MATIC is an Indian start-up project that has recently been rebranded as Polygon. It is an Ethereum token that operates to run the Polygon network, which is an Ethereum multichain scaling solution.
Beginning in 2021 at a market price of $0.02, it quickly soared to an all-time high at $2.68. At this time, trading volumes were well over $500,000,000 in a 24-hour period. This swift rise in value has brought MATIC into the top 15 cryptocurrencies by the market cap. Although MATIC’s price has recorrected to hover around the $1 mark at the time of writing this article, the trading volumes remain high.
In this article, we will dissect the reasons behind MATIC’s exponential rise to the top of the crypto market.
The function of MATIC is one of its best selling points. MATIC powers the creation of blockchains of different sizes to provide private financial and data transactions. This allows users to execute payments using cryptocurrency efficiently. Increased efficiency is beneficial in increasing liquidity which, in turn, shows that cryptocurrency is a legitimate replacement for fiat. These sentiments appeal greatly to supporters of decentralized finance (DeFi).
MATIC has also recently committed to solving problems with Ethereum Layer 2 scaling. The problem with Ethereum is high transaction fees, slow transactions, and low-quality services. Congestion leads to slow transactions, which leads to higher fees. MATIC aims to tackle these issues with its ability to create scaled blockchains.
In contrast to Bitcoin, Ethereum, and other top cryptocurrencies, MATIC is open-sourced. This means it allows developers to be creative in the way they create a stand-alone network, improve smart contracts and network security.
Creativity is an important asset when looking for a solution to a conundrum. By being open-source, MATIC can benefit from the knowledge and creativity of people from different backgrounds. An alternative and fresh point of view offered by someone who is not always ingrained in the project has been and will be useful in finding technological breakthroughs. The huge potential that comes with this project contributes to its rising popularity.
The most conspicuous problem with decentralized finance (DeFi) is efficiency. High fees and slow transaction time is the Achilles heel that weighs down the power of cryptocurrency. To cut out the biggest weakness that cryptocurrency has compared to fiat is a big step towards the legitimization of crypto. Ultimately, if it is obviously the better choice, how can there be any disputes? For this reason, many of the original supporters of MATIC are DeFi fanatics.
Ethereum network is extremely popular as it hosts the majority of DeFi projects such as UniSwap. This is used for trading coins that have not been released on ‘mainstream’ platforms such as Binance, Crypto.com, or Coinbase.
Naturally, Ethereum’s popularity means a lot of investors are affected by their network congestion. These people want to improve their experience and trading convenience, so they support projects that work on fixing these problems, and one of the most notable ones is MATIC.
The sudden rise
As a result of its strengths and the bull market, MATIC has gained traction from the beginning of the year. However, its big break comes on the 9th of February 2021. MATIC announced the plan to rebrand as Polygon to expand the brand name and be globally recognized. In the same announcement, MATIC reveals an upgrade in the form of metaverse projects and integrated Matic Plasma Chain. These changes enable scaling solutions for DeFi projects and NFTs – which is another growing sensation in the market.
Another reason for this sudden rise is the recent momentous collaboration between MATIC and Google’s cloud: Big Query. In this collaboration, access to MATIC’s platform is included in Big Query’s 1TB offer. This collaboration has definitely given the company more exposure and accessibility to the general public. Moreover, logically, if one of the biggest corporations in the world, such as Google, endorses it, there must surely be some potential.
Not only does MATIC provide a service with high demand, but they also hinted at having more projects lined up. The utility and potential are a big selling factor for investors looking to benefit from capital gains. Therefore, the hype is not attributed solely to DeFi advocates but also to investors and traders looking to benefit from market sentiments.
Mark Cuban, a billionaire investor who is also a big endorser of cryptocurrency, also contributed to the hype. He claims that MATIC is ‘destroying everybody else’ in their work with blockchain creation. In the crypto world, Cuban’s influence comes just behind the notorious Elon Musk. After the publication of this quote, MATIC sees an increase in users to nearly 100,000.
At the moment, MATIC coin owners consist of DeFi advocates, long-term investors, and opportunistic traders trying to take advantage of the inflating price. The snowball effect from a project launch has led to tens of thousands of investors putting money into MATIC, ultimately contributing to the hype around it.
What’s next for MATIC
With the bubble being popped following a price correction, what’s next for MATIC?
Until the launch of a new project or some tangible changes to gas fees, MATIC prices are not expected to rise exponentially.
The combination of the recent price correction and market sentiment would suggest this is a good time to enter and take advantage of the discount. MATIC is now seen as a long-term investment with a lot of potentials which makes it a good option for ‘HODLers.’