The Polygon cryptocurrency project was one of the first public offerings (IEO) on the Binance Launchpad platform. The token of this network entered the market in April 2019. And the leap in popularity of the Polygon occurred in 2021.
Features
IEO of Polygon tokens (called MATIC) was held in the form of a lottery. Thousands of users took part. Tokens were received by 16.7 thousand people.
Polygon's Layer 2 mainnet launched in May 2020. The second level should be understood to be an additional layer to the Ethereum blockchain. Such a network is a more flexible version of the already familiar system. These networks are called sidechains.
The key goal of the Polygon project is to increase the scalability of the Ethereum blockchain. The company launched the first Ethereum scaling platform which turned out to be well structured and fully operational.
The main component of Polygon is the flexible modular Polygon SDK framework. It supports the creation and operation of various types of decentralized applications.
The Polygon network has 3 main advantages:
- It is faster than Ethereum. It takes significantly less time to complete transactions. Transactions are validated using the proof-of-stake (PoS) principle.
- Fewer commissions.
- Developers can create or transfer different types of chains to Polygon - autonomous, collapsible, etc.
There is another important task for the sake of which the Polygon sidechain was created: maintaining a high degree of decentralization.
The network was designed in such a way that it can be used to scale any blockchain. In addition, the project developers have created all the conditions to support various projects based on Ethereum. One example is Optimism or StarkWare.
The project management strives to attract specialists to the team who are able to ensure the development of decentralized applications based on Ethereum.
The main tasks under this objective:
- To improve the application interface;
- To increase the scalability of the other projects.
That is, the Polygon team is constantly working on the development of the platform.
According to the creators of Polygon, the Ethereum blockchain in its current form is not able to provide the necessary speed for the development of decentralized applications. This is because its structure is too bulky and slow. Polygon was developed to solve this problem.
The price of a MATIC token is currently $1.3. The market capitalization of the project is $8.5 billion. There are 6.7 billion cryptocurrency units in circulation.
Why Polygon will grow
The developers of Polygon have managed to create a fork of the Ethereum blockchain that eliminates its drawbacks while retaining its advantages. Decentralization has remained, commissions have decreased, and the speed of transactions has increased. Moreover, this sidechain is capable of processing up to one million operations per second.
For these reasons, many users see Polygon as a viable alternative to Ethereum. The growing loyalty towards the project is confirmed by the statistics. In just 2 years, the cost of Polygon has increased by more than 500 times.
Most of the growth came after users took advantage of this sidechain. In January 2021 MATIC was valued at $0.02. In May, there was a peak in the growth of quotes - the price reached $2.45 per unit of the cryptocurrency.
The rapid influx of users is also driven by the fact that Polygon is an Ethereum-compatible network. This means that a large number of existing projects based on Ethereum can integrate Polygon into their structure. The transition to a new network is quick and painless. It is this working scheme and the background of tangible benefits that give the Polygon project tangible growth potential.
There are other sidechains in the crypto market that aim to solve Ethereum's scalability problem. One example is Arbitrum and a project by StarkNet. This means that the Polygon team has to maintain current performance and grow in a highly competitive environment. But the project management and development team are aware of this.
Polygon was originally created as a network with the ability to integrate with existing DeFi projects based on Ethereum. This feature sets it apart from many other sidechains.
The decentralized financial instruments and applications segment is developing rapidly. There is a lot of money involved in this sector, so working with a large number of DeFi projects means a steady upward trend.
There are already many different decentralized applications and services that Polygon is integrated with:
- Decentraland: a virtual world.
- Aavegotchi: a project working at the intersection of NFT and finance.
- Neon District: a gaming application.
- SportX: a gambling application.
- Polymarket: a prediction market.
- Artvatars: digitization of artwork.
- F1 Delta Time: a blockchain game on Ethereum.
- Somnium Space: the world of virtual reality.
These are not all the projects that use Polygon. For example, Aave, a decentralized landing protocol, works on this sidechain. This collaboration allowed to attract more than 3.5 trillion dollars of liquidity in the DeFi segment.
This example inspired other projects that also achieved good results by basing their projects on Polygon:
- Quickswap: $1.06 billion locked on this exchange
- Sushiswap: blocked $950 million in the decentralized finance segment.
- Curve: blocked $850 million.
Exchanges and applications working on the basis of Polygon experienced a leap in performance. This is because such low fees were not previously available to users in the DeFi segment.
Transferring assets between different protocols can now be done quickly and cheaply. These conditions enabled a large number of users who were not active before to engage in arbitrage and scalping between different protocols.
The creators of Polygon have managed to create a successful Ethereum clone with higher transaction speeds and lower fees. This sidechain has been appreciated by many services and new projects are constantly being added that choose Polygon.
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