A Beginner’s Guide: What Is Matic Coin (Polygon)?
While the whole of the cryptocurrency market is down, an altcoin, also known as Matic coin, or by its newer name Polygon, has registered a sharp jump. It has happened due to the sudden and wide adoption, by many service providers, of this Ethereum-based blockchain technology. This widespread acceptance has created a frenzy in the crypto market. But what is a Matic coin? And what are the reasons behind its sudden growth? Let’s take a look.
What Is Matic Coin?
Matic coin is an Ethereum-based altcoin that empowers the Polygon network (originally called the Matic network). It aims to offer a sustainable scaling solution on issues such as high transaction fees and slow speeds.
Since the Ethereum blockchain is experiencing a high volume of transactions, this has resulted in a heavy load on the network, resulting in decreased performance and increased transaction fees.
Hence, Polygon Matic aims to improve user experience by providing a Layer 2 scaling solution to the Ethereum blockchain.
With the help of smart contracts, Ethereum can be converted back and forth to Matic coins, enabling a scalable Ethereum ecosystem.
Polygon was initially launched as the Matic network in 2017. It used sidechaining to improve scalability.
In February 2021, the Matic network was renamed Polygon and relaunched as a platform to build interconnected blockchain networks based on Ethereum.
How Does Matic Coin Work?
The Polygon sidechain is a platform that helps in building interconnected blockchain networks. The Polygon network on which the Matic coin operates uses sidechaining to improve scalability.
There is an Ethereum main chain in the architecture, which is parallel to the side chain of the Polygon network.
A Matic token gets transferred between the mainchain and the sidechain when required. This transfer takes place with the help of the plasma chains used in the Polygon network.
When it was initially launched, the Matic network was basically a scalability solution for Ethereum-based applications.
With its rebranding to Polygon in 2021, it has become much more than that. It is now enabling developers to implement customized blockchain networks supporting interoperability and scalability.
Polygon mainchain uses a Proof of Stake (PoS) approach to decide who can mine or validate a block. It is in complete contrast to the Proof of Work (PoW) approach, wherein everyone competes to solve a problem and the miner with the most expensive hardware wins.
Polygon uses Heimdall architecture for choosing block producers. It adds increased scalability and security to the network.
Block producers are chosen randomly from among the Proof of Stake validators in the network. It provides increased security and scalability, as the pool of validators is quite large.
The Polygon validators running parallel to the Ethereum mainchain keep on validating the Polygon ecosystem transactions at regular checkpoints. This helps maintain consistency and addresses any dispute that might arise.
Apart from this, Polygon has its own Polygon network layer, which is essential for block production and local consensus in its blockchain ecosystem. Ethereum Virtual Machine (EVM) helps Polygon implement smart contracts.
Polygon uses ZK-Rollups that combine a large number of off-chain transfers into a single transaction. This mechanism helps in adding anonymity to the transaction, thus ensuring privacy for the user.
Even while validation and consensus are available, no private information is leaked. This method is called a zero-knowledge proof method.
Polygon uses optimistic rollups, which provide for simpler and faster transactions. Optimistic rollups are a Layer-2 scalability solution running smart contracts on the scale with a user-friendly interface.
All of these strategies combined provide Polygon with a distributed and secure architecture. This is how it easily surpasses the current throughput of 14 transactions per second of the Ethereum network.
This increased scalability makes transactions a much cheaper commodity than they currently are in Ethereum’s overburdened network.
Benefits of Matic Coin Over Alternative Blockchains
Even though there are many scalability solutions based on ETH, Polygon has its own distinct set of advantages. Some of these advantages are listed below.
- Polygon is highly secure due to the regular checkpoints that ensure consistency across the transaction life cycle.
- In addition, there are mechanisms for local consensus. It adds an extra layer of security to the architecture, and its usage of PoS with Heimdall architecture makes it more secure than its competitors.
- Matic successfully uses features such as Plasma, ZK0-Rollups and PoS that its competitors have failed to incorporate.
- Heimdall architecture helps it clear bottlenecks, making it a more scalable solution.
- Polygon is highly customizable and enables developers experienced in Ethereum-based application development to use the language of their choice.
- The additional Ethereum layer and the security layer are optional. So solution providers using Polygon network have the complete independence to customize it according to their own needs.
- Polygon has been designed to take complete advantage of the Ethereum network.
- With its decentralized approach, it enables the Ethereum blockchain to complete a thousand times more transactions.
History of Matic Coin
Matic coin was first released in 2017 with the launch of the Matic network. It started with a vision for how to solve the inherent problems of the Ethereum network related to its performance and affordability issues.
Since then, it has been widely adopted in various projects, making it one of the most popular scalability solutions in the market.
