Polygon (MATIC) is the native cryptocurrency that powers the Polygon Network, a layer 2 platform created in 2017. Originally called the Matic Network, the Polygon Network allows developers to create and deploy their own blockchains that are compatible with the Ethereum blockchain with a single click, as well as enables other Ethereum-based projects to transfer […]
Polygon (MATIC) is the native cryptocurrency that powers the Polygon Network, a layer 2 platform created in 2017. Originally called the Matic Network, the Polygon Network allows developers to create and deploy their own blockchains that are compatible with the Ethereum blockchain with a single click, as well as enables other Ethereum-based projects to transfer data and tokens between one another using the MATIC sidechain. Think of it as a smaller blockchain that runs in parallel with the Ethereum blockchain. The price of Polygon’s token, MATIC, has skyrocketed this year.
MATIC asset price
The MATIC cryptocurrency first launched in 2019, two years after the Polygon network went live, via an “initial exchange offering” (IEO) hosted on crypto exchange Binance’s Launchpad platform. IEOs are initial coin offerings that take place on an exchange. These kinds of sales are supposed to be more trustworthy because the hosting exchange performs its own due diligence on the project prior to the sale. The initial price of MATIC was $0.00263, with a supply of 3.23 billion tokens. The sale secured the project over $5 million at the time.
MATIC’s price hit an all-time high of $2.40 in May 2021, three months after the project underwent a major rebranding from Matic Network to Polygon Network. Prior to the surge, which started in February and saw the token rise by more than 7,000% to its all-time high, MATIC had remained under $0.04 for almost two years.
The way MATIC tokens are allocated is slightly more complex than most other blockchain projects as the following applies:
- 16% of the tokens are reserved for Polygon employees.
- 4% goes to Polygon’s advisers.
- 12% is distributed to the project’s network of stakers.
- 23% goes toward supporting Matic projects.
- 21% goes to the Polygon Foundation for shepherding development of the protocol.
How does Polygon work?
Polygon lives on top of Ethereum as a layer 2 blockchain. The underlying Ethereum blockchain ultimately secures and settles transactions, but developers have been designing second layers built on top of blockchains to increase the number of transactions per second that a network can process.
In what some call an “Internet of Blockchains,” Polygon aims to bridge many different blockchain projects on Ethereum, which all boast different features, but aren’t necessarily interoperable. There are other blockchain projects trying to solve a similar problem, such as Polkadot and Cosmos. Polygon aims to improve upon these projects by being compatible with Ethereum, tapping the second-largest blockchain’s security and mature ecosystem.
Polygon uses the proof-of-stake consensus algorithm to simultaneously secure the network and create new coins over time. That is the same method used by Ethereum’s 2.0 blockchain and Cardano, and requires users to lock up tokens in order to be randomly nominated to validate new blocks of data.
All Polygon updates can be tracked via the project’s official GitHub page.
Key events and management
Based in India, Polygon was launched by Jaynti Kanani, Sandeep Nailwal and Anurag Arjun in 2017. Originally called Matic Network, they rebranded the network as Polygon in early 2021.
Polygon has several advisers who are influential in the world of Ethereum, including Ethereum Foundation alumnus Hudson Jameson and Ethereum developer resource EthHub co-founder Anthony Sassano.
Popular decentralized finance (DeFi) projects SushiSwap, Curve and Aave already use Polygon for improved scalability and speed. According to CrunchBase, investors include billionaire entrepreneur Mark Cuban and Coinbase Ventures.