Polygon

Polygon

MATIC
$1.02
-3.30%
$0.97915370

24H Price

$1.06


About Polygon

The Polygon price is $1.02, a change of -3.30% over the past 24 hours as of 11:51 a.m. The recent price action in Polygon left the tokens market capitalization at $9.44B. So far this year, Polygon has a change of 4.41%. Polygon is classified as a Smart Contract Platform under CoinDesks Digital Asset Classification Standard (DACS).

Polygon (MATIC) is the native cryptocurrency that powers the Polygon Network, a layer 2 platform created in 2017. Originally called the Matic Network, the Polygon Network allows developers to create and deploy their own blockchains that are compatible with the Ethereum blockchain with a single click, as well as enables other Ethereum-based projects to transfer data and tokens between one another using the MATIC sidechain. Think of it as a smaller blockchain that runs in parallel with the Ethereum blockchain. The price of Polygon’s token, MATIC, has skyrocketed this year.

MATIC asset price

The MATIC cryptocurrency first launched in 2019, two years after the Polygon network went live, via an “initial exchange offering” (IEO) hosted on crypto exchange Binance’s Launchpad platform. IEOs are initial coin offerings that take place on an exchange. These kinds of sales are supposed to be more trustworthy because the hosting exchange performs its own due diligence on the project prior to the sale. The initial price of MATIC was $0.00263, with a supply of 3.23 billion tokens. The sale secured the project over $5 million at the time.

MATIC’s price hit an all-time high of $2.40 in May 2021, three months after the project underwent a major rebranding from Matic Network to Polygon Network. Prior to the surge, which started in February and saw the token rise by more than 7,000% to its all-time high, MATIC had remained under $0.04 for almost two years.

The way MATIC tokens are allocated is slightly more complex than most other blockchain projects as the following applies:

  • 16% of the tokens are reserved for Polygon employees.
  • 4% goes to Polygon’s advisers.
  • 12% is distributed to the project’s network of stakers.
  • 23% goes toward supporting Matic projects.
  • 21% goes to the Polygon Foundation for shepherding development of the protocol.

How does Polygon (MATIC) work?

Polygon lives on top of Ethereum as a layer 2 blockchain. The underlying Ethereum blockchain ultimately secures and settles transactions, but developers have been designing second layers built on top of blockchains to increase the number of transactions per second that a network can process.

In what some call an “Internet of Blockchains,” Polygon aims to bridge many different blockchain projects on Ethereum, which all boast different features, but aren’t necessarily interoperable. There are other blockchain projects trying to solve a similar problem, such as Polkadot and Cosmos. Polygon aims to improve upon these projects by being compatible with Ethereum, tapping the second-largest blockchain’s security and mature ecosystem.

Polygon uses the proof-of-stake consensus algorithm to simultaneously secure the network and create new coins over time. That is the same method used by Ethereum’s 2.0 blockchain and Cardano, and requires users to lock up tokens in order to be randomly nominated to validate new blocks of data.

All Polygon updates can be tracked via the project’s official GitHub page.

How Staking Works on Polygon

Staking on the Polygon network is similar to staking on other proof-of-stake (PoS) blockchains, but with some unique features and processes:

