What is Polygon (MATIC) and How Does It Work?

Share This Post

If you’re considering investing in cryptocurrencies or are involved in various DeFi projects, chances are you’ve heard of Polygon. In recent years, Polygon has rapidly gained prominence as a leading scaling solution for Ethereum. But what exactly is Polygon, and how does its native MATIC token work? Let’s take a deeper dive.

What is the purpose of Polygon (MATIC)?

At its core, Polygon is a protocol and framework that aims to make Ethereum more accessible. As many crypto enthusiasts know, high transaction fees and network congestion have plagued Ethereum for a long time. Polygon addresses this so-called “scaling problem” through a multi-chain architecture.

Specifically, Polygon publishes “sidechains” that take transactions off of the main Ethereum blockchain, processes them, and then updates the mainchain. This dramatically increases throughput while maintaining security. The MATIC coin is used to govern and fuel the entire Polygon network. Transaction fees and staking rewards are paid in MATIC.

How does Polygon (MATIC) work?

So in technical terms, how does Polygon actually function? There are a few key concepts to understand:

Proof-of-Stake (PoS): Validators lock up their MATIC tokens to validate transactions and secure the network. This replaces energy-intensive mining.

Sidechains: These are independent blockchains that mimic the Ethereum Virtual Machine. They process transactions much faster than L1 Ethereum.

State checkpoints: The sidechains periodically update (“checkpoint”) their state to Ethereum, ensuring security via the mainchain.

State transition: Transactions are sent to a sidechain, processed, and then committed through a state transition on Ethereum.

Polygon allows decentralized applications to enjoy high throughput of sidechains while still benefiting from Ethereum’s industry-leading security model. And the modular design makes it easy to plug into existing infrastructures.

Does Polygon (MATIC) have a future?

Polygon matic future

Many industry observers believe Polygon has a bright future for several reasons. Firstly, Ethereum scaling will remain crucial as usage explodes in the coming years. Polygon is well-positioned as one of the leading layer-2 solutions.

Secondly, by compatibility with Ethereum, Polygon opens the doors for thousands of existing dApps to gain massive scalability almost effortlessly. We’ve already seen projects like Aave, Uniswap, and OpenSea integrate with Polygon.

Lastly, Polygon is actively developing the protocol through acquisitions and major funding initiatives. Their $250 million investment fund and purchase of Hermez aims to accelerate innovation across the entire ecosystem.

Considering the network effects already in place and the team’s clear roadmap, Polygon/MATIC appears here to stay as a major blockchain infrastructure in the years ahead. Everyone can get updates very fast thanks to EXEcrypto.

When Polygon (MATIC) launched?

Polygon was originally launched in 2017 under the name “Matic Network” by founders Sandeep Nailwal, Anurag Arjun, and Jaynti Kanani. The network relaunched as “Polygon” in 2021 to better reflect its expanded scope and multi-chain ambitions.

Some key dates:

  • August 2020: Mainnet launch of the Polygon PoS chain.
  • February 2021: Surpassed 1 million transactions processed.
  • October 2021: Launched Polygon Studios investing arm.
  • March 2022: Acquired Hermez for zkRollup support.

So while MATIC has been around for nearly half a decade, it was the 2021 relaunch and flurry of developments that truly placed Polygon on the map as a leader in blockchain scaling.

Is Polygon (MATIC) a scam?

Polygon matic secure

No,Polygon is absolutely not a scam. As one of the largest and most active layer-2 networks, Polygon has built up tremendous legitimacy over the past several years. Some of the key indicators that Polygon is genuine:

  • Open-source code publicly reviewed by thousands of developers.
  • Massive funding from top VC firms like Paradigm.
  • Partnerships with industry-leading companies like NBA Top Shot, and Decentraland.
  • Consistent protocol upgrades and a large team of paid developers working to expand the ecosystem.
  • Real-world utility powering DeFi apps, NFT marketplaces, and other decentralized services.

So without a doubt, Polygon is the real deal. Just keep your assets on a trusted exchange or wallet to be extra safe when dealing with any cryptocurrency.

Is it safe to invest in Polygon (MATIC)?

