Polygon was not created to compete with Ethereum, but to become its indispensable partner. It’s designed to overcome the biggest limitations of the Ethereum network – high fees and low throughput. Its native token, undergoing an evolution from MATIC to POL, is the driving force behind this extensive ecosystem. Understanding Polygon is key to evaluating one of the most important infrastructures supporting the development of decentralized applications.
Understanding cryptocurrency
The Polygon token, previously known as MATIC, and in its new version as POL, is the foundation of the entire ecosystem. Its usability is based on three key pillars. First, it is used to pay transaction fees on the network, which are many times lower than on the Ethereum main chain. Second, it is used in the staking process; token holders can lock them to help secure the network in the Proof-of-Stake mechanism and receive rewards in return. Thirdly, it gives the right to participate in management, i.e. voting on future changes in the protocol.
The project is currently undergoing a key transformation as part of its Polygon 2.0 strategy. The MATIC token is gradually being replaced by POL, which aims to become a “hyper-productive token.” Its new design will allow stakers to validate not one, but many different chains within the Polygon ecosystem with one locked capital. This means that they will be able to secure different networks simultaneously and reap rewards from each of them, significantly increasing the utility and potential profitability of the token.
This evolution aims to make the POL a central point of coordination for an entire growing universe of interconnected networks. The total supply of the token is capped at 10 billion, which introduces an element of scarcity. Combined with increasing utility, its economic model is designed to support long-term value. As a result, it is not just a speculative instrument, but a key piece of the technological puzzle, available on almost every cryptocurrency platform.
Specifics and technology
Polygon is much more than a single blockchain. It is an all-in-one platform, often referred to as the “Swiss Army knife for Ethereum scaling.” It works as a Layer 2 solution, which means it processes transactions outside of the main, often congested Ethereum chain. These transactions are completed faster and cheaper, and then grouped and saved in Ethereum as a single entry, which guarantees their ultimate security. This architecture combines the best of both worlds: Polygon’s scalability and low cost with Ethereum’s security and decentralization.
Initially, Polygon’s success was based on the Polygon PoS (Proof-of-Stake) network, which quickly became the most popular solution of its kind. However, the team’s ambitions go much further. As part of Polygon 2.0’s vision, the project is evolving into an ecosystem of interconnected networks based on zero-knowledge proof technology. The flagship product of this transformation is the Polygon zkEVM, which combines the high performance of ZK technology with full compatibility with Ethereum, making it easy for developers to port applications without any code changes. This makes it possible for any decentralized trading platform to run on Polygon with the security of Ethereum, but at a fraction of its cost. The ultimate goal is to create a seamless and scalable network where users and assets can move between different chains without any barriers.
Development and interest
Polygon’s adoption has exceeded the expectations of even the most optimistic. There are already over 53,000 decentralized applications on the network, and the number of unique addresses has exceeded 400 million. During periods of peak activity, the network was able to process more than 3 million transactions per day, many times higher than the volume on Ethereum alone. These numbers demonstrate the real demand for the solutions that Polygon offers.
Key to this success has been strategic partnerships with major global brands. It was Polygon that was chosen by companies such as:
- Meta to implement NFTs on Instagram and Facebook.
- Starbucks to launch its Web3 loyalty program called “Odyssey.”
- Disney to participate in the prestigious accelerator program.
- Reddit to create a hugely popular NFT avatar series that introduced millions of new users to the world of digital assets.
These collaborations have given the project great credibility and shown that blockchain technology can find practical applications in products used by hundreds of millions of people every day. Such a scale of operation has also attracted the attention of professional investors, and more than one pro-trading company has included Polygon in its analytical portfolio.
This has made Polygon the standard available on almost all exchanges and trading platforms, including 1cft, further increasing its liquidity and reach. This ecosystem is alive and thriving, attracting developers and capital at a rate that few competitors can match.
A lucrative investment?
Polygon’s assessment as an investment is an analysis of a project with solid fundamentals but operating in an extremely competitive environment. An undoubted advantage is the solution to the real scalability problem for the largest smart contract platform. The powerful network effect, established by thousands of applications and millions of users, creates a natural barrier to entry for competitors. Strategic partnerships with global giants not only legitimize the project, but also open the way for mass adoption. A clear vision for the development of Polygon 2.0 and a pivot towards advanced ZK technology show that the team is not resting on its laurels.
On the other hand, investing in a POL involves specific risks. The market for L2 solutions is extremely crowded, with projects such as Arbitrum and Optimism stiffly competitive. Ethereum itself is also evolving, and future upgrades such as Danksharding are designed to natively increase its scalability, which could theoretically reduce the need for external solutions. It’s also important to remember that Polygon’s success is strongly linked to Ethereum’s health and dominance. When analyzing these factors, traders using the tools offered by the 1cft trading platform need to keep a broad perspective. Professional pro-trading firm 1cft will also consider the potential risks of centralization in certain elements of the network.
A potential investor is faced with the choice of an asset with huge potential, but also significant competition. The investment in POL is a bet that Ethereum will remain the dominant force in the smart contract world, and Polygon will maintain its position as a key partner in its scaling. This is a project for investors who believe in a long-term vision and can distinguish it from short-term price fluctuations. Availability on platforms such as the 1cft cryptocurrency platform makes it easy to enter this market, but understanding the technology and dynamics of the entire ecosystem remains key.
Polygon has grown from being a simple scaling solution to becoming a comprehensive ecosystem and one of the most important projects in the entire industry. Its journey from MATIC to POL symbolizes the evolution towards a more integrated and efficient future of Web3. Ultimate success will depend on the team’s ability to execute on Polygon 2.0’s ambitious vision and maintain its technological edge in the face of increasing competition.