Pros and Cons of Investing in Polygon (MATIC)

Is It Good to Invest in Polygon (MATIC)?

Last Updated November 16th 2022
35 Min Read

Are you willing to learn more about the pros and cons of investing in Polygon? Such vital information will push you ahead to know if it is a good idea to invest in Polygon.

Polygon (MATIC) may be one of the missing digital assets needed to make your portfolio of investments complete. In this article, we are going to take an in-depth look at why you should consider investing in Polygon, the pros and cons, and the essentials to look out for to guide your decision. 

First and foremost, Polygon (MATIC) is not your daily cryptocurrency. Instead, it offers something entirely different from mainstream cryptocurrencies used for transactional purposes and DeFi coins which power issuing blockchains and decentralized applications. 

Polygon, unlike Bitcoin, Litecoin, Dogecoin, Bitcoin Cash, and Dash that rely on their blockchains to process transactions without the need for intermediaries, Polygon is intended to streamline the relatively faster processing speed of decentralized applications on the Ethereum network.

With the innovation of Polygon which has simplified the scalability problems Ethereum has been associated with since it introduced smart contracts, is it worth investing in Polygon crypto? With the number of users on Polygon increasing due to the unique features it provides its customers, is Polygon crypto a good investment? With Polygon crypto soaring year-to-date, should you invest in Polygon crypto? Currently, one of the most trending questions about the cryptocurrency is, can Polygon reach $5? To put it simply, will Polygon (MATIC) go up?

While this presents a great opportunity for you to include the cryptocurrency in your portfolio, you must understand what Polygon is, what it does, and any pitfalls to look out for as a speculator. This is because no crypto asset has a perfect price history. 

Contents:

What Is Polygon? 

Polygon is a layer 2 scaling solution platform that is well structured and easy to use for decentralized applications running on Ethereum as well as for infrastructural development. This is a project backed by Binance and Coinbase. Polygon was founded by two experienced blockchain developers and one business consultant (Jaynti Kanani, Sandeep Naiiwal, and Anurag Arjun). The project was launched in October 2017. Polygon was earlier known as the Matic Network and formed an integral part of the Ethereum ecosystem.

Polygon effectively exists as three (3) separate but interconnected entities. 

The Polygon Network: This is used by developers of decentralized applications as leverage for relatively faster transaction speed which results in relatively lower transaction fees. The network provides instant, secure, and scalable transactions by employing sidechains. Polygon uses a decentralized network of proof-of-stake (POS) validators and optimizes for asset security based on an adapted implementation of the Plasma Framework. 

MATIC: This an ERC20 token of the Polygon Network. It serves purposes such as staking, governance, and paying for transaction fees. 

The Polygon Team: This is a decentralized team scattered all over the globe. It comprises the core team made up of the three founders and Mihailo Bjelic. Aside from them, there is an advisory board which comprises Hudson Jameson (Ethereum Foundation), Ryan Sean Adams (Bankless), Anthony Sassano (EthHub), Pete Kim (Coinbase), and John Lilic (ex ConsenSys). The team helps in the continuous development of the Polygon Network, MATIC, as well as embarking on successful partnerships with independent blockchains, and developers of existing and new decentralized applications. 

The primary purpose behind Polygon is to “Stimulate mass adoption of cryptocurrencies by resolving the problems of scalability on many blockchains.” Ordinarily, the network of Ethereum fails to scale faster. This is attributed to Vitalik Buterin and his co-founders in awe of how Bitcoin was extremely secured by Satoshi Nakamoto through the proof-of-work (POW) algorithm. Despite the high carbon emissions associated with POW in terms of mining, it is one of the best algorithms for security and has protected Ethereum since its inception in 2014

Having POW means Ethereum had to succumb to relatively lower transaction speeds which float between 15 and 30 per second. This made Ethereum’s network congested and the transaction fees associated began to go up exponentially. 

Polygon offers an alternative platform that can facilitate decentralized application transactions that are 100% instant, secure, and practically free. Moreover, Polygon’s Plasma Framework allows globally available decentralized finance applications to be created on a single foundational blockchain. 

