Polygon is a layer 2 scaling solution for Ethereum. The network had existed for a while and was originally known as Matic. However, in February Matic rebranded as Polygon with tweaks and changes that led to the network gaining the spotlight with its phenomenal performance. The year-to-date returns of MATIC coin are at a staggering 6,300%. The coin established its all-time high at $2.68 during the peak of the 2021 bull run.
At the time of press, the cryptocurrency stands at $1.12 and the market has been undertaken by bearish momentum as of late. However, the recent performance does not negate the fact that Polygon has good long-term potential. Polygon may become crucial to the sustainability of Ethereum in the coming days – which will make it even more valuable.
What is Polygon and how is it crucial for Ethereum?
The framework of Polygon enables the interconnection between blockchain. The Ethereum scaling solution is designed to solve problems facing the second largest network in the blockchain space. Ethereum is regarded as a pioneer in the crypto space – second only to Bitcoin. The network introduced decentralized finance and decentralized apps which are employed through smart contracts.
With ETH now leading the DeFi space, it also had to encounter various problems. While high network activity and usage is a good thing for ETH, it can also lead to network congestion resulting in various problems – which it did in the case of Ethereum. During the bull run, Ethereum’s network suffered from problems like low transaction speed, phenomenally high gas fees, and low throughout. All of these factors result in user dissatisfaction. Layer 2 solutions for the queen of the market are designed to solve these problems.
Matic network – the predecessor – employed a technology called Plasma which processed transactions off-chain and then finalized them on Ethereum’s network. Polygon takes the offering to the next level and is a whole framework for deploying interconnected blockchains on Ethereum. Developers can launch pre-designed and customized blockchain because of Polygon.
Is Matic coin a good long-term investment?
The performance in the bull run of 2021 is a testament to what Polygon can achieve. Ethereum is the queen of the market and its relevance cannot be stressed enough. So, any network connected with Ethereum’s success will automatically give it a boost. Apart from this, Polygon also has ambitious goals other than its scalability for Ethereum. The network envisions a borderless and open world where there are no hindrances between or across the decentralized space.
With over 350 dApps live on the network and more migrating from Ethereum because of its lightning-fast speed and low transaction fees, Polygon can be considered a good long-term investment and it still has a lot of developments underway. According to the estimates of Wallet Investor, the one-year price is expected to stand at $3.39 while the five-year projection is at $12.42. Digital Coin Price is not as bullish on the cryptocurrency but predicts an uptrend with $5 to be crossed by 2028.
