Polygon was previously known as the Matic Network before rebranding in 2021. It is a layer-2-scaling blockchain that runs on top of the Ethereum blockchain to enhance its operation. It aims to address scaling issues with Ethereum and is also known as the Internet of Blockchains.
Polygon is emerging as one of the most popular blockchain for Web3 adoption by top brands in 2023. In 2022, Ethereum was the most popular platform for brands, as it had a 43% market share. However, Polygon has become the most popular blockchain in the first quarter of 2023, with a market share of 41%, followed by Ethereum with 34%, according to the Polygon website. Since the start of last year, 79 brands have launched NFTs on Polygon, according to NFT Tech. Decentraland has been its top driver of growth and has launched 17 digital collectibles by major brands in the first quarter of 2023.
The Matic token can offer investors diversification from traditional assets. It is a reliable long-term store of value and has a limited supply. The main appeal of Polygon or any crypto project as a form of investment is that it is an innovative digital asset.
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Scalability and Layer 2 Solutions
One of the significant issues in blockchain is scalability. Increasing network transactions adds more information to each node, leading to an overload of the system. Increasing transactions in crypto networks lead to a time-intensive process for completing transactions and also results in an increasing block size, affecting scalability. The wait time for crypto transaction validation increases during peak times and the response time is directly related to high fees, which adds to the scalability issue. Hence, blockchain networks today are not able to support the growing number of transactions and users.
The Polygon network has gained significant traction recently due to its ability to provide a cost-effective and more efficient method to transact on Ethereum. It offers many scaling solutions and empowers developers to build and deploy decentralized applications (dApps) capable of handling large transactions without compromising network security. Its proof-of-stake (PoS) system allows for cheaper and faster transactions on Ethereum. It also offers the Polygon SDK, a flexible framework for building and deploying dApps. It provides several tools that help developers build dApps with high scalability.
Growing DeFi Ecosystem on Polygon
The Polygon network offers several benefits to the DeFi sector. It can improve the scalability of DeFi protocols by increasing transaction throughput. It can also benefit DeFi with lower transaction fees and faster confirmation times.This enhanced scalability is vital for the broader adoption of DeFi, as it encourages more users to participate in the ecosystem without being put off by high transaction costs or slow speeds. Polygon also improves interoperability within the DeFi ecosystem as it enables seamless transfers of crypto data and assets between multiple chains. Interoperability fosters collaboration and innovation as developers can access existing protocols, liquidity pools, and a broader range of crypto assets. It can unlock new use cases for DeFi through cross-chain transactions.
NFT Marketplace and Virtual Assets
The popularity of NFTs, or non-fungible tokens, is growing as they provide new avenues to engage with users and generate revenue. As new NFT applications emerge, brands are creating their digital art to attract next-gen users. Polygon has emerged as one of the best platforms to buy or trade NFTs. It is a layer-2 blockchain with a scalable and robust infrastructure and offers lower transaction fees. It also boosts the transaction’s finality time to 2.1 seconds per transaction, as opposed to Ethereum’s finality time of 1 minute. It is home to many high-profile NFT projects, mainly due to its scalability solutions.
The Benefits of Investing in MATIC
Developers come together to work toward a shared vision, deploy participatory governance, and create robust communities in Web 3. A strong developer community can lead to innovative products that unlock new use cases in multiple industries. Many blockchain projects require a strong developer community. There is a need for collaboration between developers in the fragmented blockchain world for its broader adoption.
The Polygon network has managed to build a strong developer community by offering various developer-friendly services. It has launched Polygon Village to support developer communities with governance and innovative tools. It organizes a virtual hackathon known as Polygon Build It and also offers a free online learning shop that promotes a meet-up between Web3 enthusiasts and developers to explore options to build together.
Read more: What is The Benefits of Polygon (MATIC)
Strategic Partnerships and Integrations
The Polygon network has partnered with many industry leaders, from finance to fashion, to boost its adoption. It offers many NFT-based solutions and promotes the scalability of the Ethereum network. It has partnered with Starbucks to start its NFT-based loyalty program called Starbucks Odyssey. It also collaborated with brands like Adidas and Prada to support their NFT marketplace by using OpenSea to facilitate NFT sales and trades. Disney wants to invest in the NFT space and has collaborated with Polygon (MATIC) to develop its NFT offering.
Potential for Future Growth and Adoption
Polygon 2.0 will be introduced in the future to enable users from any region to build, deploy, and exchange value. It has emerged as the preferred platform for companies that want to build their Web3 solutions due to its technology, lower fees, fast speed, and sustainability goals. It has managed to secure partnerships with major brands, which will attract users to its network. Its large user base and mainstream collaborations are attracting many DeFi projects, NFTs, and blockchain gaming projects to its ecosystem. It can help scale Web3 projects toward mass adoption in the future. It will keep attracting developers due to its scaling solutions and is building a strong developer community that can result in innovative crypto products and services to disrupt traditional industries. Investors who believe in layer-2 scaling solutions are heavily backing the Polygon network to succeed and grow exponentially in the future.
Read more: Future of Polygon (MATIC)
Risk Considerations and Market Volatility
The price of crypto tokens is highly volatile; the value of tokens like the Matic token can quickly change from the highest of highs to the lowest of lows in a matter of a few hours. Many factors contribute to the crypto price fluctuation, so it is vital to monitor the market to look out for key trends. Some crypto projects are more secure than others, and newer projects could have a higher scam risk than established ones. Additionally, there is no protection in the form of insurance for lost crypto tokens. So it is crucial to do your due diligence and research the various aspects of a crypto project before investing in it.
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