Read Also: Why Polygon Is Going To Explode

Ready to Invest In Polygon

In the fall of the crypto boom after the pandemic made digital assets relatively cheaper, Polygon started to gain traction across crypto news and prediction portals. This is because usage of decentralized applications (DAPPS) was on the rise and their novel tokens were being purchased by traders and investors with an eye on their ability to scale faster. At the time of writing, Polygon (MATIC) is the 10th largest digital asset in the world.

Slowly but surely, many developers who patronized Ether based on millions of Ethereum users decided to integrate Polygon to help their DAPP complete transactions fairly. Currently, there are more than 1600 DAPPS on Polygon. Some of the biggest adopters of the sidechain’s solution are crypto exchange and derivatives platform, OKEx, decentralized lending Aave, decentralized exchange SushiSwap, and multi-chain yield optimizer, Beefy Finance. Additionally, non-fungible tokens and gaming platforms such as Decentraland, Neon District, Vulcan Verse, Mega Crypto Polis, Valuables by Cent, Crypto Skulls, Whale Street, Nifty Eggs, Cargo, and Sandbox among others have been integrated with Polygon. 

For many crypto analysts and experts, Polygon has the potential to make Ethereum competitive and continue to stay as the number one smart contract chain for the creation and usage of decentralized applications. Also, others believe Polygon will continue to be the scaling solution of choice for several players in the decentralized finance game. This is the primary reason why the CEO of OKEx, Jay Hao pointed out in an interview with Bitcoinist that, “Polygon is one of the most efficient full-stack scaling solutions for Ethereum, so the transactions on Polygon are fast and cheap. And Polygon has already integrated with most mainstream DeFi applications. We would love to give our customers access to all these great products and financial opportunities.”

To help you make a great decision on the digital asset, let us analyze the pros and cons of investing in Polygon (MATIC). 

As an e-learning organization, we believe in digging deep and finding credible information that is related to MATIC. If you want to know the pros and cons of MATIC so that you can move from contemplation to decide with regards to whether investing in MATIC is a good idea, you are on the right platform.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

The PROS Of Investing In Polygon (MATIC) 

What Are The Benefits Of Investing In Polygon (MATIC)? 

As per the price forecasts of several analysts based on fundamental and technical analysis, Polygon has a great future based on its network and the future of its novel token, MATIC. So, let us take a look at the pros of investing in Polygon (MATIC). 

 It Has Shown Independence from the Price Patterns of Bitcoin

Polygon trades on cryptocurrency exchanges as MATIC. Although all digital assets are collectively known as cryptocurrencies, MATIC and others are referred to as alternate coins (altcoins). What altcoins normally do is follow the price patterns of Bitcoin during bullish engulfing and bearish seasons. An example is MATIC's behaviour in the first market drop of 2021.

Fortunately, MATIC did not fall vulnerable to unfavourable news about Bitcoin in May 2021. Bitcoin ended 31st May 2021 at $37,332.85 after opening on 1st May 2021 at $57,714.66. This means that BTC shed 35.3148% of its price in the month. Several altcoins such as Ether opened at $2,772.84 on 1st May, reached an all-time high of $4,362.35 on Wednesday, 12th May before Elon Musk’s announcement of the delisting of BTC as an option of payment for TESLA took over the market. In the space of 11 days, more fuel was added to the delisting of BTC as China announced major crackdowns on the use of digital currencies.

The resultant effect was a drop in price to new high lows of $1,737.47 on Sunday, 23rd May 2021. In the process, ETH lost 60.1712%. Other altcoins such as Binance Coin (BNB) lost 43.0768%, Dogecoin (DOGE) shed 2.94%, Tronix (TRX) lost 38.4615%, and Litecoin (LTC) shed 30.6521% of their opening day prices for the month. 

MATIC and Charles Hoskinson’s Cardano (ADA) were among the few cryptocurrencies to resist the bearish outlook of the market and did not follow the plummeting paths of BTC and ETH. MATIC opened at $0.82 on 1st May 2021, and with increased investor interest shown through the trading volumes recorded soared to $1.88 after reaching an intraday high on the same on 31st May 2021. In the process, MATIC defied all the odds and returned 129.268% for investors. 

