Recently, Matic Network, rebranded to Polygon — Ethereum’s Internet of Blockchains. MATIC has been in crypto FOMO over the past few weeks, due to the price hike of 3,000% since the beginning of 2021, to a ATH of $0.8933 USD, showing great potential. I always advice people to buy the project, and not the hype, apart from DOGE of course, mainly as a prediction of $1 will likely be a sure thing. But what is MATIC, and why is it gaining sudden popularity? I converted my ADA to MATIC recently due to the fundamentals of it, (I will of course buy back ADA from the profits I make from MATIC as I believe Cardano to be the Google of Blockchains in the future).
Due to the increasing popularity of the Ethereum network, the congestion and gas fees on the network is causing a lot of negativity. I still believe that it will be hard to push ETH down from its #2 position, and the recent price growth to U$ 3,000+ proves this. It has progressed far too deep, gaining required network effect for it to be driven back. In the eyes of a new retail investor, Crypto is just 4 coins, Bitcoin, Ethereum, Doge and XRP. This is why Polygon will prove to be popular, as it is a layer-2 network developed to add additional scalability to Ethereum, and improve interoperability between its blockchains. This new sidechain solution also strives to solve some of Ethereum’s major drawbacks, including poor user experience (delayed transactions), insufficient throughput, and lack of community governance.
Understanding Layer 2
Let me take a non-tech approach of layer 2 protocol here. Think of it as a secondary framework, where blockchain transactions and processes can take place independently of the layer 1 (main chain), in this case Ethereum. One of the main advantages of using layer 2 solutions is that the main chain doesn’t need to go through any structural change because the second layer is added as an extra layer. As such, layer 2 solutions have the potential to achieve high throughput without sacrificing network security. This enables a significant portion of the work that would be performed by the main chain moving to the second layer which can perform a higher number of transactions per second at a lower cost.
What Makes Polygon Special ? (getting slightly technical here)
From what I have researched, Polygon is one of the most innovative projects aiming to improve blockchain scaling and interoperability. There are several major features that have contributed to the platform’s popularity.
- Polygon is compatible with Ethereum Virtual Machine (EVM), which makes it useful for those who develop apps on Ethereum and programs in Solidity
- Polygon’s security model is optional. Therefore, there is no need to sacrifice flexibility for the sake of additional security
- Polygon claims to be flexible enough to incorporate different scalability solutions beyond Plasma chains, including Optimistic rollups and ZK-rollups*. If this sounds too technical, just think speed. The solution will be even applicable when Eth 2.0 is launched. Check out the video in the references below if you would like to understand it deeper.
Polygon shows great potential to move forward over the upcoming weeks, and may be upgraded to my HODL portfolio. The recent news of Egypt implementing a mandatory Advance Cargo Information system by July 2021 will further add to the credibility and scalability of this. Egypt being a leading global port with billions of container throughput, all the documents required will be transacted through the Polygon network. Many Crypto analysts predict a target of $5; a very conservative prediction, as blockchain projects implemented in logistics thus far have proven to be very successful. Just take a look at the price of Elrond (EGLD).
WIth Ethereum’s survival being challenged by the rise of competition from blockchains such as Soluna, Cardano and Polkadot, Polygon Network is primed to fill in the role of a viable and scalable solution, that could potentially propel Ethereum and itself into wider adoption.
References:
*Ethereum Layer 2 Scaling | Plasma vs ZK Rollups vs Optimistic Rollups – video by Blockchained Future
