Polygon
00.00 | Instrument:POLYGON |
What is Polygon?
Polygon is an Ethereum sidechain that enables the development of scalable, user-friendly decentralized applications with low transaction fees. A sidechain is a secondary blockchain that connects to a primary blockchain to make it better and more efficient. Polygon was initially founded in 2017 as Matic Network by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. The project rebranded as Polygon in 2021. The project’s stated mission is to enable a multi-chain Ethereum ecosystem, and the network has even been referred to as ‘Ethereum’s internet of blockchains.’ The native cryptocurrency used in the Polygon network is MATIC. MATIC is used to pay transaction charges, for staking, and for governance. By governance, this means that MATIC holders have voting rights on the future of the Polygon platform.
Ethereum is one of the most important and successful cryptocurrencies. But it has also been a victim of its own success. Its network’s high congestion has made it slow and very expensive in terms of transaction charges. Polygon helps to solve these issues for Ethereum, allowing for faster and cheaper transactions without compromising on security. Polygon uses a proof of stake (PoS) consensus model, where validators receive rewards for verifying transactions. Polygon’s block processing average time is 2.1 seconds, with typical fees of about $0.01. The platform boasts a high throughput of 65,000 transactions per second. Polygon’s main functionality is to support the development of custom blockchains and different types of scalable decentralized applications, as well as to enable communication between Ethereum and other blockchains. In recent months, the platform has attracted developers of NFTs and decentralized games due to its fees and Ethereum-friendly features. While other platform tokens are usually referred to as potential ‘Ethereum killers,’ Polygon aims to make Ethereum better as a development network, improving its security, sovereignty, modularity, as well as user and developer experience. Polygon has been backed by notable individuals and companies such as Vitalik Buterin (Ethereum founder), Mark Cuban, Binance, Coinbase, and Softbank.
What are the advantages of Trading Polygon?
AvaTrade allows traders to trade a wide range of crypto CFDs including MATIC. When you trade cryptocurrencies as a CFD, you only trade its price changes and do not own the underlying coins or tokens.
Here is why you should trade crypto CFDs:
- Safety and Security
Crypto CFDs do not require a secured wallet to be stored because traders do not take ownership of the underlying coins. There is no risk of hacking or other technology mishaps. Additionally, global CFD brokers such as AvaTrade are under tight regulatory scrutiny in many jurisdictions to ensure that investors are well protected.
- Go Long or Go Short
CFD trading is literally a contract between a broker and a trader to exchange the difference in value when the price of an underlying asset changes. When a trader makes a correct prediction, the broker pays them in form of profits; and when a wrong prediction is made, the trader pays the broker in the form of investment losses. Therefore, traders can speculate by going long or going short depending on the market conditions, without any restrictions at all.
- Leveraged Trading
Leverage is a facility that helps investors increase their exposure in their desired market. When trading crypto CFDs on leverage, investors only place a small amount down and get to control much larger position sizes in the market. This can maximize returns, but it can also magnify losses. CFDs are leveraged products and they can help crypto investors maximize their returns in this lucrative market.
- Flexibility
The nature of CFDs allows investors to trade their favourite cryptocurrencies with maximum flexibility. When trading Crypto CFDs, traders can minimize trading costs, implement extreme short-term strategies such as scalping and day trading with ease, utilize conditional orders such as stop loss and take profit, as well as hedge their trades.
What Influences the MATIC Price?
MATIC started with an ICO price of $0.0026, and for many months it traded below $0.05. The coin however exploded in 2021 and went on to print its all-time high just below $3. It has since retreated from those heights and currently trades around $1.20.
Here are some of the factors that influence the Polygon crypto price:
- Ethereum
Polygon and Ethereum are joined at the hip. When the price of Ethereum rises, fees on its platform also increase, and this makes it attractive to use Polygon. Thus, the Polygon price follows that of Ethereum. But investors are usually concerned about the launch of Ethereum 2.0, a protocol that will make Ethereum cheaper, faster, and more efficient. The worry is that a better Ethereum may make Polygon (and consequently MATIC) unattractive. But as a sidechain blockchain, Polygon can still make Ethereum even better.
- Use Cases
Polygon has processed transactions worth over $1.5 billion and currently hosts over 7000 projects. Its use case will continue to determine the appeal of MATIC. In 2021, Polygon launched Polygon Studios, a subsidiary that focuses on NFTs and decentralized gaming. These are trending niches in the crypto world, and Polygon is well placed to be a leading tech provider in both industries.
- Coin Supply
MATIC was designed with a maximum supply of 10 billion coins. Over 7 billion coins are already in circulation. In January 2022, Polygon implemented a major upgrade that made MATIC deflationary by burning some of the coins during mining. Already, 650,000 coins have been burned. This maximum supply can continually make MATIC scarce.
Polygon Trading
Polygon has become a top 20 cryptocurrency as of April 2022, and it offers interesting opportunities. Open an AvaTrade trading account and learn about Polygon (MATIC) as well as other cryptocurrencies. You can then trade the Polygon crypto to the USD and many other pairs. You can also gain direct access to the AvaTrade education center which offers relevant resources as well as daily analysis reports to help you track the opportunities in the financial and digital markets. AvaTrade is an internationally regulated broker that features advanced trading platforms, exclusive trading resources, as well as attractive trading conditions across all asset classes.
