The first half of 2021 has been an exciting time in the world of cryptocurrency, with new projects pushing the boundaries of blockchain’s capabilities and some seriously impressive price runs for top-tier tokens like Bitcoin and Ethereum.
However, as the cryptocurrency sector continues to go from strength to strength, certain challenges continue to reappear - namely, those to do with high usage fees and a lack of scalability amongst the major tokens.
Polygon was set up to address such issues. The Ethereum-based project seeks to effectively join the dots between other projects on the network, creating a framework that will allow developers to easily create new blockchains that will be able to integrate with existing Ethereum ecosystems.
MATIC Overview
Cryptocurrency
Polygon
Ticker Symbol
MATIC
Rank
8
Price
$1.09
Price Change 24h
4.02%
Price Change 7d
-5.04%
Market cap
$9,866,669,490.60
Circulating Supply
9,080,469,069.285
Trading Volume
$341,028,893.65
Effectively, Polygon seeks to fix the Ethereum scalability by ‘offloading’ some of the work from the base layer to additional layers linked to its protocol, thus taking the load of the main network. Consider that Ethereum is capable of processing around 2.5 transactions per second. Layer 2 scaling facilitated by Polygon could potentially allow thousands of transactions to be completed in the same amount of time.
Given the growing popularity of DeFi, it would appear that there is the need for scalability solutions and Polygon has certainly generated a lot of interest, but does it present a good investment opportunity? In the following guide, we’ll consider the project’s potential over the next five to ten years.
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Contents:
- What Is Polygon?
- Ethereum 2.0
- What Is MATIC?
- Looking at Polygon’s Price History
- Polygon Price Predictions for 2025
- Polygon Price Predictions for 2030
- Conclusion: Should You Invest in Polygon?
- Where to Invest in Polygon
- FAQs
What Is Polygon?
Ethereum has been dogged by numerous issues since its inception - one of which has been severe network congestion. Polygon was set up to solve these issues.
The first major issues for Ethereum occurred during the famous crypto bubble of 2017 when traffic on the network surged and caused a significant slowdown. The problem reared its head again towards the end of 2020 when the surging popularity of DeFi and yield farming more or less bought the Ethereum blockchain to a standstill.
To solve this problem, Indian developers Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic joined forces to come up with Matic Networks - as Polygon was originally known - in 2017. The idea was to build what they termed ‘Ethereum's Internet of Blockchains'. The project quickly gained support and the team soon rebranded it as Polygon.
Effectively, Polygon is a multi-chain platform that gives Ethereum projects room to grow. Whilst there are other layer-2 solutions already implemented on Ethereum, such as Validium Chains and zk Rollups, what Polygon does is effectively offer an infrastructure that can link them all together. In this sense, it can be seen as a kind of layer-2 aggregator.
The inner workings of Polygon are highly complex and far beyond the scope of this article, but suffice to say the project offers developers the chance to build protocols that make use of Ethereum’s security but will not be hamstrung by processing slow down and soaring usage costs.
Read Also: Why Polygon Is Going To Explode
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Ethereum 2.0
Any Ethereum enthusiasts might already be wondering why a scaling solution will be needed once Ethereum completes its much-hyped infrastructure upgrade.
The answer is simple: scalability. Whilst Ethereum 2.0 may well boost the platform’s block creation time and go some way to lowering fees, the emergence of DeFi means that Ethereum users could grow exponentially - which will eventually slowdown Ethereum once again, regardless of its upgrade.
Polygon is a long term solution that will effectively prevent this from happening. Whereas the sharding technique will massively improve Ethereum’s speed, it’s plausible that the network will eventually be called upon to process hundreds of thousands - even millions - of transactions per second. And this is why it will still require layer 2 solutions.
So What Is MATIC?
MATIC is the utility token used on the Polygon network. It effectively has three uses. Firstly, it is used as part of the proof-of-stake mechanism for use in side chains on the network.
It also facilitates a separate staking mechanism for projects that improve the Polygon ecosystem. This is effectively a way to incentivise developers to create dApps needed to enhance the network. This mechanism is funded by reserving a percentage of the Polygon transaction fees in-protocol which can then be paid out to developers contributing to the Polygon infrastructure.
Finally, MATIC is can also be used to pay fees on the Polygon network.
When it comes to tokenomics, there are currently around 7.3 billion MATIC tokens in circulation, with more released on a month-by-month basis. The total supply is capped at 10 billion.
Check Out: What Top 10 DeFi Cryptocurrencies To Invest In
Looking at Polygon’s Price History
Polygon’s MATIC barely made an impact when it was first listed across major exchanges. In fact, the token was valued at less than a cent for its first few months of trading and remained below $0.02 until January of 2021, where it was swept up in the market-wide upswing.
Since then, however, MATIC has garnered a huge amount of attention - which has been reflected in some impressive price movement. By March, the token was trading at $0.41 - which marked a price increase of over 3300%. Interest in what the project could do for the Ethereum project began to grow and it wasn’t long before MATIC was on the move again…
May saw Polygon reach an all-time high of $2.62 - which might not sound like a huge number, but considering it started the year trading at around $0.01, most investors would agree that MATIC had yielded some pretty impressive returns.
Since May, the crypto market has cooled somewhat and MATIC’s value has dropped to $1.11. However, declining prices have been seen by most leading tokens and it seems that Polygon is a long way away from sinking back to its pre-2021 price. In September MATIC climbed to $1.7 and three months later the coin reached its current all-time high of $2.92 on December 27th 2021.
