analogy, the track is Ethereum, where Polygon does a quicker job of fulfilling transactions than the Ethereum blockchain itself. Polygon is also the name of the native cryptocurrency used on the Polygon network but the coins trade under the MATIC ticker.

The platform uses a proof-of-stake, or POS, consensus to secure the network and create new currency. How about their current figures? Well, Polygon has a market cap of $3.386 billion, and there are a little over 8 billion polygon coins currently in circulating supply.

And right now? At the time of writing, the price of this cryptocurrency is US$0.87 which represents a more than 25,000% increase over its lifetime to date and despite its peaks and troughs the coin has grown over 86% over the past month although when considering the last year it has seen a decline of a little over 13%.

There are several reasons behind the substantial rise of Polygon from inception to current day 2022 including growing seemingly structured hype around Polygon, the Google BigQuery announcement and of course the undisclosed amount invested by US tech billionaire Mark Cuban.

What was the Google BigQuery announcement? In May of 2021 Polygon announced that the Polygon Blockchain Datasets would be integrated into Google BigQuery, enabling the querying and analysis of on-chain data on Polygon in a simple, organized manner using Google Cloud.

The integration of Polygon data into Google’s BigQuery platform will enable developers, data analysts and crypto-enthusiasts to better understand the Polygon Blockchain and derive powerful insights from it. Polygon aims to serve as Ethereum’s Internet of Blockchains, bringing massive scale to Ethereum via the Polygon SDK, supporting stand-alone chains and secured chains. The availability of a fast and scalable data insights platform is critical to Polygon’s growth with Dapps, Enterprises and other Blockchain Solutions, and Google Cloud’s Public Datasets program does just that.

Growing investor interest around MATIC Polygon’s fantastic growth is also partly because of the surge in popularity of the Ethereum network since 2018 and the adoption of its blockchain. Faster and cheaper transactions facilitated by Polygon’s side chain architecture generate a much-anticipated hype in price and public perception. 

Last year on Feb 9th of 2021, MATIC announced its plans to rebrand itself as Polygon in a structured attempt to be recognized on a global scale. At that time, Polygon also upgraded the system by bringing in promising metaverse projects and integrated Matic Plasma Chain. This enabled it to provide a layer one blockchain network with integrated scaling solutions for NFT, DeFi etc. 

Amid increased congestion on the Ethereum Network and its rising costs, Polygon’s astonishingly low fees are gaining real traction. With an increased demand for scalability networks, Polygon could even onboard more projects with ease. 

The growing adoption of Polygon and other similar platforms can boost investors’ overall sentiment in the crypto market. According to LunarCrush, Polygon’s dominance on all the social media platforms has rose by around 636% during Q1 of 2022. This means that investors were taking a more extensive interest in the currency during the start of the year.

How does Polygon Matic work?

Polygon is a platform design to support infrastructure development and help Ethereum scale. Its core component is a modular, flexible framework (Polygon SDK) that allows developers to build and connect Layer-2 infrastructures like Plasma, Optimistic Rollups, zkRollups, Validium and standalone sidechains like the project’s flagship product, Matic POS (Proof-of-Stake). Since rebranding from Matic Network in February 2021 Polygon pivoted towards supporting multiple Layer-2 infrastructure. It will continue to support the Matic POS sidechain and Plasma-based payment system, which currently hosts over 90 applications.

Layer-2 scaling solutions or external networks can act as load balances for networks that have inherently difficulty to scale as user activity increases.

In 2017, Plasma was at the forefront of blockchain scaling, and Matic featured a plasma-driven scaling approach and Proof-of-Stake (PoS) sidechains to assist Ethereum as user demand for the network grew. Over time, Matic POS became a prominent scaling option for various applications.

In this way Polygon became a sort of Swiss Army knife for scaling solutions. Polygon plans to add support for rollups and Validium to its already-existing Plasma/POS chain. The project recognizes that Ethereum may not scale from a single solution in isolation. There’s a possibility that several solutions will co-exist and help scale Ethereum collectively, and Polygon aims to play a central role in supplying the infrastructure necessary to launch any of these systems.

Anyone who has ever traded on the Ethereum blockchain would be familiar with the high transaction fees and slow fulfilment times on the network. Polygon solves these problems by providing a decentralized platform that facilitates low-cost transactions.

The network describes itself as a layer two scaling solution. Its unique transaction fulfillment technology allows up to 65,000 transactions per second on each side chain. The system uses proof-of-stake checkpoints that could, in the future, allow millions of transactions on the blockchain. In addition, Polygon’s side chains have been designed to support decentralized finance protocols within the Ethereum ecosystem.

Currently, Polygon only supports Ethereum as the base chain but plans on extending its support to other base chains, according to community consensus and its suggestions.

Polygon Tokens in Circulation

Polygon developers release the tokens every month. The maximum supply of polygon tokens is 10,000,000,000, and 8 billion, or 80%, are currently in circulation, according to CoinMarketCap. Polygon has burned, or removed from circulation, 650,000 coins since a January upgrade on its mainnet.

What are Polygons tokenomics?