In June 2022 Bitcoin's price dropped to $19K and most of the other cryptos follow its trajectory. MATIC also dropped in price to hit the low of $0.346 but since then the price is on a uptrend trajectory which is not the case with the Bitcoin price which hit a new low of $15,682 in November.

Most analysts attributed MATIC's survival to the increased usage rates and constant growth of the network when congestion and high gas fees plagued the DeFi-dominating Ethereum blockchain. This means that Polygon has found independent and active users who continue to patronize the network which helped weather broader market sell-off.

This is the primary reason why Coin Price Forecast has predicted Polygon (MATIC) will continue to soar in 2022 and beyond. According to the analysts, Polygon (MATIC) could command a trading price of $1.11 at the end of the 2022. In the near term, the crypto prediction portal believes Polygon could have a trading price of 1.51 by the end of 2023, $1.71 (2024), and $1.73 (2025). If the DeFi boom continues in the long term, Coin Price Forecast foresees MATIC trading at average prices of $1.98 by the close of 2026, $2.34 (2027), $2.38 (2028), $2.68 (2029), $2.63 (2030), $2.82 (2031), and $3.08 (2032). 

Due to the resistance shown, Coin Price Forecast believes MATIC can survive negative news around Bitcoin in the future. With this, investing in Polygon (MATIC) now, could see you walk away with a return of at least 170%

 Polygon Scales Relatively Faster, Interoperable, and Has 100s of Partnerships 

In the fall of 2018, audit & assurance, tax, risk management, risk, and financial advisory and consulting firm, Deloitte, pointed out the five major things that must happen for blockchain to see widespread adoption. Deloitte felt blockchain could revolutionize the financial sector but had transaction speed difficulties. Aside from these, a lack of standardization also threatened to restrict its growth. The five main hurdles the consulting firm pointed out are increased performance, interoperability, reduced complexity & cost, supportive regulation, and more collaboration. 

A visit to the official website of the crypto project and it could be realized that some of the solutions Polygon aims to provide fall in line with some of the hurdles Deloitte pointed out years ago. 

Two of the solutions go, “Adaptor modules for enabling interoperability for existing blockchain and networks, and interoperability protocol for exchanging arbitrary messages with Ethereum and other blockchain networks”. In the end, Polygon helps other applications and blockchains to collaborate with its network and others in a fast scaling manner which lowers costs. Aside from this, Polygon aims to reduce the complexity of scalability as well as instant blockchain transactions. 

But how many transactions does Polygon process per second? Using a customized version of the Plasma Framework built on the proof-of-stake (POS) algorithm, Polygon achieves up to 65,536 transactions per block on each sidechain. This means Polygon processes approximately 65,000 transactions per second (TPS). This has led to several partnerships in the process. Currently, more than 1600 DAPPS were using Polygon’s infrastructure. These include DAPPS in decentralized finance, non-fungible tokens & gaming, decentralized autonomous organizations (DAO), wallets, oracles, and business-to-business technologies. 

Some of the most popular partnerships formed include but are not limited to Curve Finance, Polymarket, 1inch, Sportx, Augur, Ocean Protocol, Reef Finance, Xend Finance, StakeHound, UniLend, OpenDAO, Ren, dYdX, Band Protocol, Tellor, Chainlink, Paralink Network, DIA, the Band Protocol, and the Umbrella Network. 

The biggest news in June was the announcement of the integration of OKEx with Polygon on Wednesday, 9th June 2021. This partnership enables faster and cheaper token transfer from OKEx to the network of Polygon. Users of OKEx will now be able to easily and quickly move funds between the exchange and the Polygon Network. OKEx Polygon integration supports Maker (MKR), Compound (COMP), Chainlink (LINK), Ether (ETH), Wrapped Bitcoin (wBTC), USDK, YFI, TUSD, USDT, USDC, and ZRX among others.  

OKEx is the world’s largest Bitcoin futures exchange, has millions of users and more than 100,000 active monthly users. This partnership brings thousands if not millions closer to the Polygon network to increase its usage. Since most of the transactions on the network are settled through MATIC, the cryptocurrency will continue to see liquidity. This will reflect in trading volumes and the resultant effect will be an increase in price and market value. 

