She is the rising star of the challenge who has experienced sudden and continuous growth in this beautiful year 2021.
Yes, Polygon has seen astronomical growth in its Total Gross Value Locked (TVL) from just around $150 at the start of the year to over billions of dollars today. The TVL is in fact a good indicator of the popularity of a channel and this is necessarily accompanied by an increase in the price as well.
No need to take your calculators, that's a nice increase of more than 6 figures. Oh yeah! The token has actually seen a huge increase this year, by around 13,000% from February to June 2021.
What the TVL shows us is that more and more users are actually using Polygon. It is not an indicator that shows us that the token is speculated by traders but used by holders of the token. Moreover, the latter quadrupled even if only during the month of June. Good news for the MATIC token.
Why is Polygon a hit?
Now, with all this, we come to the question of why Polygon is so successful?
To understand its success, you must first understand what it is about, at least in broad terms.
Presentation of the Polygone (Matic) team
To understand Polygon properly, don't see it as a competitor to Ethereum. It's precisely the opposite. It's an infrastructure created to improve the Ethereum network.
Originally, when it launched in 2017, Polygon was called “Matic Network” and it was co-founded by Indian entrepreneurs. The company is still based in India today with a team with strong expertise in software development, programming, banking and entrepreneurship. Some of them have become references in crypto like Jaynti Kanani, Sandeep Nailwal and Anurag Arjun who are the co-founders of Polygon. The team later expanded with Mihailo Bjelic.
If the company decided to rename itself "Polygon", it was to announce a big change, a renewal. And, in fact, there is a big difference between before and after, if only in terms of results. However, only the name of the network has changed, the token still bears the name MATIC.
Today, Polygon's market capitalization reaches $7 billion and it is ranked 19th on CoinMarketCap. Likewise, you can buy MATIC on most exchanges.
Understanding Polygon’s mission
You know, when you want to understand a project, always ask yourself why the team set up the project. What do they want to do with it? This is how we understand better. As for Polygon (MATIC), very clearly, the supreme objective has always been to resolve the problems that Ethereum is experiencing with scalability and especially fees. Besides, we will talk about it later, but the problem of Ethereum fees has given rise to many projects in parallel.
Without getting too technical, Polygon is a blockchain built on the Ethereum network that processes transactions quickly. It's a Layer 2 solution that runs on the Ethereum network to accelerate operations. Beyond trading, Polygon also significantly improves the operational efficiency of applications built on Ethereum.
You know that Ethereum is the second most important cryptocurrency. The Ethereum network allows you to create decentralized applications on the network. That said, a victim of its success, Ethereum has not been able to serve all the applications created. This has weighed down the network and made operations slow and expensive.
It is therefore to deal with the numerous problems of Ethereum that alternatives have appeared, including Polygon. Polygon sought to improve the scalability of the Ethereum network.
The particularity of Polygon: Internet of blockchain
In fact, Polygon is a layer 2 protocol aggregator. The idea is to host multiple technologies through the same platform.
Thus, Polygon supports several layer 2 solutions such as Optimistic Rollups, zkrollups and recently validitium. Via the implementation of Polygon SDK which is a modular infrastructure, projects can choose the solution that suits them best.
In this sense, Polygon brings together as many scalability solutions as possible, all to make Ethereum more liveable.
Also, and this is perhaps also the most important part of Polygon, is the fact that it makes Ethereum a multi-chain system (which is rightly called the "Internet of Blockchain"). This multi-chain system then offers us a dynamic ecosystem.
The technical specificity of Polygon
So, the takeaway from Polygon is that it takes a load off part of the main network, making it faster (and therefore less expensive).
For developers this is a godsend, because they can then create their own blockchains compatible with Ethereum.
This is made possible with the very architecture of Polygon which is composed of 4 layers:
- The execution layer which is then used to execute transactions.
- Polygon's networks layer is a system of autonomous blockchains that are brought together into a single ecosystem.
- The security layer is the required validator layer that is created for the security of the blockchain.
- The Ethereum layer is a smart contract layer used to ensure the interoperability of the blockchain and the staking process in particular.
The role of the MATIC token
Also note that the Polygon network relies on a Proof of Stake consensus mechanism . This is why you can stake the MATIC token. Becoming a validator requires a full node. It's more difficult, which is why becoming a delegate (holding tokens and transferring them to a validator to receive staking rewards) is more affordable. You can earn approximately 13% by using the site directly (without paying any commission to a third party).
Polygon's native token, MATIC, is an ERC-20 token that is also used as a payment method for transaction fees. MATIC tokens are issued according to a specific schedule, and all tokens must be issued by December 2022.
What will happen after Ethereum 2.0 is implemented?
At first glance, the first fear we may have concerns the strong (too strong) link between Polygon and Ethereum. The market is competitive and moving quickly. The fate of Polygon is linked to the future of Ethereum.
If a new generation of blockchain overtakes older ones, Ethereum and related projects could lose their luster, for example.
However, this would be a very unlikely scenario because Ethereum has a crazy head start which can be strengthened with its update.
We can also think that Polygon would become useless once Eth2 is implemented... This is the ultimate fear that we can have but which has been widely raised by investors.
Similarly, Polygon developers have stated that their solution will still be valid for ETH2. This would still allow for faster transactions and enable Ethereum to communicate with other networks.
Indeed, even though Polygon develops several solutions, it remains focused on the Ethereum network. And, if, for example, a blockchain like Cardano takes off and overtakes Ethereum , things will ultimately be more complicated for Polygon…
Of course, this is a risk inherent to every cryptocurrency. The competition is fierce for Polygon because, after all, there are projects like Cosmos and Polkadot (the closest in practice to Polygon) that are also vying for attention and proving very successful.
See the Polygon video version on YouTube:
Final Word on Crypto Polygon
Still, Polygon is working on its future, it has established more than 500 partnerships with the most well-known DeFi projects.
Similarly, Polygon is also developing a division dedicated to video games and Play-to-Earn games in particular. This gives it a very sensible future perspective, given the market trend.
Today, it has become a key player in DeFi. For Ethereum users, it has even become an essential tool, significantly reducing transaction fees. It's now possible to continue using Ethereum DApps while also using Polygon. That's fantastic, it has to be said, and that's why it's being talked about as Ethereum's ultimate savior.
One might also wonder what will happen to Layer 2 when Ethereum 2 is implemented…
It's not a name he stole indeed.
- To go further, you can read the tutorial to find out how to add the Matic/Polygon network to Metamask.
- Buy Matic on Binance (with a 10% discount)
- Discover Polygon Technology.
- Watch the tutorial video on Polygon on Youtube.
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Disclaimer: This content is for informational purposes and does not constitute financial advice. We strongly advise our readers to conduct their own independent research before committing to any investment.
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