  • Proof-of-Stake (PoS) Mechanism: Polygon uses a PoS mechanism, which means that validators are chosen to produce new blocks and confirm transactions based on the number of MATIC tokens they hold and are willing to "stake" or lock up as collateral.
  • Validators: These are nodes that produce new blocks and confirm transactions. To become a validator, one needs to stake a certain amount of MATIC tokens. Validators are incentivized to act honestly because malicious actions can result in their staked tokens being slashed (taken away).
  • Delegators: If you don't have enough MATIC tokens to become a validator or don't want to run a node, you can still participate in staking by delegating your tokens to a validator. This means you're giving your tokens to a validator to stake on your behalf. In return, you'll earn a portion of the rewards that the validator receives.
  • Rewards: Both validators and delegators earn rewards for staking. The rewards are usually in the form of MATIC tokens. The exact amount of rewards depends on various factors, including the total amount of MATIC staked in the network, the performance of the validator, and the staking duration.
  • Staking Duration: When you stake your MATIC tokens, they are typically locked for a certain period. This period can vary, but during this time, you cannot access or spend your staked tokens. Once the staking duration is over, you can unstake your tokens and access them again.
  • Slashing: This is a mechanism to punish validators who act maliciously or negligently. If a validator tries to cheat the system or fails to properly validate transactions, a portion of their staked tokens can be taken away (slashed). Delegators who have staked their tokens with a slashed validator can also lose a portion of their staked tokens.
  • Staking Platforms: There are various platforms and wallets that support staking on the Polygon network. These platforms make it easier for users to stake their MATIC tokens, choose validators, and manage their staked tokens.
  • Security and Decentralization: The staking mechanism ensures that the Polygon network remains secure and decentralized. By incentivizing a large number of validators and delegators to participate, the network becomes more resistant to attacks and centralization.
  • Layer 2 Scaling Solution: One of the unique features of Polygon is that it's a Layer 2 scaling solution for Ethereum. This means that while it has its own PoS mechanism, it also benefits from the security of the Ethereum mainnet. Transactions on Polygon are faster and cheaper than on Ethereum, making it a popular choice for many decentralized applications (dApps).

How is Polygon (MATIC) related to Ethereum?

Polygon is a scaling solution and framework for building Ethereum-compatible blockchains. As Ethereum has grown in popularity and usage, issues related to scalability, high transaction fees, and latency became more pronounced. Polygon seeks to address these challenges by providing a way for decentralized applications (dApps) to run on sidechains that are connected to the main Ethereum blockchain. These sidechains allow for faster transaction speeds and reduced fees, while still inheriting the security and decentralized nature of Ethereum. The bridge between Polygon and Ethereum ensures assets and data can be seamlessly transferred between the two, offering developers and users increased flexibility and choices in terms of scalability solutions without compromising on the decentralization and security that Ethereum provides.

How is Polygon (MATIC) different from other blockchains and cryptocurrencies?

Polygon distinguishes itself in the blockchain space with its specific approach to scalability and interoperability. Unlike many standalone blockchains that operate independently, Polygon operates as a scaling solution and a framework for building Ethereum-compatible blockchains. Its primary goal is to address Ethereum's scalability issues by facilitating off-chain computation through sidechains, allowing for faster transaction speeds and lower fees. This means that, while many other cryptocurrencies are based on distinct blockchains with their own consensus mechanisms and use-cases, Polygon focuses on enhancing the Ethereum ecosystem by providing it with additional scalability options. It achieves this while ensuring a level of interoperability with the main Ethereum chain, offering developers a versatile platform without necessitating a departure from the established Ethereum toolset and community. Its native token, MATIC, has multiple uses, including transaction fees, staking, and governance

Planned updates and changes to Polygon

Polygon 2.0

Polygon 2.0 is a set of proposed upgrades to the Polygon network that aim to improve its scalability, security, and decentralization. The upgrades are designed to make Polygon a more attractive platform for developers and users, and to position it as a leading Layer 2 scaling solution for Ethereum.

Some of the key features of Polygon 2.0 include:

  • A new architecture that uses a combination of ZK-rollups and Optimistic rollups to achieve unlimited scalability.
  • A new token, POL, which will be used to govern the network and secure it through staking.
  • A new governance model that is more decentralized and inclusive.
  • A new treasury that will be funded by transaction fees and used to support the development of the network.

Overall, Polygon 2.0 is a significant upgrade to the Polygon network. The upgrades have the potential to make Polygon a more powerful and versatile platform, and to help it achieve its goal of becoming the "Value Layer of the Internet."

Key events and management

Based in India, Polygon was launched by Jaynti Kanani, Sandeep Nailwal and Anurag Arjun in 2017. Originally called Matic Network, they rebranded the network as Polygon in early 2021.

Polygon has several advisers who are influential in the world of Ethereum, including Ethereum Foundation alumnus Hudson Jameson and Ethereum developer resource EthHub co-founder Anthony Sassano.

Popular decentralized finance (DeFi) projects SushiSwap, Curve and Aave already use Polygon for improved scalability and speed. According to CrunchBase, investors include billionaire entrepreneur Mark Cuban and Coinbase Ventures.

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