Such a partnership also confirms the credibility of Polygon and will see more financial technology (FINTECH) companies forge alliances with the side chain network. 

CoinPedia has weighed in on the future of MATIC based on successful partnerships that increase the network’s usage. According to Elena R, MATIC can command up to command the best possible prices of $1.03, $1.83 and $5.06 by the end of 2022, 2023 and 2025 respectively.

Thriving on the analysis of CoinPedia, investing in MATIC now could see you make gains of at least 2517.8% in the long term.

 Grayscale Is Exploring Investment Product for Polygon 

On Thursday, 17th June 2021, the largest digital asset management firm Grayscale announced that it has added 13 tokens to those under consideration for investment products. Most of these assets are related to decentralized finance. Among the assets listed include but are not limited to Curve (CRV), Internet Computer (ICP), Ren (REN), Universal Market Access (UMA), Ox (ZRX), Near (NEAR), Kava (KAVA), Iinch (1INCH), Solana (SOL), Bancor (BNT), Loopring (LRC), Kyber Network (KNC), and the asset of focus, Polygon (MATIC).

According to David Z. Morris of Coindesk, “Since the early days of crypto, the announcement of new companies accepting crypto payments, new exchange listings, and new major investments have been the biggest and most consistent drivers of price movement.” New major investments can befall MATIC if Grayscale decides to add the cryptocurrency to its growing list of digital asset Trusts.

All the assets currently in Grayscale’s Product Family are ZCash (ZEC), Livepeer (LPT), Filecoin (FIL), Litecoin (LTC), Stellar Lumens (XLM), Horizen (ZEN), Ethereum (ETH), Decentraland (MANA), Ethereum Classic (ETC), Bitcoin (BTC), Basic Attention Token (BAT), Chainlink (LINK), and Bitcoin Cash (BCH). They spiked in price when the digital asset management firm announced they have set up Trusts for them. 

In the future, the announcement of Grayscale Polygon (MATIC) Trust could see the cryptocurrency surpass its all-time high. Such news is music to the ears of traders and investors of MATIC. 

Digital Coin Price believes Polygon’s MATIC is a great investment in 2022 and beyond. According to the experts, MATIC could have a trading price of $1.15 by the end of 2022 and $1.66 by the close of 2023. In the long term, the forecasting portal expects MATIC to trade for a coin at the best possible prices of $2.12 by the end of 2024, $2.60 at the end of 2025, $2.77 (2026), $3.12 (2027), and $3.64 by the end of 2028. Investing in Polygon (MATIC) with an eye on the long term could see you with a return of at least 295%. 

 Has Validation from Prominent Investors and Major Players 

On the Consensus by Coindesk 2021, co-founder and chief operating officer (COO) of Polygon, Sandeep Nailwal pointed out that serial entrepreneur and investor Mark Cuban has invested an undisclosed amount in Polygon. Cryptocurrencies normally soar in price when a well-established person not only throws his or her support for a project vocally but affirms this by pouring liquidity into the project.

Mark Cuban is one of the most recognizable faces in digital investments after making Dogecoin (DOGE) the official cryptocurrency of the Dallas Mavericks in 2021. Aside from this, he has been vocal about the adoption of cryptocurrencies into the mainstream. His association with Polygon and its novel token MATIC gives the whole project mileage across the world and forces people to conduct independent research about the cryptocurrency and decide on it. 

Aside from Mark Cuban, Polygon is supported by Binance. Binance launched a Polygon Summer Giveaway for its users to share a prize pool of 15,000 MATIC. The promotion period was from Wednesday, 16th June 2021 to Monday, 21st June 2021. There were two ways users could win in this promotion by making a successful crypto purchase of at least 100 USD, EUR, or GBP using debit/credit cards (MasterCard and VISA) and depositing at least 100 USD, EUR, or GBP using Faster Payments or Single European Payments Area (SEPA). 

Binance also has a Polygon Summer Bonus. With this, users have to stake MATIC and earn up to 34.47% annual percentage yields (APY). To put it simply, you must stake your MATIC on Binance Earn via Locked Staking. Binance is the largest cryptocurrency exchange with billions of daily volumes. Binance has 13.5 million active users. All these users through such promotions and others to come in the future get an equal chance to pour more liquidity into Binance by first pouring liquidity through MATIC to see great yields at the end of the year. In the short and long term, this adds up to the daily transaction count of MATIC as well as the total MATIC stake which stands at $3,294,955,647.

