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The Polygon platform is helping to expand Ethereum’s size, security and efficiency—and that makes MATIC, Polygon’s native cryptocurrency, a compelling investment.
As cryptocurrencies move deeper into the mainstream, investors are looking for new ways to participate beyond trading virtual coins. Fast-emerging areas of the cryptoverse—including decentralized finance (DeFi), non-fungible tokens (NFTs) and the metaverse—are unlocking fresh growth opportunities. One way to gain exposure to these trends is through the Polygon blockchain. Here’s how it works and where to buy MATIC, its native cryptocurrency.
Polygon is a software platform that executes transactions more quickly and cheaply than Ethereum alone. Polygon’s proof-of-stake (PoS) architecture was designed to enhance Ethereum’s scalability and infrastructure. Polygon is a “Layer 2” chain—a blockchain built on top of Ethereum’s blockchain, which is “Layer 1.” Layer 2 solutions handle smaller transactions off the main blockchain, helping Ethereum expand in size, security, efficiency and usefulness—which in turn incentivizes developers to build their products on its ecosystem.
MATIC is Polygon’s native cryptocurrency, and it underpins the network. As of mid-May 2022, MATIC is in the 18th spot on the crypto coin chart, with over US$5 billion in market capitalization, and one coin is valued at US$0.75. MATIC racked up a whopping 13,426% gain in 2021, rising from US$0.019 to US$2.57 by year’s end, handily outperforming such crypto heavyweights as bitcoin (575%) and ether (375%).
Polygon, the company, was founded in India in 2017. Its 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 sidechain, Polygon is plugged into 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 instead of depending 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 costly and slow. The Polygon network helps developers to overcome transaction logjams on the main Ethereum blockchain. “Polygon works on top of Ethereum, enhancing scalability and throughput while still benefiting from Ethereum’s security properties,” says Shiv Madan, co-founder and CEO of Moonwalk, an NFT and Web3 platform for brands, creators and communities.
The Polygon blockchain’s speed, scalability and low fees have made it an attractive destination for DeFi app builders. Currently, there are 481 DeFi apps listed on Polygon, with total value locked of more than US$215 billion as of April 21, according to Defi Llama.
NFTs have grown in popularity, driven partly by celebrity endorsements and stratospheric prices paid for in-demand specimens—and Polygon is well positioned to benefit from this boom. Over 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 enables much cheaper transactions and minting of NFTs, which can be sold to collectors.
In December 2021, NBA icon Steph Curry released a collection of almost 3,000 NFT sneakers on the Polygon network. Polygon also powered luxury brand Dolce & Gabbana’s NFT auction last year.
Polygon recently secured a staggering US$450-million investment from venture capital firm Sequoia Capital in a major push into Web3, regarded as the future of the internet. Web3 is a blockchain-based, decentralized version of the internet focused on anonymity and taking control away from Big Tech.
“Polygon has made huge inroads within the Web3 development community, notably with the creation of Polygon Studios, a hub for brands and developers to build Web3 applications from NFTs and play-to-earn games to metaverse applications,” says Madan.
This is the largest segment where start-ups and applications are being built. By one account, Polygon’s network has amassed 7,000 dApps and over 130 million unique users. It now processes more than three million daily transactions, per a Bloomberg report.
Watch: 10 cryptocurrencies you need to know about
MATIC saw a monumental rise in value in 2021. Considering its growing role in multiple new trends and applications, the coin may be just at the beginning of a long growth runway. “Polygon and Ethereum are playing an important role in enabling Web3, NFTs, DeFi and the metaverse,” says Madan.
In 2021, brands and content creators raced to create NFTs; in 2022, we’ll likely see the next generation of NFTs designed around Web3 utilities, enabling new disruptive communities that challenge traditional methods of marketing, engagement and even commerce.
“Cryptocurrencies such as [MATIC] will be providing the critical infrastructure for making these services possible,” says Madan. Polygon, he adds, is currently the clear leader in terms of helping Ethereum to scale up by increasing transaction speed and the number of transactions per second. “From our experience, it’s a fantastic platform to build on. I’d highly recommend anyone seeking to build NFTs, Web3 or metaverse applications to explore Polygon.”
Investors can buy MATIC in Canadian dollars on CoinSmart (ticker symbol SMRT), Canada’s first fully regulated crypto platform. One of only two platforms with marketplace registration status, CoinSmart offers an easy-to-use interface, a transparent fee structure and 24/7 customer support. Its security features include two-factor authentication and offline cold storage.
Opening a CoinSmart account is straightforward, and investors can access their funds the same day they make a deposit. Sign up for an account* with the code money30 and receive CAD$30 in bitcoin when you deposit a minimum of CAD$100.
MATIC investors can pledge part of their holdings to the development of the Polygon blockchain and become transaction validators in the process. The practice, known as “staking” in crypto parlance, helps investors earn rewards, or yield, in return for authenticating transactions.
According to Defi Llama, there is a total of US$4.2 billion in total value locked (TVL) directly tied up with Polygon, as of mid-April. Learn more about staking MATIC.
From NFTs to DeFi and the metaverse, Polygon offers many plays. However, investing in digital assets carries the risk of periodic volatility, and investors should carefully consider their objectives and risk tolerance.
“Like all investments, whether crypto, stocks or bonds, there is always an inherent risk,” cautions Madan.
Be sure to weigh any potential rewards against possible losses, and only invest what you can afford to lose.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers.
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Do not use Coinsmart. Hidden fees, zero support, crazy fees and difficult to withdraw your money. and very slow.