Provided you purchase MATIC tokens from a reputable platform and store them securely, then investing in Polygon can definitely be considered a reasonably safe bet. Some notes on managing risk:

  • Only invest what you can afford to lose, as with any young cryptocurrency project.
  • Diversify your portfolio rather than going all-in on a single coin.
  • Hold tokens in a non-custodial wallet like MetaMask for greater security than an exchange.
  • Be aware that like all crypto, MATIC value is volatile and sudden dips can occur.
  • Continued development is crucial, so monitor network activity and protocol progress.

As long as you practice basic crypto safety and invest strategically rather than gambling, acquiring and holding MATIC tokens poses no greater security risks than investing in other major layer-2 networks. Just remember that patience is important in this space!

Is Polygon (MATIC) worth it? MATIC Price 2023

Polygon matic funds

It’s difficult to say definitively whether MATIC will be “worth it” long-term. However, there are reasonable arguments that it has strong potential:

  • Trading around $0.60 presently, with all-time high of $2.92 in November 2021.
  • Total supply of 10 billion, with 93% already in circulation.
  • Consistent weekly transaction volume of $1-3 billion across decentralized exchanges.
  • Continued developer and TVL growth on Polygon platforms like Polygon Pos and Hermez.
  • Huge addressable market as Ethereum scaling solution for years to come.

Given these marketplace conditions and the pivotal role MATIC will play in the Polygon ecosystem, many experts forecast its value to gradually appreciate over the next 12-24 months. But short-term price is impossible to predict in this space. Focus on the technical potential!

Where to buy Polygon (MATIC)?

Some of the most popular and trustworthy locations to purchase MATIC tokens include Coinbase, Bybit, Binance, OKX, and Crypto.com. These centralized exchanges offer fiat onramps, large crypto selection, and insurances to protect funds in some cases.

For decentralized options, traders can provide liquidity for MATIC pairs on platforms like QuickSwap, Uniswap, and Sushiswap. Peer-to-peer marketplaces like LocalCryptos also allow direct buyer/seller matches. Just be sure any DEX supports Polygon for optimal fees.

How to sell Polygon (MATIC)?

Should you eventually want to liquidate your MATIC holdings, the process mirrors buying. Access your wallet through the exchange used for purchase (Coinbase wallet, Crypto.com app) and select “Sell” next to MATIC.

You can then choose to sell for another cryptocurrency or withdraw funds to your bank account. Fees apply, so consider limits or converting a portion to a coin with lower trading costs. Monitor prices closely for optimal exit timing too.

With regular profit-taking, traders can dollar cost average gains over time versus risky all-or-nothing sells. Overall, selling MATIC is no different than any other supported coin once you have an exchange account in place.

How to stake Polygon (MATIC)?

Buy Sell Polygon MATIC

Staking MATIC tokens is a great way to generate passive income from your holdings. There are several options to look at:

  • Official Staking via the Polygon PoS blockchain for 5-10% APY rewards. Requires constant uptime as a validator node.
  • Staking Pools like on Crypto.com, Binance or Kraken provide 3-10% APY with no technical setup – they run validator nodes.
  • Lido Finance offers staking via a liquid staking protocol, so MATIC tokens remain liquid and tradable for 6-12% APY.
  • DAOs like Aavegotchi provide special in-game rewards for staking MATIC in their treasuries.

By locking tokens, stakers directly secure the network while Earning substantial interest compared to traditional savings accounts. It’s a powerful way to put idle crypto to work!

How to mine Polygon (MATIC)?

In summary, it is not currently possible to directly mine MATIC tokens as the network operates using a delegated Proof-of-Stake (PoS) model instead of Proof-of-Work (PoW) mining. The only options are:

  • Validating transactions as a node operator to earn rewards.
  • Staking MATIC tokens through exchanges or protocols as covered above.
  • Contributing to the overall Polygon/MATIC ecosystem growth such as development work or community management.

Related Posts

Best Crypto Launchpool Platforms for Staking in 2024

Crypto launchpool platforms have become quite popular in recent...

Best Halal Cryptocurrencies for Islamic Investors in 2024

If you're a Muslim investor curious about cryptocurrencies but...

Best Crypto Launchpad Platforms for New Projects 2024

Crypto launchpad platforms are among the most exciting innovations...

Top Halal Crypto Platforms for Islamic Finance 2024

The search for halal crypto platforms lies at the...

Best Crypto Staking Platforms for Passive Income 2024

As the title suggests, crypto staking platforms are central...

Best Crypto Referral Programs for Earning Rewards in 2024

As the popularity of cryptocurrencies continues to surge, so...