Before You Invest: Polygon (MATIC)

Written by BTSE

January 5, 2023

Before You Invest: Polygon (MATIC)

Here’s another article from our Before You Invest series! In this series, we’ll provide you with all of the information you need to know before investing in certain cryptocurrencies.

Known as “Ethereum’s internet of blockchains,” Polygon originally launched under the name Matic Network in 2019, then rebranded in 2021. As a Layer-2 solution, its purpose is to make transactions on the Ethereum blockchain faster and cheaper, as well as connect Ethereum-compatible projects with the network. 

Even though Polygon initially encountered headwinds that made it difficult to gain traction, it managed to gain 7,000 decentralized applications on its blockchain by December 2021. By October 2022, that number was 53,000.

With this popular uptake, Polygon has also been described as the Amazon Web Services of Web3.

The Polygon network’s native token, MATIC, is a popularly traded token that can be acquired on most major exchanges, including BTSE’s exchange.


What is Polygon (MATIC) Coin?

Just as the Ethereum network has ETH, Polygon has MATIC as its utility token that also functions as a governance staking token for parties that validate transactions.

MATIC is an ERC-20 token that is used to govern and secure the Polygon network and pay for transaction fees on the Polygon network. It has a maximum supply of 10 billion tokens, in contrast to ETH’s uncapped maximum supply. As of mid-December 2022, roughly 87% of MATIC tokens were in circulation.


What can Polygon (MATIC) Do?

Since the Polygon network utilizes a modified proof-of-stake (PoS) consensus mechanism, the MATIC token has staking utility for network participants who wish to reap rewards for validating transactions. This is significant because the purpose of Polygon is to function as a scaling solution on top of Ethereum, specifically mitigating high ETH transaction fees and Ethereum’s slow processing speeds. 

Polygon goes a step further by enabling communication between Ethereum and other blockchains, as well as helping blockchain networks become compatible with Ethereum. This makes Polygon a competitor of networks such as Cosmos, Polkadot, and Avalanche.

Polygon has an average block processing time of 2.1 seconds, much shorter than Ethereum’s average range of 10 to 20 seconds. Typically, Polygon transactions carry a fee of around US$0.01, while Ethereum’s gas fees can range anywhere from US$1 to above US$196.


Who founded Polygon (MATIC)?

Polygon was founded as Matic Network in 2017 by Jaynti Kanani (CEO and senior software engineer), Sandeep Nailwal, Anurag Arjun (CPO), and Mihailo Bjelic in Mumbai, India. The four software engineers launched the network’s alpha mainnet in 2019.

Polygon’s advisors include former Ethereum Foundation member Hudson Jameson and the co-Founder of information repository EthHub, Anthony Sassano.


Polygon (MATIC)’s potential

Investing in cryptocurrencies can carry risk as the value of these assets can fluctuate rapidly and by large volumes. While there can be potential for high rewards, there is also the chance of suffering losses. We encourage all investors to conduct thorough research to identify opportunities that match their objectives and appetite for risk.

There are multiple reasons to be bullish about MATIC.

Polygon launched a subsidiary called Polygon Studios in 2021 to advance the development of Web3 games and non-fungible tokens (NFTs) on its network. With its fast processing speeds and low transaction fees, Polygon has managed to attract the interest of new Web3 projects, driving demand for MATIC tokens. For example, decentralized exchange Sushi, the Decentraland metaverse, and MakerDAO were built on Polygon.

Additionally, Polygon appears to be favored by traditional businesses. In December 2022, Polygon formed a partnership with Flipkart, the most popular e-commerce platform in India, to create a research and development center for Web3 buildout and to create new metaverse commerce use cases. And when JPMorgan sought to execute its first decentralized finance (DeFi) trade in November 2022, it used Polygon for the demonstration.

These instances and others — including NFT launches by Starbucks, Adidas, and Prada, as well as the Web3 forays of The Walt Disney Company, Reddit, and payment platform Stripe — all utilize the Polygon network, indicating institutional interest in the network and even more demand for MATIC tokens.

Meanwhile, there are some risks. Since Polygon is a solution that runs on top of Ethereum, it depends on the Ethereum network to function. That means disruptions to Ethereum may lead to MATIC losing value. A complete shutdown of Ethereum, if it were to occur, would likely make MATIC lose 100% of its worth.

Moreover, with some exceptions, MATIC is not generally used for purchases, and is instead used to fulfill transaction fees, so its utility remains limited, influencing the limits to which the token can gain value.


Where and how to buy Polygon (MATIC)?

The MATIC token is listed on the world’s top cryptocurrency exchanges, including BTSE.

Swapping for MATIC on BTSE’s exchange is an easy 5-step process:

1. Log in to your personal account on BTSE. If you do not have a BTSE account, you can register here.

2. In the “Spot” section, choose “MATIC” as one element of your trading pair.

3. Choose the other element in the trading pair — you can define the stablecoin, fiat currency, or cryptocurrency that best fits your trading strategy.

4. Select the type of order you want to place — limit or market — then enter the amount of MATIC you want to buy.

5. Click “Buy Order.”

And then you’re done! Your new MATIC token balance will be displayed in your wallet.


Final thoughts

For cryptocurrency investors who believe in the power of Layer-2 solutions, MATIC may be a meaningful addition to their portfolios. It is now consistently among the top 10 cryptocurrencies by market capitalization. Developments on the network, including use cases implemented by traditional businesses, all appear to be endorsements of Polygon, making MATIC a potentially enticing choice as an investment.


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Any data, text, or other content on this page is provided as general market information and not as investment or financial advice. Past performance is not necessarily an indicator of future results.


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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.

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