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7 Feb 2022

The Rise of Polygon: The Story Behind India’s Biggest Cryptocurrency

Devansh Sinhal

Polygon is a problem-solver. Since Ethereum, the most prominent cryptocurrency network after Bitcoin, has its own set of troubles when it comes to scalability and fees, it does not have a great user experience. A huge client base means that Ethereum’s networks are frequently clogged, which makes transactions expensive for everyone.

With so many problems on Ethereum and the lack of a viable alternative, Polygon has now emerged as a hero. This India-based blockchain platform has provided solutions to these challenges by implementing an innovative and unique Layer-2 solution – which allows Polygon to work on Ethereum for verifying its transactions but at a fraction of the cost.

This blog will discuss how Polygon became one of the most extensive crypto networks by market cap, and what problems it solves in the real world.

Key Takeaways

  • MATIC is the native token of the Polygon blockchain. Polygon is a complete multi-chain system, which means that it can connect Ethereum-based blockchains and solve scalability issues.
  • Since Polygon works as a multi-chain network, it provides infrastructure for facilitating blockchain networks that communicate with one another.
  • Over the last year, several projects like Aave and Curve have been launched on Polygon.
  • Experts estimate that Polygon, with increased adoption and development, has a very bright future in the short and the long terms.

Polygon (MATIC) Analysis

Polygon MATIC is the native token of the Polygon blockchain. Polygon is a complete multi-chain system, which means that it can interconnect Ethereum-based blockchains and solve scalability issues. Polygon is also a Layer-2 solution, which implies that it does not have to have its own primary blockchain to function; it works on top of Ethereum’s network. Polygon also utilizes side chains, which divert traffic and user transactions from the leading network, freeing up computing power in a smart manner.

Since Polygon works as a multi-chain network, it provides infrastructure for facilitating blockchain networks that communicate with one another. Although all of this communication happens outside the main Ethereum network, the operation retains the security and liquidity of the underlying blockchain, making it interoperable and immutable.

Rise of Polygon MATIC

The Rise of Polygon (MATIC)

MATIC is primarily used as staking tokens on the blockchain to validate transactions via the Proof of Stake (PoS) method. Miners can use these coins both as capital assets (that appreciate with time) and as utility tokens (which can be staked for regular returns).

The creation of the Polygon network was set into motion in October 2017. Three individuals, Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, noticed the lack of efficiency and scalability in Ethereum and decided to do something about it. The three partners then went on to start MATIC, basing their operations in Mumbai.

When the platform had been developed, it could provide scalable solutions to Ethereum’s problems and utilize sidechains as scalability assets. The network also bypassed the Proof of Work (PoW) problem by establishing itself as one of the only PoS blockchains at the time.

In February 2021, Polygon undertook a rebranding exercise and completely changed its mission statement. From then on, it would become the network that would prove to be the interconnection and bridge between blockchains and networks while utilizing the security of Ethereum.

This change was revolutionary. The ability to connect multiple channels and networks with one another could prove to be the technology that resolved the blockchain scalability problem altogether.

As Sandeep Nailwal, one of the founders, remarked, “In terms of our tokens in circulation, it’s like 60% of our total supply, which amounts to around $14 billion in valuation. In terms of the users, Aave is one of the largest DeFi applications launched on Polygon, and they have 30,000-plus users compared to Ethereum, where they have 26,000 users.”

“So overall, on Polygon, we are approaching 1 million unique addresses, which is 30–50% of where Ethereum is today. Polygon is able to onboard these new users because it is a scaling platform… So we are able to onboard retail users,” he added.

Recent Developments

Recently, MATIC has been the buzz of the crypto community. Here are some exciting happenings:

  • Polygon launched a $200 million initiative with Alexis Ohanian’s Seven Seven Six, to back projects at the intersection of social media and Web3 in December 2021.
  • DraftKings, which is a huge US-based fantasy sports betting company, announced its plans to launch an NFT marketplace on Polygon.
  • The number of apps developed on Polygon reached 3,000, growing hugely from a measly 30 the year before.
  • Coinbase, one of the biggest crypto exchange platforms in the world, announced plans to integrate Polygon PoS as their first scaling solution in September 2021.
  • The development team launched Polygon Studios, a Web3 and NFT arm of the network.
  • OpenSea, the world’s biggest NFT marketplace, was recently integrated with Polygon.

What’s Next?

Over the last year, several projects like Aave and Curve have been launched on Polygon, and metaverses like Decentraland have chosen it as their dedicated scaling solution. Decentralized exchanges like UniSwap and SushiSwap have also gone live on Polygon, allowing users to trade in the coin without having to deal with intermediaries.

In fact, the now well-known sale of the first-ever Tweet for $2.9 million was conducted on Valuables, a dApp made on the Polygon blockchain.

Experts estimate that Polygon, with increased adoption and development, has a very bright future in the short and the long term. Since its involvement in numerous dApps and DeFi projects makes it future-proof, Polygon does have immense potential for steady growth as the cryptocurrency world becomes more inclusive and extensive.

Want to buy Polygon MATIC in India? Do it on CoinSwitch!

Frequently Asked Questions

Is Polygon a good investment in 2022?

Whether Polygon is a good investment or not depends on your risk appetite and needs as an investor. Polygon is a cryptocurrency and a volatile investment asset. Investors should conduct their own due diligence before investing in the coin. We encourage you to figure out whether an investment in Polygon makes sense with your risk appetite and only then invest.

Will Polygon prices go up?

Since Polygon is a cryptocurrency that is constantly affected by various untrackable market forces, it is nearly impossible for anyone to predict how it will react in the short term accurately. Analysts, however, do claim that it is an excellent investment in the long run.

Why is Polygon rising?

The rise in the price of MATIC is driven by several fundamental developments in its underlying blockchain network, Polygon. As more projects are launched on Polygon, and the trading volumes for its network increase, the coin becomes valuable, and hence, the prices rise.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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Devansh Sinhal

Content Writer

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