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Polygon (MATIC)
Table of Contents
Overview
Polygon Matic is a blockchain scalability platform that is designed to solve some of the major issues faced by the Ethereum network. In this guide, you will get a low down of what Polygon Matic is and whether it is a good investment or not.
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What is Polygon Matic?
Polygon is a layer 2 blockchain solution built on the Ethereum network that aims to solve the scalability issues faced by the network. In simple words, Polygon is designed to speed up processes on the Ethereum blockchain to make it more efficient and reduce transaction fees.
Polygon is also referred to as the internet of the Ethereum blockchain as it is helping the network overcome some of the major issues it is facing currently. It was initially known as Matic, but the team decided to rebrand it to Polygon as the project evolved. However, the utility token used by the network for payments, staking, and governance is still known as MATIC and is available across several cryptocurrency exchanges, including Binance and Kraken (US citizens).
Another reason behind Polygon’s rebranding was that the blockchain community started to view it only as a layer two solution, where in reality, it is much more than that. Polygon Matic is an ecosystem of collaborative blockchains that can scale massively without losing their self-sovereignty.
What is a Layer 2 Solution?
Layer 2 solutions refer to secondary projects (protocols or frameworks) that are built on top of an existing blockchain network. The main function of a layer two protocol is to solve the scaling and transaction challenges faced by a major blockchain network.
Layer 2 solutions are especially needed for blockchains like Ethereum and Bitcoin as they can only process a handful of transactions at a time. As of today, Ethereum can handle around 15 to 45 transactions per second, while Bitcoin process 4.6 transactions per second at an average.
Both Ethereum and Bitcoin are growing rapidly, and with mass adoption, they are facing numerous challenges in terms of scalability and TPS (Transactions per second). Layer 2 solutions can help these blockchains perform better by dramatically improving their TPS to thousands of transactions per second.
What these solutions do is that they create a separate framework on which the transactions can be processed independently. This takes the burden off from the layer one blockchain and processes thousands of transactions per second on the network. This process is also referred to as off-chain scaling.
Some of the main layer two solutions other than Matic include:
- Bitcoin Lightning Network
- Ethereum Plasma
History of Polygon Matic
Polygon was launched in October 2017 by three prominent members of India’s blockchain community Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. In the beginning, Matic was only a layer two solution, but with time, it became an ecosystem of collaborative and self-sustainable blockchains built on the Ethereum network. It is also sometimes referred to as Ethereum’s Internet of blockchains.
In 2019, Polygon moved to its own network, as before that, it was only active on the Ethereum network. Polygon also played an important role in deploying Plasma on the Ethereum network and was a significant contributor in implementing WalletConnect Protocol.
In April 2021, one of the most prominent crypto projects, AAVE, launched on Polygon, which was a big achievement for the project and sent the price of MATIC token flying.
How Does Polygon Matic Work?
To understand how Polygon Matic works, we will need to view it as a four-layered structure where every layer represents a stage of the process. The layers can be viewed as:
- First layer: Ethereum network
- Second layer: Security layer
- Third layer: Polygon network
- Fourth layer: Execution layer
The first layer engages directly with the Polygon chains and is responsible for finalizing transactions and staking. The second layer offers validators as a service along with additional security. The third layer itself is a combination of layers that handles local consensus, validation (block production), and collating transactions.
The fourth and last layer handles the transactions that are taking place on the Polygon network. The execution layer is also a combination of two different layers, i.e., Execution environment and Execution logic. The former operates as a plugin-play while the latter is written in Ethereum smart contracts.
What are Polygon Chains?
Polygon chains are of two types:
- Stand-alone chains
- Secured chains
Stand-alone Chains
Stand-alone chains work independently and are responsible for the network’s security. It has its own set of validators and offers more flexibility and independence for operations. They are more suitable for large-scale projects that have big communities (enterprise projects).
Secured Chains
Secured chains do not have their own validators and instead rely on security as a service. The benefit of these chains is that it allows the users to opt for securities from shared ecosystem like Polkadot. These chains are not as flexible as the stand-alone chains, but they do offer much better security.
Polygon Matic Token
The MATIC token is the utility token of the Polygon blockchain and can be used to pay for services and governance on the network. The initial circulating supply of the currency was 3.2 billion, which has increased significantly over time. The max supply for the MATIC token is limited and cannot exceed 10 billion. In the initial stages, 3.8% of MATIC’s supply was sold privately, 16% was set aside for the team, 4% for the advisors, and 12% for network operations.
How Many Transactions Can Polygon Matic Process in a Second?
Polygon is designed specifically to improve the transaction speed for projects that are built on the Ethereum blockchain. Matic claims that it can process millions of transactions per second; however, the current best recorded for Polygon is 65,000 per second. It is a very high number considering Ethereum can barely process 50 transactions per second on its best day.
Polygon Matic Price Predictions for 2025
MATIC is arguably one of the top-performing cryptocurrencies in the world and is an excellent choice for long-term investment. The layered two solutions offered by Polygon are second to none, and as cryptocurrencies become more mainstream, the demand for MATIC will rise dramatically.
According to DigitalCoinPrice, the price of Matic will range between $3.57 and $4.14 in the year 2025. Here is how MATIC will look throughout 2025:
Where to Buy Polygon Crypto?
You can purchase or trade MATIC on most of the decentralized or centralized exchanges active today. If you are new to the crypto space, it is recommended that you purchase the crypto directly from a centralized crypto exchange with lowest fees as they are easy to use and offer excellent security. The exchanges that offer MATIC include:
- Binance (Global)
- Kraken
- Binance US
You can also purchase MATIC directly from a decentralized cryptocurrency exchange like UniSwap.
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Conclusion: Is Polygon Matic a Good Investment?
Whether Polygon Matic is a good investment or not comes down to one simple question, and that is why do Polygon Matic matters? Ethereum is on the road to becoming a mainstream cryptocurrency, and the more it pushes forward, the more challenges it faces in terms of scalability and transactions. High traffic on the Ethereum blockchain can incur serious gas fees, and MATIC can help users avoid that.
With the help of Polygon MATIC, users will be able to process thousands of transactions in one second regardless of how much traffic there is on the network. Also, Matic is not only beneficial for Ethereum, but it is also assisting other cryptocurrency projects that are running on the Ethereum blockchain.
Last but not least, Polygon is also bringing different blockchains together and making it easy for projects to move from one blockchain to another. Scalability and Interoperability are two of the major issues existing in the crypto space today, and Polygon is addressing both of them.
All these features make Polygon Matic a great investment for the long term. However, it is advised that you only invest an amount of money that you are willing to lose because crypto space is highly unpredictable.
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