The whole Ethereum blockchain is actually home to a wide range of financial activities – from games and NFT markets to the growing DeFi ecosystem. Plus, Ethereum is perfect for this activity since it is compatible with different smart contracts that can be used for building a huge collection of apps.
However, the increasing popularity of such apps adds several transactions to the whole Ethereum blockchain. As a result, the gas or transaction fees can, at times, reach a point where making frequent or small investments can turn out to be unviable economically.
Enter Polygon crypto, a sidechain or a layer 2 scaling solution that has come up to offer quicker transactions and lower expenses to users. It acts like a quick and parallel blockchain which runs beside the primary Ethereum blockchain.
For using it, you can easily ‘bridge’ a few of your cryptocurrencies over to Polygon. Then, you can engage with a vast collection of well-known crypto applications that are exclusive once to the primary Ethereum blockchain.
So, What Is Polygon? MATIC Explained
So, what is Polygon crypto?
Polygon can be defined as a protocol stack built to fix the scalability issues of Ethereum. The whole Polygon network deals with the challenges of the network by managing transactions on different blockchains compatible with Ethereum.
Then, Polygon returns the transactions to the primary Ethereum blockchain after processing. This particular approach decreases the load of the network on Ethereum. In getting this done, Polygon speeds up the transactions while cutting down on transaction fees to less than a single cent.
Simply put, Polygon, also known as the Matic network before, offers a fairly easy framework for existing and new blockchain projects to develop on Ethereum without any scalability concerns.
Additionally, when users use the Matic network, they can engage with a DApp (decentralized application) without facing any network congestion.
Who Is Actually Behind Polygon?
Due to its solid development team, Polygon has established itself firmly as an Ethereum scalability project with plenty of promise. The team’s expertise is the main driving force behind the growth of Polygon Crypto.
After all, the creators of the Matic network have the credit of actually foreseeing the requirements of the crypto industry today. But how does it serve our requirements today? In the next section, we will delve into the functioning of the Polygon network.
How Does Polygon Work?
So, how does Polygon work? Look at it like any express train on some subway – it basically travels on the same route as a regular train, but it makes relatively fewer stops, moving much more quickly. FYI, in this particular analogy, the primary Ethereum blockchain is the local train.
Coming back to Polygon crypto, it basically utilizes a range of different technologies to build this fast parallel blockchain before linking it to the primary Ethereum blockchain.
Moreover, to create a new MATIC for securing the network, Polygon depends on a PoS (proof-of-stake) consensus mechanism. This means that the only way you can earn money on the MATIC you actually hold is through staking.
Additionally, validators do lifting that is heavy. Simply put, they are responsible for verifying new transactions and then adding the same to the blockchain. In exchange, they will get a cut of fees and the newly developed MATIC. Now, to become a validator, you have to commit. After all, it’s a commitment that needs running a computer (or a full-time node) and staking your own independent MATIC.
In case you make a mistake or act maliciously in any way, then you can easily lose some of the MATIC you staked. And not just that, this can happen even if your connection to the internet is glitchy.
Moreover, delegators indirectly stake their MATIC through a trustworthy validator. Relatively speaking, this is a lesser-committed variant of staking. However, it still needs research. So, if a validator you choose makes mistakes or acts maliciously, you can lose all or some of the MATIC.
Using The Polygon Network?
You will love using the Polygon network. We love how the network allows users to do several things that they could originally do on the primary Ethereum network. In fact, you will have to pay only a fraction of the cent as compared to the fees you paid on the main Ethereum network.
Moreover, you can check out decentralized exchanges such as SushiSwap or QuikSwap. Yield-generating savings and lending protocols like NFT markets such as OpenSea and Aave, or even ‘no-loss-reward games such as Pooltogether.
For using the Polygon network, you will have to send a few cryptos to any compatible wallet such as the Coinbase Wallet. Then, you can ‘bridge’ some cryptos to the network – stablecoins are a pretty popular option in this step.
You will also have to bridge some MATIC to make transactions. But since the fees are relatively low, even the worth of a dollar is pretty high.
Near-instant transactions and low fees make the whole Polygon network a pretty great method to obtain some real-life experience while checking out DeFi protocols.
Don’t forget that decentralized finance is very volatile. So, it’s best to begin small and not invest more than you can lose, particularly if you are a beginner.
Is Polygon A Good Investment?
Ethereum is the largest and the first blockchain network globally that has smart contract functionality. Ether or ETH, Ethereum’s native currency, has a market cap of approximately 350 dollar billion, making it the second-largest crypto in the whole word by market capitalization.
Any project that can dependably enhance Ethereum is most likely to obtain massive adoption and support.
Crypto users think that Polygon is a good investment for multiple reasons. The project can evolve to become the primary layer 2 solution of option for Ethereum. Moreover, the Polygon crypto team is ambitious and strong, aggressively pursuing exceptional opportunities for partnership. The project provides solutions to issues that users of Ethereum have been arguing about for several years. Also, over time, Polygon has proven itself to be dependable.
With a market cap of around 11 billion dollars, MATIC has a spot among the top 25 cryptos. Additionally, the maximum supply is capped at ten billion MATIC. In this case, the circulating supply of tokens is approximately 7.5 billion of that ten billion.
Accompanied by such a finite supply, it is possible that demand for MATIC tokens might outstrip the whole supply, leading to an optimistic price action.