Ethereum has a scalability issue, as we all are aware that the gas fees can get very expensive, attaining hundreds of dollars once the network is overrun with transactions. Here is when Polygon comes in, enabling users to access Ethereum DApps with the need to deal with slow speeds and high gas fees. This article will give you an insight into Polygon cryptocurrency and is it a good investment or not.
What Is Polygon Cryptocurrency?
Polygon cryptocurrency (MATIC) is a Layer 2 scaling result for Ethereum. It also operates as a platform for connecting and creating Ethereum compatible blockchains applications.
Polygon began to roll out in 2019 as “Matic Network,” with its primary aim being to scale ETH. In 2021 the treaty was changed to “Polygon,” and its aim expanded to insert connecting and building Ethereum compatible blockchains.
Polygon decreases the fees of transactions on the Ethereum network while also raising the speed of transactions to a great extent. The protocol allows instant transactions which cost nearly a fraction of a penny ($0.002).
The scalability of Polygon cryptocurrency aims at what makes it very attractive for decentralized apps that operate on the Ethereum blockchain. Uniswap, for instance, declared that they had dispensed Uniswap V3 on Polygon on December 22nd, 2021.
How Does Polygon Operate?
Polygon (MATIC crypto) avails a variety of technologies to formulate a highly scalable and fast Layer 2 blockchain network:
- Proof-of-Stake System – Users endorse into transactions by staking their MATIC. Users can operate a complete node as a “validator” or they can represent their MATIC to a trusted validator.
- Polygon Protocol – The protocol which allows Ethereum and Polygon based blockchains to communicate with each other while acquiring the security of Ethereum.
- Commit Chains – Transaction networks that operate alongside the Ethereum blockchain, clustering transactions together before verifying them and returning the data back to the primary chain.
- Polygon Framework – One-click system for using Ethereum compatible blockchains by using the Polygon SDK.
The cryptocurrency MATIC of Polygon is used for the following reasons:
- Fees – MATIC is availed for transaction fees and is also paid out as staking rewards to validators.
- Staking – Users can stake MATIC to endorse transactions or represent MATIC to validators.
- Ecosystem Staking – Polygon plans to allow staking for projects in the Polygon ecosystem in the upcoming times.
Popularity Of Polygon Cryptocurrency In Decentralized Finance (DeFi)
Defi has evolved as a famous utility for the Polygon network because of its instant finality and very low fees. This can lead to a lot of adoption to Polygon cryptocurrency, as per the report, Defi is now an industry that is worth more than $100 Billion.
Combine this with the speed, ease of use, and affordability of Polygon, and you have a powerful market leader in the creation. To use Defi apps on Polygon, users are required to bridge their Ethereum assets to the Polygon protocol.
Famous DeFi apps on the Polygon network are:
- QuickSwap – Famous DEX on Polygon
- Aave – Channel to borrow, lend, and earn interest on assets
- Curve Finance – Stablecoin trading and Liquidity Pools.
- Adamant Finance – auto-compounder and yield farming optimizer
- AutoFarm – auto-compounder and yield farming optimizer
- Beefy Finance – auto-compounder and yield farming optimizer
- 1inch – DEX with a Liquidity Pools to earn interest
- SushiSwap – DEX with Liquidity Pools
- DFYN – DEX with Liquidity Pools
As stated earlier in this post, the Uniswap V3 has also been dispensed on Polygon. This will bring a large amount of DeFi users to the Polygon ecosystem from ETH, where they can take the benefit of the dramatically lower fees.
MATIC Are Creating A ZK-Rollup Solution
Polygon declared on their official site that they obtained the Zero-Knowledge startup Mir for $400 million. The Mir team is connecting Polygon and availing their technology to construct their latest project that is known as Polygon Zero, which is a highly scalable, Ethereum compatible ZK-Rollup.
ZK-Rollups are getting ready up to be the next huge narrative in the digital currency space, and Polygon looks like a great option for investors in this account, and here is why:
- Mir, the entity that is acquired by Polygon, made the fastest scaling ZK scaling technology in the world.
- Polygon has combined with Hermez Network, which is an open-source ZK-Rollup.
- Polygon has declared Hermez zkEVM, a ZK-friendly EVM (Ethereum Virtual Machine).
- Polygon declared Polygon Miden, which is an upcoming STARK-based, Ethereum-compatible rollup.
- Polygon is functioning on Polygon Nightfall, which is a privacy-focused rollup.
Polygon (MATIC) has previously positioned itself as a feasible scaling solution for Ether; adding ZK-Rollups to their armory will further hype scalability capacities. This, in turn, will bring more investors to the protocol and raise the value of MATIC.
How To Invest In Polygon Cryptocurrency?
If you plan to make your investments in Polygon cryptocurrency, we recommend you to avail cash based exchanges like CEX that are available across the globe, or Bitpanda that is available only in Europe that will enable you to easily sell and purchase digital currencies for cash. And if you plan to hold your MATIC for a long period of time, we recommend you to get yourself a hardware wallet like Ledger wallet. So by now if you were worried about is Polygon crypto a good investment, you have got your answer.