Polygon has the support of the United States cryptocurrency exchange platform Coinbase. Polygon’s MATIC was enlisted on Coinbase on 8th March 2021 across all of its jurisdictions. Coinbase has 13.3 million active users from a total user base of 56 million verified users. Coinbase has added MATIC to its Coinbase Earn Program. The program is about earning crypto while learning about crypto. You answer a few questions about a cryptocurrency and its issuing authority and you get $3 worth of the digital asset.

Aside from MATIC, others on the Coinbase earn program include but are not limited to Amp (AMP), The Graph (GRT), Stellar Lumens (XLM), Compound (COMP), Skale (SKL), Universal Market Access (UMA), Band Protocol (BAND), Maker (MKR), Kyber Network (KNC), Tezos (XTZ), and Basic Attention Token (BAT). MATIC is being exposed to millions of users on Coinbase which makes it a very accessible asset. Additionally, “the learn to earn program” helps educate skeptics of the layer 2 scaling solution and the possibilities of its token. This increases activity on the asset and such demand positively affects the price and leads to high returns for traders and investors. 

Don't Miss: The Top 21 Cryptocurrencies to Buy

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

The CONS Of Investing In Polygon 

What Are The Pitfalls Of Investing In Polygon (MATIC)? 

The pros of investing in MATIC look too good for there to be negatives but there are. To better weigh the pros against the cons of investing in MATIC, let us take an in-depth look at the negatives associated with the cryptocurrency. 

❌ Momentum Will Slow Once Ethereum’s Proof-Of-Stake Is Fully Implemented

The only reason why there was a need for a layer 2 scaling solution was that users of Ethereum’s decentralized finance applications complained about the slow processing speed of the network. This led to upstarts such as Binance and Tron which earlier on ran on the Ethereum network as ERC20 tokens moved to independent blockchains that could scale relatively faster than Vitalik Buterin’s innovation.

The scalability issue emboldened Chanpeng Zhao and Justin Sun to use the Binance Smart Chain and Tron Network respectively to compete with Ethereum for the greatest share of the DeFi market. Eager to find a solution to a key area of the mass adoption of blockchain technology, Polygon won a substantial part of the market because it took Ethereum to the next level. 

Unfortunately for Polygon, Ethereum announced Ethereum 2.0 on 1st December 2020. According to the experts, the upgrade will supposedly take effect in 2022. The upgrade will move Ethereum from the proof-of-work (POW) blockchain to the proof-of-stake (POS) network that employs SHARDING. This will move Ethereum from its current state of processing 15 to 30 transactions to approximately 100,000 transactions per second (TPS). This will ultimately surpass the 65,000 transactions per second (TPS) being offered by Polygon.

Once Ethereum can scale relatively faster, existing and up-and-coming decentralized applications will trust Ethereum 2.0 to host their innovations with no network congestion and relatively higher transaction costs problems. In the long term, this will cut the number of users on Polygon in half. With time, Polygon may not have the increasing usage rates it is currently enjoying. This could affect the price of its native token, MATIC in the long term. 

❌ There Is Competition from Blockchain Technologies

There are new crypto projects that aim to provide the same features as Polygon such as Polkadot and Chainlink. Polkadot and Chainlink aim to make blockchains interoperable and offer the same scalability solution as Polygon. Charles Hoskinson’s Cardano looks forward to finally enabling smart contracts on its blockchain.

Since the project is tagged as an Ethereum Killer, there could be more innovative scaling solutions that could take a greater share of the market. Such infinite competition in an already saturated market is a factor you should look forward to making a good decision on MATIC. If Polygon relaxes and does not upgrade its innovation from time to time, its novel token may fall off the rankings and go down the pecking order.

❌ Global Crackdown on Crypto

With the current bearish outlook of the market attributed to crypto mining issues from China, strong regulation could destroy investments made in MATIC. Due to its relatively smaller price, Polygon’s novel token could become one of the hardest-hit cryptocurrencies globally.

