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Analysis of Polygon (MATIC)

23 June 2021| ZebPay Trade-Desk

Polygon, previously known as Matic, is a systematic, user friendly and thought through platform for scaling and developing the Ethereum infrastructure. Popularly known as ‘Ethereuem’s internet’ it is a blockchain scalability platform, which originated in India. It was created to surpass the hurdles of Etheruem’s blockchain, namely, low transactions per second (TPS), heavy fees and better user experience. Polygon ranks as the 15th largest cryptocurrency by market capitalization and rising fast in the crypto space. 

Polygon (MATIC) Snapshot (at the time of writing):

Native TokenMATIC
Market Capitalization$7,413,222,625
Current Price$1.18
24 HR Volume $2,701,325,697
All Time High/Low$2.68/$0.003012
ROI (from ICO)26567.33%
Script in Circulation     6.29 Bn MATIC
Total Supply 10.00 Bn MATIC

Polygon is a Layer 2 scaling solution developed and sponsored by Coinbase and Binance. It is eccentric both in terms of it’s technical architecture towards Layer 2 as well as its inherent support for a number of different use cases. Matic Layer 2 is an alternative to account based viable plasma. The Plasma framework aims to guarantee the security of the assets present on the main chain. On the other hand generic transactions are essentially secured by a proof-of-stake network. The side chains of Matic are EMV-enabled and with readily available deployment of smart contracts inherently making it a simple tool for developers for scaling their DApps/Protocols. They are also effective in supporting many other DeFi protocols available in the Ethereum ecosystem. The team has already made some high quality Web/Mobile browser libraries, which will help businesses to create real world end user applications at massive scale. Their value proposition also incorporates imparting better user experiences via smooth UX and a suite of helper tools. MATIC, the native token of Polygon, is an ERC-20 token running on the Ethereum blockchain. It is currently used for payment services on the network and also it acts as a settlement currency between users who operate inside the polygon ecosystem. Matic tokes are also used as transaction fees on the Polygon sidechains. 

Polygon was launched in October 2017 back then it was known as Matic Network. Before moving to its own network in 2019, the Matic Network team was a massive contributor to the Ethereum ecosystem. The Polygon team worked on executing the WalletConnect protocol, Plasma MVP and the largely used Dagger event notification engine on Ethereum. On February 9th 2021, MATIC made an announcement that they would be rebranding itself as POLYGON in an attempt to be recognized on a global level. They expanded their scope and vision, upgrading the system by bringing in the metaverse projects and integrating the Matic Plasma chain. It’s target now includes providing distinct blockchains that can exchange information and value free of cost.

Investment Analysis:

Polygon has grown very rapidly and so has the value and market cap of its native token Matic. There are various reasons behind this substantial rise of Polygon. The  growing fanfare around Polygon is because of investors’ interest in it. It includes the announcement of Polygon partnering with Infosys’s consulting wing.  The collaboration is referred to as ‘M-setu’ which will help as an open source-bridge that allows firms to cross-operate via the ethereum. Another big breakthrough for Polygon happened on May 29th when it announced  that it had completed an integration project with Google Cloud’s BigQuery with Google including them in the 1TB offering.  This is great news for BigQuery’s users since they can run queries on Polygon and have access to different blockchain related data sets on its network. Probably the biggest publicity Polygon received was when billionaire investor Mark Cuban revealed that he has invested in it and it’s visible in his company’s portfolio on their website. It acted like a catalyst and Polygon’s growth increased by many folds. 

Polygon (MATIC)Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
Price (US $)0.010.020.020.020.020.020.161.06
QoQ ROI (%)100.00%0.00%0.00%0.00%0.00%700.00%562.50%

From the table above we can see that the price of the asset has been constant until 2021. During this period, the asset was in its early stage, from launch, and hence yet to prove its utility in the crypto ecosystem. As the asset started to mature, and gain traction among investors and trades alike, it started to gain momentum, toward the latter part of 2020. This was around the time that the Matic Network rebranded itself as Polygon and incorporated a new set of goals and scope, along with significant investments into the protocol. With Coinbase and Binance the two big names of the crypto space backing it, Polygon has been on the rise since late April. With Polygon providing lower fees and faster transactions, Etheruem’s network congestion contributing to it and proof-of-stake attracting delegators it’s price would be rising further. 

Ever Since MATIC was rebranded as Polygon, It has outperformed other major tokens like BTC and ETH. The Average Prices have jumped 15% since last quarter. Surely looks like polkadot’s Strategy to compete with Ethereum. The surge in market capitalization has made Polygon rank among top 15 cryptocurrencies. Along with Price Average Volume and market cap have also climbed 13% and 12% respectively.

Market Cap. ($ bn)31/12/201831/12/201931/12/2020Present Day
BTC65.33130.45539.05593.63
%growth49.92%75.80%9.19%
ETH13.8914.1484.16219.79
%growth1.79%83.20%61.71%
BNB0.812.145.4041.58
%growth62.23%60.44%87.02%
XRP14.398.369.9828.20
%growth-72.12%16.25%64.61%
MATIC00.040.086.92
%growth100.00%58.52%98.77%

Matic token of Polygon has a circulating supply of 10Bn of which more than 23% has been released and by the end of December 2022 all the token will be in circulation. The growth of the asset’s market cap is phenomenal. It’s growth has been so much faster than the top assets like ETH and BTC and rate of growth is double. Even when compared with other young assets like BNB and XRP will lead the way for altcoins, Matic seems to be faring well. It has grown more than thrice the amount of these coins. With token being released every month it would be attracting much more market share in coming days. 

Matic token currently ranks 15th in terms of market capitalization. Which is astoundingly well for a young asset like it. But the founders want to make it the 3rd largest crypto project just behind Bitcoin and Ethereum. As seen above it has grown by a huge amount in just 2 ½ years. Compared with the top two assets the growth of Matic is simply massive plus the acceptance. And with its other altcoins siblings it’s rising fast catching up to them and just might push them down taking over their rank. 

Polygon, an Indian cryptocurrency, has spread its wings and taken off to a great flight. In the recent past it has also partnered up with various governments on blockchain based scaling projects for COVID-19 related data. Polygon’s scaling solutions have been employed by more than 400 apps, 76 million transactions and almost 790,000 unique users. It’s token $Matic is listed in various big crypto exchanges including ZebPay. And recently ZebPay is also providing more than 6% of return on its lending on our lending platform. It is involved in some of the innovative and new age creations of Crypto such as DeFi, DApps, DAO’s and NFT’s. Everyone who is crypto savvy needs to keep an eye for this asset. This can bring amazing changes to existing infrastructure and more love and popularity to altcoins. 

References:

https://coinmarketcap.com/

Disclaimer : This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.

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