What’s Next: Polygon Price Predictions for 2025
So, Polygon certainly has a great deal of potential but as we have seen, this doesn’t always equate to being a good investment opportunity. To get an idea of what’s expected of MATIC’s value, we need to turn to a few leading crypto analysts.
For example, looking ahead to 2025, DigitalCoinPrice has Polygon going from strength to strength. It predicts that MATIC will trade around $3.40 in early 2022 and continue to gain ground over the next couple of years. By 2025, the platform expects Polygon to be worth upwards of $5.91 before price growth cools slightly at the end of the year.
Elsewhere, WalletInvestor is also bullish. According to its technical analysis, Polygon MATIC could reach as high as $4.59 by the end of 2022. The upward trajectory is then expected to continue in the coming years, with Polygon reaching the $5 mark in the first months of 2023 and then closing in on $7 a couple of years later until MATIC finished 2025 trading around the $10 mark.
Of course, these predictions are highly subjective and should not be used as the sole motivation for investment in Polygon, however, they certainly paint a positive picture of what we can expect in the coming years.
Looking Further Ahead: Polygon Price Predictions for 2030
If we think about just how much has happened in the world of blockchain over the last year or so, with the emergence of NFTs and the surging popularity of DeFi, it should be fairly obvious that long term crypto price predictions are hugely speculative and cannot be considered as any more than guesswork.
However, they are a good way of building an idea of current market sentiment. For example, DigitalCoinPrice appears to be confident that MATIC will continue to grow well beyond 2025. It has the token comfortably exceeding $7 throughout 2026 before going past $9 in 2028. In theory, by 2030 Polygon could well be trading at over $12 per token.
Meanwhile, Coin Price Forecast, has put forward a very bullish Polygon price prediction for 2030. According to its technical analysis, MATIC will actually break the $20 mark in 2026 before continuing its upward trend, seeing growth of some 1,208% by 2030 and trading at approximately $31.24 per token.
A cryptocurrency research firm by the name of Crypto Research Report is calling for Polygon (MATIC) to reach $5 by 2025, and $12 by 2030.
Once again, whilst these price predictions are fairly believable, they should not be the basis for any investment strategy.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Conclusion: Should You Invest in Polygon?
Polygon was developed to solve a problem inherent within the Ethereum blockchain. As such, there can be little argument that the project has genuine value and a real-world use case. Ethereum is the top smart chain in existence and even with its 2.0 upgrade and Polygon fulfils a very valuable role within that ecosystem.
Projects like Polygon, if successful, could be implemented long term and effectively become a necessary symbiont for platforms like Ethereum and Cardano. As such, they have some pretty serious potential for the future.
Whilst no one can say for sure which of the new breed of scalability projects will corner the market, therein lies a degree of opportunity - investing now may involve more risk than investing in five years time, but the potential rewards are impressive, to say the least.
If Polygon really can deliver on its promises, then MATIC could end up being in very high demand - which in turn will see its value increase.
So should you invest in Polygon in 2022? We think it could be a worthwhile addition to any portfolio - just so long as investors remember this is a fairly new technology and, whilst the early signs are promising, it has yet to be tested in the long term.
Don't Miss: Pros and Cons of Investing in Polygon MATIC
Where to Invest in Polygon
If you want to invest in Polygon then you’ll need to find an exchange that lists its native token, MATIC. Being a relatively new project, the token isn’t as freely available as some of the more established names out there. Fortunately, one of the highest-rated exchanges on the market - eToro - has recently added MATIC to its books.
We often recommend eToro as it has an excellent reputation for providing a user-focused trading experience. In addition to its powerful trading platform, you’ll also find plenty of educational resources to help you keep up to date with all the news from the world of blockchain investment.
Opening an account is simple and once you are verified you’ll be able to launch the trading window and start adding Polygon to your portfolio.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
What is Polygon?
Polygon is a powerful scalability solution designed to run on the Ethereum blockchain. By providing an innovative, multi-layered infrastructure, Polygon seeks to offer developers a way to build their projects on Ethereum without having to worry about soaring GAS fees or network congestion.
How much will Polygon be worth in 2025?
Polygon has seen some fairly impressive price growth in 2021 and most crypto analysts are expecting this to continue over the next few years. For example, WalletInvestor predicts that MATIC will be worth more than $10 by the end of 2025.
Will Polygon improve Ethereum?
Polygon was designed to solve many of Ethereum’s scalability issues. Whilst the platform has not yet been tested to the full extent required, it is certainly promising and many of the top DeFi projects are looking to work with the project to improve their performance on the Ethereum blockchain.
Is now a good time to invest in Polygon?
No one can really say when is the best time to invest in a particular cryptocurrency. The reality is that Polygon is having a much better time in 2021 than it did in 2020. However, most analysts are predicting growth for MATIC so it’s possible that we are currently seeing a lull in price. If you do decide to add Polygon to your portfolio, just be sure to keep an eye on its adoption and usage and be ready to adjust your strategy accordingly.
What are Polygon price predictions for 2030?
Most crypto investors know better than to put too much faith in long term price predictions. However, they do have some value as an indicator of current market sentiment. DigitalCoinPrice, for example, sees MATIC closing in on the $5 mark by 2030.
What is MATIC used for?
MATIC is the utility token used on the Polygon network. It essentially has three use cases: firstly, it is used as for staking on the consensus protocol. Secondly, it is used as a reward for developers working on the Polygon infrastructure and thirdly it can also be used to pay fees on the network.