RISK ALERT! Trading and investing in Polygon (MATIC) and other digital assets is risky. Thousands of people have cumulatively lost millions of dollars. Buy MATIC and other cryptocurrencies with the amount of money you can afford to lose.

How To Invest In Polygon (MATIC) / Where Can I Buy MATIC? 

There are several centralized and decentralized exchanges where you can invest in Polygon’s MATIC. As an e-learning organization, it is our responsibility to educate you on some of the best exchanges you can trust with the hard-earned money you are willing to risk. We would like to recommend eToro for your trading and investing activities. eToro has been in business for a long time and aside from MATIC offers up to 90 cryptocurrencies for trading.

Kindly follow the steps below and buy your first MATIC coins.

The FIRST STEP is to SIGN UP for an eToro account. You can input details of your full legal name, email & residential address, and phone number. Kindly provide the right email address and contact number as they form the first step of the verification process. 

The SECOND STEP is to verify your account. For the eradication of anti-money laundering, identity, and credit card fraud, eToro will request a government-issued card that confirms your full legal name with your signature embossed on it. More often than not, as part of Knowing Your Customer (KYC), eToro will demand a bank statement not more than 6 months old. This will help confirm proof of address. 

The THIRD STEP is to deposit funds. Through a range of payment options (MasterCard, Visa Card, PayPal, Skrill, and others), you can upload funds in the accepted forms of EURO, USD, or GBP. Without fiat currency, you cannot purchase your MATIC. 

The FOURTH STEP is to navigate to MATIC page. On this platform, you can buy several Polygon (MATIC) that meet your budget. It would be processed and added to your account.

 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Will Polygon (MATIC) Be A Millionaire Maker? 

In a sense, it already is. MATIC has a market capitalization of $8 billion and a fully diluted market capitalization of $600 million at the time of writing. This continues to rise as more users of DeFi and developers of decentralized applications (DAPPS) flock to Polygon. 

Being a finite resource, the value of MATIC is likely to increase further, as scarcity tends to increase the price of assets. Please remember, any investment includes some risk. Do extensive research on the cryptocurrency before making a final decision on it. 

Polygon (MATIC) could become a millionaire-maker in the following way. You should consider price, percentage change, and forecasted price by a credible crypto prediction portal. Experts at CoinPedia estimate MATIC could reach the best possible price of $5 by the end of 2025. At $0.92, you could purchase 30,000 MATIC and it would cost you $27,600. In the case the forecast is reached, your 30,000 MATIC multiplied by a new price of $5 would equal $150,000.

Conclusion: So, Is Polygon (MATIC) A Good Investment? 

YES! Investing in Polygon’s MATIC is one of the greatest decisions you could take according to experts predictions

You should know that most investments come down to the risk versus reward factor. You should always ask the question, do the potential rewards of investing in Polygon (MATIC) outweigh the possible consequences of the risks?

Polygon certainly has some risk factors. It may be demanded less when Ethereum 2.0 reaches full functionality mode. Additionally, its novel token MATIC is not that popular with novice or unsophisticated cryptocurrency traders and investors. What’s more, MATIC is a long way from challenging the main players in crypto such as Bitcoin (BTC) and Ether (ETH). 

Have you considered investing in Polygon (MATIC)? 

On the other hand, Polygon is becoming mainstream every day and has the backing of major players such as Coinbase and Binance. Plus, at $0.92, MATIC can be considered a low barrier of entry for novice traders and investors, as well as a great opportunity for sophisticated investors to add another digital asset with a huge potential to their portfolio of investments. 

To put it simply, MATIC is a low-risk investment that comes with lots of potential rewards. You should combine fundamental with technical analysis research that will help you make an informed decision on the asset. 

The real question therefore is, does investing in Polygon (MATIC) work? For those who bought MATIC on 1st January 2021, a return of more than 3,000% came their way by the end of the year.

Now that you know the pros and cons of investing in Polygon (MATIC), if this article has provided you insight into the digital asset and you want to start investing in MATIC, eToro provides the ability to trade with crypto assets and CFDs on up to 90 cryptocurrencies. 

eToro – Best Platform To Buy Polygon

eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.