What is Polygon?
Polygon is a software platform that executes transactions faster and cheaper than Ethereum alone. Polygon’s proof-of-stake (PoS) architecture is designed to improve Ethereum’s scalability and infrastructure. Polygon is a “Layer 2” chain – a blockchain built on top of the Ethereum blockchain, which is “Layer 1”. Layer 2 solutions process smaller transactions outside the main blockchain, allowing Ethereum to grow in size, security, efficiency and usability, which in turn encourages developers to build their products on its ecosystem.
What is MATIC?
MATIC is Polygon’s native cryptocurrency and supports the network. As of mid-May 2022, MATIC ranks 18th on the cryptocurrency chart, with over US$5 billion in market cap, and one coin is valued at US$0.75. MATIC posted a whopping 13.426% gain in 2021, rising from US$0.019 to US$2.57 by the end of the year, handily outperforming crypto heavyweights like bitcoin (575%) and ether (375%).
The company Polygon was founded in 2017 in India. The co-founders include entrepreneurs Jaynti Kanani, Sandeep Nailwal and Anurag Arjun and engineer Mihailo Bjelic. Polygon counts billionaire entrepreneur Mark Cuban and renowned serial entrepreneur and angel investor Balaji Srinivasan among its key investors.
As an Ethereum side chain, Polygon is connected to a host of decentralized applications (dApps), ranging from NFTs and DeFi to smart contracts and the metaverse. DApps are applications that run on a blockchain network of computers rather than relying on just one computer.
In the world of blockchain, Ethereum has been the go-to ecosystem for developers looking to launch dApps; however, high demand has made the network expensive and slow. The Polygon network helps developers overcome transaction log jams on the main Ethereum blockchain. “Polygon works on top of Ethereum, improving scalability and throughput while still taking advantage of Ethereum’s security features,” said Shiv Madan, co-founder and CEO of Moonwalk, an NFT and Web3 platform for brands, creators and communities.
Polygon and DeFi, NFTs and Web3
The speed, scalability, and low cost of the Polygon blockchain have made it an attractive destination for DeFi app builders. Currently, there are 481 DeFi apps listed on Polygon, with a total value of more than US$215 billion as of April 21, according to Defi Llama.
NFTs have grown in popularity, in part thanks to celebrity endorsement and stratospheric prices paid for in-demand ones – and Polygon is well positioned to capitalize on this boom. More than 400 NFT projects have been built on Polygon, including offerings from heavyweights such as Adidas, Prada, Decentraland, Draft Kings and Crypto Punks 2. This number is expected to rise. Polygon allows much cheaper trades and the minting of NFTs, which can be sold to collectors.
In December 2021, NBA icon Steph Curry released a collection of nearly 3,000 NFT sneakers on the Polygon network. Polygon was also the driving force behind the NFT auction of the luxury brand Dolce & Gabbana last year.
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