Polygon (MATIC) and the Ethereum Mainnet revolution - is it time to invest?

Understanding the Polygon System in the Mainnet Context

In the world of blockchain, when discussing Polygon, it is essential to understand its connection with the Ethereum mainnet first. Polygon is a (Scaling Solution) platform designed to address the limitations of the Ethereum mainnet through support for high-potential Layer 2 solutions, utilizing the digital currency MATIC for transaction validation and governance.

Unlike direct use of the Ethereum mainnet, Polygon offers new possibilities for DApp developers and users seeking better performance without sacrificing security.

MATIC Token - A Key Tool in the Polygon Ecosystem

The MATIC token is not just a coin for regular transactions but a Utility Token with multiple uses, ranging from paying gas fees within the network to participating in decentralized governance.

The allocation of MATIC is as follows: Founders 22%, Ecosystem 23%, Launchpad Sales 19%, Team 16%, Network Operations 12%, Private Sale 4%, and Advisors 4%.

Founding and Vision of the Development Team

Polygon was launched in October 2017 in India. It was the result of efforts by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and later Mihailo Bjelic joined as the fourth co-founder. The team’s clear goal was to solve high fees and congestion issues on the early Ethereum network by creating an efficient Layer 2 solution.

Global investors like Mark Cuban, a major shareholder of the Dallas Mavericks, also support this project.

Polygon’s Operational Mechanism on Mainnet

Proof of Stake Validation System

Instead of energy-intensive calculations, Polygon uses a PoS mechanism, allowing token holders to participate in validation. They can become (Validators) by making an initial stake or act as (Delegators) by bonding their MATIC to support validators.

Bridge Connectivity and Asset Transfers

To transfer funds from Ethereum mainnet to Polygon, users must go through the Proof of Stake Bridge, which acts as an asset exchange channel between the two systems. Although ETH fees are required for crossing in, once inside Polygon, transaction fees are much lower than one dollar.

Polygon Protocol and SDK

In May 2021, Polygon launched the Software Development Kit (SDK), a set of Plug and Play tools for developers. Its three main objectives are Ethereum compatibility, (Modularity), and scalability (Scalability), making Polygon a flexible framework for building blockchains compatible with the mainnet.

Highlights of Polygon in Layer 2 Competition

Polygon demonstrates both technological advancement and market acceptance, as it is a network that allows the use of MATIC with PoS, enabling users to earn annual interest by participating in validation.

Unlike other Layer 2 solutions that offer a single approach, Polygon provides a variety of options for developers, including zk-rollups, rollups, and Polygon Avail for systems requiring maximum data security. Additionally, Polygon Improvement Proposals (PIPs) give the MATIC community a voice in development.

DApp Ecosystem Powered by Polygon

On the Polygon platform, popular decentralized applications include SushiSwap (Decentralized Exchange), Curve Finance (Stablecoin Liquidity Pool), 1inch (DEX Aggregator), Aave (Yield Aggregation Protocol), and QuickSwap (Fast and Low-Cost DEX).

Strengths and Limitations of Polygon

Strengths

• Faster Speed: Uses PoS mechanism, confirming transactions in just 2.1 seconds, much faster than Proof of Work.
• Low Fees: Average transaction fee around $0.01, providing a clear advantage to users.

Limitations

• Dependent on Ethereum mainnet: If the Ethereum mainnet faces issues, Polygon will be directly affected, risking value loss.
• Limited use of MATIC: MATIC is designed mainly for governance and fees, not for everyday spending.

Comparing Polygon with Ethereum

Although Ethereum ranks second in market capitalization, both play different roles. Polygon aims to complement and improve the Ethereum mainnet, not compete with it, by adding features like enhanced security, speed, sovereignty, and better user experience.

While Ethereum is gradually transitioning to PoS, Polygon has used this mechanism from the start, making transactions faster and cheaper.

MATIC Price Analysis and Future Trends

Q4 2023 Price Forecast

• October 2023: Average $0.77, Low $0.73, High $0.81
• November 2023: Average $0.79, Low $0.76, High $0.84
• December 2023: Average $0.82, Low $0.79, High $0.87

2024 Forecast

Analysts predict that MATIC will have:

• Minimum price: $1.15
• Maximum price: $1.37
• Average price: $1.18

The market expects significant growth compared to current prices.

Should You Invest in MATIC?

Given the current market situation, the coin’s price remains highly volatile, making it unsuitable for short-term investments. However, considering fundamental factors, Polygon has good potential for long-term investors, especially those who believe in the future of Layer 2 scaling solutions.

It is crucial to follow new development updates from the team, as technology upgrades and new features could drive future price movements. From a fundamental perspective, Polygon is one of the promising coins worth monitoring long-term.