A Look into Polygon (MATIC): The potential for traders

Matic, an Ethereum infrastructure project, changed its name to Polygon in early 2021. Developers of Ethereum applications may use Polygon's solutions, which focus on the Ethereum network's architecture, to make things happen quicker and more securely.

Before its relaunch as Polygon, the old Matic project had over 80 apps and processed over 7 million transactions for approximately 200,000 users each month. Therefore, what distinguishes this cryptocurrency project and its accompanying token, Matic, from other forms of cryptocurrency? Continue reading to learn all there is to know about Polygon (MATIC).

The historical context

Like Matic before it, Polygon has several objectives, one of which is to make Ethereum and the Ethereum blockchain more accessible to developers.

Many investors are familiar with Ethereum's token, Ether — but Ethereum is so much more than money for developers. While the token is critical to the Ethereum blockchain's operation, Ethereum was developed to facilitate application development and host smart contracts — agreements that can be approved and performed without the consent or intervention of a third party such as a court or lawyer.

The creators of Matic discovered that scalability and user experience concerns had hindered the mass adoption of smart contracts and Dapps. The whole network would be sluggish. The solution: Matic would employ sidechains to handle Ethereum applications and contracts without slowing down the whole system.

This was a huge turn for Matic in this sense, like how crypto became big and enticed people to engage in it. But it’s also important to stay safe doing it on trusted crypto platforms like Binance, Coinbase, and Bitcoin Loophole, which can help traders deal with their crypto securely.

Just as Ethereum transactions need gas in the form of Ether, the Matic token would serve as the means of exchange for Matic Network transaction fees.

The initiative began in 2017, and by 2019, it had garnered attention and financing from industry heavyweights like Coinbase, bringing a new level of legitimacy and attention to the vast cryptocurrency sector.

How it operates

Polygon touts its network as a Swiss army knife for scaling Ethereum and developing infrastructure.

While many of the new projects comprising Polygon are still in development, the core framework comprises a succession of blockchains compatible with and function with Ethereum.

The Matic Token is critical in the original Matic Network, which Polygon has said would continue to run. It serves as a means of payment and settlement amongst individuals who engage inside the Matic Network's ecosystem.

This equates to the Matic Token serving as a medium of exchange for apps or users on the Polygon Network. Additionally, like other Ethereum blockchains, the Polygon Network charges transaction fees, which may be paid in the Matic Token in this instance.

Matic also employs proof-of-stake technology to verify transactions and protect the network instead of proof of work (the fundamental technology of Bitcoin). This requires users to stake or deposit a portion of their tokens for the network to operate.

Matic tokens will be released every month till 2022. Approximately 60% of the Matic tokens that will be distributed have already been released. This contrasts with other cryptocurrencies created by effectively solving massive mathematical problems.

As with any investment, there is no way to know whether Matic is or will remain a good investment. As has been the case with many cryptocurrencies, the value of Matic tokens has been very volatile, after the massive rises in crypto prices earlier this year and the ensuing choppiness, with enormous spikes and declines.

Bottomline

Polygon, originally known as Matic, utilizes the Ethereum network to accelerate and secure application processing. Its token, dubbed Matic, serves as the medium of exchange inside that ecosystem.

One of the fundamentals of investing in crypto is constantly being aware of what you're doing. While some tokens or coins are intended to function similarly to money or savings instruments, others, such as Matic, have value in dollars or other cryptocurrencies but are mainly utilized in conjunction with another blockchain or network. The value of a coin is defined by its usage within that network and the amount of speculation held by investors.