Polygon, the layer 2 blockchain of Ethereum, is widely adopted by crypto users as a way to navigate the limitations posed by Ethereum. Even though widely used, there are ongoing debates about whether Polygon is a worthy investment.
This article will explain Polygon and its use cases in detail so that you can decide for yourself if it is a good investment.
What is Polygon (MATIC)?
Polygon is a blockchain infrastructure to scale Ethereum. Polygon aims to create “Ethereum’s internet of blockchains” to navigate the problems that this protocol is facing, such as high fees, poor user experience, and low transaction throughput. At Polygon, developers can create their own Ethereum-compatible blockchains, which are customized for easy use. With Polygon, inter-blockchain interaction and technology exchange are possible.
Polygon is secured by the Proof-of-Stake consensus mechanism. It supports several blockchain scaling mechanisms, including Matic Plasma, zk Rollups, Optimistic Rollups, and Validum Chains. This layer 2 scaling infrastructure is backed by Binance and Coinbase. With the use of the Plasma framework, Polygon can achieve nearly 65000 transactions per second.
How is Polygon Different from Ethereum?
Even though Polygon is built based on Ethereum, it aims to reverse the inadequacies of the Ethereum blockchain. The table below shows the differences between Polygon and Ethereum.
| Ethereum | Polygon |
|---|---|
| Ethereum is a layer 1 blockchain. | Polygon is a layer 2 blockchain built on Ethereum. |
| Ethereum prioritizes security and decentralization. | Polygon prioritizes speed and cost reduction. |
| Ethereum has a native ecosystem backed by a community of developers. | Polygon is Ethereum Virtual Machine (EVM) compatible. |
| Transaction speed is slow, and the cost is high at peak times. | Polygon has advanced scaling solutions that use zero-knowledge (ZK) rollup to increase throughput. |
Even though there are significant differences between Ethereum and Polygon, they work together at certain points for each other’s benefit. For instance, Polygon leverages Ethereum’s security measures for its own security. Moreover, its low cost and easy scalability bring in more users to the Ethereum ecosystem.
Is Polygon (MATIC) Real or Fake?
While Polygon is a platform of immense utility to Ethereum users, the concerns about its legitimacy are bothering a section of users. These concerns arise due to several factors.
- As with any other cryptocurrency, Polygon’s MATIC token is also prone to volatility. This instability makes it vulnerable to failures. Moreover, market manipulation attempts, such as whale activities, can alter the prospects of the token.
- As Polygon is a layer 2 blockchain based on Ethereum, the chances of fluctuations in Ethereum’s market trends will also affect MATIC.
- As with any other cryptocurrency, MATIC is also vulnerable to scams, phishing attempts, and other attempts at fraud.
However, these factors do not make Polygon fake or illegitimate. Rather, it is widely recognized as a prominent sidechain of Ethereum. The consensus mechanism used by Polygon is good enough to scale transactions super fast. Unlike Ethereum, all transactions in Polygon are powered by lower transaction fees, usually lower than $0.01. Polygon is also interoperable with Ethereum and allows for unlimited scaling.
Is Polygon (MATIC) a Good Investment?
Before investing in Polygon, there are several factors that you should consider to understand the viability of your investment. While Polygon has a strong Ethereum base, it is not fully immune to volatility. Polygon’s foundation on Ethereum, its emphasis on Web3 development, and the ongoing upgrades to enhance scalability, security, and interoperability all signal the probability of bullish trends.
On the other hand, Polygon thrives in an immensely competitive market with its inherent volatility playing a major role. Moreover, its recent underperformance and the overall regulatory uncertainties vote for its bearish outlook.
While it is impossible to predict whether Polygon is a good investment or not, you can do your own research and understand the currency market conditions to foresee any problems and strategize your investments accordingly.
Final Thoughts
Polygon surely surpasses the limitations of Ethereum and adds value to the user’s interests. It is fast, secure, and cost-effective. It is interoperable with other layer 2 blockchains built on Ethereum. However, whether it is a good investment depends on the market conditions. So, you should do your own research before investing.
