Polygon Matic Review: The Pros, Cons and If To Invest?
Mike Harry
Jan 2024
6 min to read
Fact checked
Introduction: Polygon (Formerly Matic Network) was co-founded by Jaynti Kanani and Sandeep Nailwal in 2017 with the goal of making it easier for developers to build decentralized applications on Ethereum. Polygon is a Layer-2 scaling solution (sidechain) for Ethereum which provides an EVM-compatible environment with higher scalability and lower fees. Polygon gained a lot of momentum in 2021 as an EVM-compatible first mover. The billion dollar question is if Polygon can create a unique technical value propositions to create a sustainable ecosystem.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal.
What is Polygon?
The Polygon network is an Ethereum-compatible Layer-2 scaling solution that allows users to move transactions away from the main Ethereum blockchain, thereby allowing for faster transaction speeds and cheaper gas fees.
Polygon Website
Polygon does this through the use of sidechains bridging to the Ethereum mainnet. The network also allows for the creation of custom tokens and decentralized applications (dApps) and is secured by its own network of validators.
Validators are responsible for validating transactions and updating the global state of the blockchain, the number of validators currently active on Polygon is approximately 150.
Polygon's features include:
Block Finality Time: Up to 5 minutes
Low transaction fees: $0.00022
Transactions Per Second (TPS): 7,000 (Theoretical)
Validator Nodes: 87
Nakamoto Coefficient: 2
Polygon (MATIC) Token & Tokenomics
The MATIC token has seen significant growth over the past two years and is now one of the most popular cryptocurrencies on the market.
Although it is primarily used for transacting on the Polygon network, its value and utility are constantly increasing as more developers build applications on top of the polygon layer 1.
The MATIC token has a fixed supply of 10,000,000,000 MATICs that are released with an inflation rate of 6–10% per year.
A portion of the tokens are burned every time a transaction is processed on the network.
Additionally, MATIC tokens are also used to incentivize developers to build and maintain applications on the Polygon layer 1 platform.
MATIC Tokenomics:
Outstanding Supply: 8.7 billion tokens
Maximum Supply: 10 billion tokens
Current MATIC Price: $0.83
Current MATIC Fully Diluted Marketcap: $8.3 billion
Is Polygon a good investment?
While Polygon has done impressive work on the business development side by onboarding big brands like Starbucks and Nike, we are unconvinced that their technology will find an edge against its competitors in the long run.
Polygon Ecosystem dApps
Having said that, the best technology does not always win so we will be looking closely at the growth of their ecosystem across the following variables:
The MATIC token has so far fallen almost 70% from its 2022 all-time high of $2.7. In the short term (6-12 months), we think it’s unlike the MATIC token will reach those highs again.
The question then becomes if Polygon will be able to compete with other Ethereum Layer-2 scaling solutions like Starkware and Arbitrum in the medium term (2-3 years).
It will however be interesting to see if the business development progress of 2022 will translate into significant and sticky user growth. If so, that would be quite bullish for the MATIC token.
How to buy Polygon (MATIC)?
If you wish to buy MATIC, we recommend buying through Kraken and eToro as both companies are safe and FinCEN regulated. They also offer a wide range of cryptocurrencies and are beginner friendly.
After making a purchase (on any exchange), we recommend withdrawing your funds to a hardware wallet like Ledger to secure your assets from possible exchange hacks or insolvencies.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal.
Author
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
