Polygon, formerly the Matic Network, was created in 2017 by Sandeep Nailwal and Jaynti Kanani as a layer-2 scaling solution for Ethereum developers.
The goal of Polygon was to ease the development of decentralized apps (DApps) on the Ethereum mainnet. To achieve this goal, it was designed to be an EVM-compatible platform with higher scalability and lower transaction fees. In 2021, Polygon became extremely popular amongst crypto developers for its scaling solutions.
How Polygon Works
Polygon is a Layer-2 scaling solution built on top of Ethereum. It enables users to move transactions from the mainnet, which leads to faster speeds and lower gas fees. The network does this via side chains that bridge to Ethereum. Users can create customized tokens and DApps secured by a network of validators. Today, there are close to 150 active validators on Polygon.
Its most notable features are low transaction fees of just $0.00022 per transaction, a theoretical Transaction per Second (TPS) speed of 65,000, and a Nakamoto Coefficient of 2. It also boasts a fast block confirmation time of just 2 seconds.
The MATIC Token
MATIC is the name of Polygon’s native token. In the past two years, the token has experienced phenomenal growth. It is currently one of the most popular tokens in the crypto market. There are 10 billion MATIC tokens with an annual inflation rate of 6-10%. Each time a transaction is processed, a portion of MATIC is burned. MATIC tokens are also incentive tokens for developers to build and maintain DApps on the network.
The Polygon (MATIC) token peaked in December 2021 at a market cap of over $19 billion. It has lost some of those gains, and its market cap is now just over $6 billion. However, in terms of overall market performance, MATIC is doing well. It is currently ranked number 13 by market cap.
[Click The $DASH Chart Above To View On CoinMarketCap]
SEC Troubles
Since the SEC began its intensified crackdown on the crypto sector following the collapse of FTX, Polygon has not escaped scrutiny. Following the launch of lawsuits against Binance and Coinbase in 2023, the SEC has claimed Polygon (MATIC) and other prominent crypto coins like Solana (SOL) and Cardano (ADA) are unregistered securities.
Following the allegations, some traders and institutional investors dumped MATIC. One of the most prominent was Revolut, a UK-based crypto-friendly. The bank announced it delisted the tokens mentioned in the SEC lawsuits due to a lack of regulatory clarity.
Following the claims made by the SEC, Polygon Labs took to Twitter to respond to the allegations. It claims that MATIC was “developed outside the U.S.” The firm also contended that MATIC was a crucial part of the Polygon platform to secure the network from day one. The Polygon Labs team also noted that MATIC’s biggest market is outside the U.S. and had never targeted the U.S. as a growth market.
Summary
While the SEC announcement impacted the Polygon (MATIC) price, the token’s performance remains stable. To date, it is one of the best-performing tokens in the crypto world, with great promise for the future.
Get Email Updates on $MATIC – Click Here To Sign Up for our ?% FREE Newsletter!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.