To build upon its initial success, the team behind Matic coin expanded its services with a broader vision.
Thus, in February 2021, the Matic network was rebranded to Polygon, offering an improved scalability solution incorporating interoperability in its long-term vision.
That’s why it has been designed to create a world where users of different blockchains can interconnect and transact without the need for a third-party enabler. Drawing parallels with IoT, people like to refer to it as the IoB, i.e., the Internet of blockchain.
Matic Coin Price History
The Matic coin entered 2021 with a price of no more than $0.025. However, since then its price has seen a massive increase. This year has been exceptional for Matic coin, increasing more than 9000% in the first half of the year alone.
The first peak came around March 13, with the Coinbase listing, and the second peak came on May 19, with its value reaching as high as $2.99 at one point. Alongside the Bitcoin price dip, Matic is priced at $1.62.
The increasing price of the Matic coin can be attributed to the rising popularity of the Ethereum network, which has seen a massive increase in price and popularity in 2021.
Another reason may be the enthusiasm that companies have shown in implementing their Ethereum-based applications using Polygon. Polygon stands out as a natural choice for service providers who want to offer L2 (Layer 2) scaling services with much lower gas fees.
Use Cases of Matic Coin
- Matic Network can enable users to make payments through cryptocurrencies using DApps.
- With its lower turnaround time and cheaper transaction fees, it becomes a suitable solution for application developers and service providers. It improves the overall experience the user has while using any DApp. The token on the Matic network can be used to pay transaction fees.
- People still prefer centralized exchanges over decentralized ones, due to their performance and security issues. Polygon’s network solves the problem by enabling people to trade in mere milliseconds.
- This performance jump comes without any compromise in security of trades made on the network. Increased throughput, along with an extra security layer, makes the Polygon network as secure as it gets.
- The gaming industry has largely been a centralized one. People do not have any ownership or control over the digital assets they acquire with their hard work — or even real money. They can lose it any time if the central authority so decides.
- Decentralization of the gaming networks puts control into the hands of the gaming community itself. People can obtain complete ownership of their digital assets. Polygon’s network helps to build this decentralized gaming world with its impeccable transaction performance.
Matic Coin Current Projects
Matic coin is driving innovation payments on DApps, decentralized exchanges and gaming networks. Its fast market adoption is driving its favorable prospects and price jump.
There are around 400 projects currently using the Polygon network to implement their services.
Some projects using Matic coin currently include:
- This is a gaming project using the decentralized network based on Matic.
- A virtual reality platform powered by Polygon, this metaverse casino is building a decentralized gaming environment all over the world.
- People can play with cryptocurrency on this platform, based on the Polygon network.
- Polygon has powered up the game of decentralized borrowing and lending with projects like EasyFi.
- It seeks to make decentralized loans seamless at scale by addressing the speed and cost issues faced by other solution providers.
- This is a decentralized finance protocol that uses Polygon for the benefits it adds to the Ethereum network.
- It is a decentralized social network with no central authority overseeing it.
- Sapien uses Polygon’s network for its implementation, and boasts supremacy among social networks with its complete privacy approach.
The Future of Matic Coin
Matic coin has bagged a lot of projects, and a lot more popularity than anyone expected a year ago. Aave’s recent announcement to use Polygon to provide services has given another push to its popularity.
Another ambitious project, Quarters, will be using Polygon to ensure faster and cheaper transactions. With SEC approval, Quarters envisions becoming the first universal gaming currency.
Matic Price Prediction
Market projections look rather bullish for Matic coin.
Some experts are very optimistic about Matic’s future performance and believe it could be a very good investment, and that the price of one Matic coin could possibly cross $5 by the end of 2021.
But even with the best predictions, it’s prudent to invest only what you’re ready to lose. Future predictions vary from exchange to exchange and expert to expert.
A value of $10, however, is the most optimistic prediction, with more conservative estimates seeing a price of $1.65 for the end of the current year. However,
However, there have been critics that Matic is struggling to break out from the current price as whales continue to vanish Polygon’s upside potential is limited as whales continue to vanish.
The Bottom Line
Polygon, formerly known as the Matic network, uses innovative technology. No one for sure can predict Matic’s future performance, but the Matic team clearly has a forward-looking vision, and the Matic network and its coin look set to be in the market for the long term. Hence, it may well be a good investment in your portfolio.
The adoption of blockchain to general aspects of life has only just started, and technology offering scaling solutions like Polygon can democratize blockchain technology by helping developers build their own sovereign and customized interoperable blockchain networks.
However, developers and investors should invest in the technology for their own needs and profitability — instead of the hype.
The cryptocurrency market and world of blockchain is as risky as it is profitable. A little precaution will go a long way in building everyone a strong crypto portfolio, and it may be wise for Matic coin to be a part of that.