Introduction
Cryptocurrency projects are valued on account of their underlying utility that directly their price and adoption. This article explores Polygon a layer-2 Ethereum blockchain scaling solution and its use cases.
What is Polygon?
Polygon is a layer-2 solution deployed on the Ethereum blockchain in 2017. It is a scalability solution for the Ethereum blockchain and allows various decentralized applications on the network to connect.
At the same time, the project also adds to the security, flexibility, governance, affordability, interoperability, and infrastructure features of the host ecosystem.
What is MATIC coin?
MATIC is the native currency of Polygon and it is an ERC-20 token which makes it compatible with other tokens issued on the Ethereum blockchain. The protocol uses a modified form of the PoS consensus model that reaches consensus with each new block.
Advantages of Polygon Network
Here are some important utilities that the Polygon network offers:
- Developers can deploy new and existing blockchains using the Polygon protocol.
- The decentralized applications on the Ethereum network and others can communicate with each other using the Polygon protocols.
- Foreign blockchains and decentralized protocols can become compatible with the Ethereum ecosystem using resources from the Polygon network.
- The protocol can process transactions at a faster speed (2.1 seconds block time) on account of its unique staking-based consensus mechanism.
- Polygon network offers alternative channels for faster transaction processing on Ethereum thereby decreasing the gas inflation. The average gas on Polygon is $0.01.
- Polygon has launched Polygon Studios which focuses on decentralized gaming and NFTs.
Limitations of Polygon Network
There are some drawbacks attached to the Polygon network that the core developers are working on eliminating:
- Polygon is not an independent blockchain network and it is tethered to the Ethereum blockchain for hosting it as a layer-2 solution.
- The native currency of Polygon, MATIC offers limited utility consisting of governance, security, and transaction fee functions for the protocol.
- MATIC is not used as a mode of payment like other cryptocurrencies.
Tokenomics of MATIC
The total supply of MATIC tokens is capped at 10 billion tokens. At present 8.73 billion MATIC tokens are in circulatory supply. The unit price of MATIC has remained within the 5-cent price point for the most part. The token reached an ATH of $2.92 in December 2021. However, the token is yet to cross the psychological $3.00 resistance.
Nevertheless, the project has gained considerable traction and attention on social media. MATIC is listed on all major cryptocurrency exchanges such as Coinbase, Kraken, Upbit, KuCoin, and Binance among others.
Conclusion
Ethereum has continued to face issues concerning its gas inflation on various occasions. Therefore, projects like Polygon are deemed a positive addition to the blockchain network. Polygon developers have continued to add various upgrades and introduced innovations on the platform.