Sixteen percent of the tokens are team tokens; advisors hold 4%, 12% are network tokens and 23.33% are in the ecosystem. The remaining 21.86% are foundation tokens.

How Much Does Polygon Cost?

As of the start of August 2022, Polygon’s price is $0.87 (according to internationally recognized and trusted Coinbase).

Should I Invest In Polygon?

Since the Polygon platform has many uses, the polygon coin has become popular among investors. But if you are a beginner or do not know much about polygon tokens, it is important to be familiar with the project aims and current status before investing in it.

Framework for Blockchain Networks

In the future, Polygon wants to offer a framework for blockchain networks that would allow users to create interconnecting blockchain networks – hence the columned term as the ‘internet of blockchains’.

If this comes to pass, developers will have a beautiful freedom for network creation. They will be able to develop standalone, flexible and scalable blockchains.

Considering Polygon’s ambitious plans, it is quite likely that the currency will be on the rise in the future.

Ethereum Virtual Machine Compatibility

Many developers use the user-friendly Ethereum Virtual Machine to build decentralized apps.

With its EVM compatibility, Polygon makes it easier for developers to create decentralized apps and port them. Developers have deployed many Ethereum apps onto Polygon, including SushiSwap and Aave.

Polygon’s Price Increased 13,000% in 2021

Polygon experienced incredible gains in 2021, increasing 13,000%, from less than 2 cents to $2.68, between January and May of that year. After a brief stumble, Polygon rose again, hitting an all-time high of $2.8768 in December 2021. However, this higher price did not last for long. Polygon, like most popular cryptocurrencies, went into a freefall in late December 2021, and it appears to still be trending downward on the whole but given a smaller, more recent sample slice of time – as of June, polygon was trading for $0.4231 and is at $0.87 as we referred to earlier. This as an example of the market’s volatility and how much respect we need to show to that volatility when investing.

Is It a Safe Investment?

Regardless of the cryptocurrency you want to invest in, it is imperative to note that any of these currencies are volatile investments. You should be comfortable with a dramatic swing in price without going into panic mode running for the hills, complaining to grandma or negative rant blogging.

Where To Buy Polygon

There’s lots of choice when it comes to buying Polygon as it can be found and purchased from several cryptocurrency exchanges, including:

  • Binance
  • BiONE
  • UniSwap
  • WhiteBIT
  • ZebPay
  • Coinbase Pro
  • Huobi Global
  • Hotbit
  • KuCoin
  • Uphold
  • Gate.io
  • BitYard

The advantages of Polygon

As for polygon, some might consider it a safe investment while others do not. For instance, Mark Cuban, the cryptocurrency-enthusiast billionaire, invested in polygon.

Another positive sign is that Polygon is on a hiring spree amid a cryptocurrency bear market that has many companies, including Coinbase and BlockFi, laying off staff. A slew of high-profile partnerships could be part of the reason. The Draft Kings, Dolce & Gabbana, Macy’s, Adidas, Prada, Stripe, Adobe and Meta – in addition to the NFL – all have launched projects on Polygon. Wow! What testimony to the teams’ current efforts. Surely that has to inspire confidence across the board.

In total, more than 7,000 decentralized apps are running on Polygon. The sheer volume of dApps it supports should keep the platform relevant for a very long time to come.

The disadvantages of Polygon

The downside of Polygon is its attachment to Ethereum. The network is not only competing with other currencies but also with Ethereum itself, which it also depends on. Before you invest in polygon, it would be remiss not to determine if it could face any roadblocks in the future. The primary concern for the platform is the presence of other blockchain network projects, like Avalanche and Polkadot.

These projects may start coexisting in the coming years, leaving no room for Polygon to be hyped up. Moreover, Ethereum is making efforts to upgrade its platform. That upgrade – initially called Ethereum 2.0 and now referred to as The Merge – will result in a transition from the current proof-of-work chain to the new proof-of-stake chain. Once the merge is complete, it could lower Polygon’s popularity although it has to be said that it is extremely doubtful that the merge will result in such a significant impact to compete with what Polygon offers, the potential value it creates, the opportunities it will continue to develop for Ethereum as a network and the general investment sentiment toward the Polygon platform. 

Polygon developers would of course refute this siting their network will remain relevant even when Ethereum 2.0/The Merge comes to fruition because Polygon offers speedier transactions and still allows Ethereum’s communication with other networks.

Perhaps therefore they should hope that another programmable blockchain does not take Ethereum’s spot in the future, sending Polygon down with it. 

Is Polygon a Good Long-Term Investment?

Polygon is just as volatile as you would expect any other cryptocurrency to be. Its developers might have bigger plans for the future, but there is no way to ensure that other blockchain networks or Ethereum itself would not cause a decline in the coin’s popularity and worth. Besides that, the coin has been unable to sustain its brief rallies so far this year, which means the price might still be falling. There is a flip side to that coin however, reflecting on the yearly decrease of 13% but the lifetime increase of 25,000% could either tell us the bigger picture or the current trend.

If you want to invest in this, as any cryptocurrency/ project make sure you follow the staple and golden rule of investment by not putting in more than you can afford to lose.

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