Polygon Wows Web 3.0 Investors
Web 3.0 applications and the metaverse have slowly begun to take over the digital space; with huge companies like Facebook (Now Meta), Microsoft, Adidas and more announcing plans to enter the metaverse, all tokens and projects related to this phenomenon have been rallying.
But today, I want to share three exciting new developments that are shaping to make 2022 the year for the metaverse and new NFT projects.
One of the most popular altcoins right now exists as a sidechain on the Ethereum network. Polygon’s MATIC token has soared by more than 40% — since it has deployed more than 3,000 new projects on its network. After a recent deal worth $200 million with the Founder of Reddit, this network is likely to become the best way for app developers to enter the Web 3. Space.
Polygon Price
For the last few weeks, Polygon network’s Matic coin has been out-performing all the altcoins in the crypto sector. Polygon exists as a sidechain on the Ethereum network, deployed to fix some of the main areas of concern for the Ethereum blockchain.
The network promises users more throughput on transactions, meaning we will see more transactions be processed on the Ethereum blockchain due to Polygon’s network. The other main problem it is solving is Ethereum’s extremely high gas fees. While users have to pay over $20 on average on an Ethereum transaction, the Polygon network will bring the price down to less than a cent.
The Matic token soared in Q4, while a majority of the other tokens have remained silent. Trading at just $1.20 during Mid-October, the price of MATIC has since doubled, sitting at a healthy price of $2.50 as of December 22, 2021.
MATIC token — 3-month price chart, Source: Coinmarketcap
Why Has MATIC Suddenly Risen?
Polygon’s Matic token experienced a huge rally as it surged by over 40% from $1.79 to $2.50 on December 6. One reason simply attributes to Polygon finally receiving more mainstream recognition. Once investors became aware of Polygon’s low cost, greater efficiency and highly scalable network, the prices started rallying.
One of the methods the network has used to make Ethereum more scalable is Zero-Knowledge (ZK-rollups). This is a technology that allows Ethereum to scale, without compromising the blockchain’s decentralization and security. The most popular ZK-technology based projects (Matter Labs zkSync and StarkWare’s Starknet) have closed more than $50 million in funding rounds last month.
Polygon merged with the ZK protocol Hermez in a $250 million deal that has allowed the network to access ZK rollup capabilities. The Polygon global head of institutional capital, Dean Thomas stated that he thinks “investors are finally waking up to the fact that Polygon is essentially an index fund of Ethereum scaling solutions and the 800-pound gorilla is the zero-knowledge space.”
On December 2, Polygon’s latest tweet on a ZK rollup announcement went viral.
https://twitter.com/0xPolygon/status/1466479253935968259?s=20
Polygon stated that focusing on ZK technology & cryptography would be the best way to scale Ethereum — and involving the Ethereum founder, Vitalik Buterin in the announcement further boosted investor confidence.
3,000 Apps on Polygon
Alchemy, the blockchain development platform released a report in October, describing the rapid number of projects that are being deployed on the popular Polygon network. Not only has the Layer 2 network been growing at a fast pace, but it is also attracting a number of projects on the main network that are being created independently from the Ethereum network.
Compared to 2020, Alchemy has noticed a 61% increase in the number of apps that have been deployed on Polygon, as the official number of apps is more than 3,000. The Alchemy product manager, Mike Garland says that “Polygon is growing two times faster than Ethereum did at this point in its lifecycle.”
The report justifies this theory. Of the new apps being built on the Ethereum blockchain, only 38% are being built on both Polygon and Ethereum combined, the remaining 62% are going to be deployed exclusively on Polygon. App developers are getting the lucrative opportunity to use one of the best available blockchain networks {Ethereum}, while the Polygon sidechain makes the process cheaper and more feasible for transactions.
A sheer number of Non-fungible tokens (NFT) and gaming projects are being built on Polygon, which is why the market sentiment is extremely bullish for Polygon’s native token. Polygon has also been moving towards the Web 3.0 gaming sector; launching a $100 million fund aimed at combining technology and gaming.
However, one of the biggest projects to come out of Polygon is linking the biggest social media sites with the world of Web 3.0.
Reddit Co-Founder creates a $200 million project with Polygon
Alex Ohanian, the Co-Founder of Reddit is now looking to explore the world of blockchain technology to help web 2.0 applications like social media sites enter the world of Web 3.0. His venture capital firm, ‘Seven Seven Six’ and Polygon network have created a $200 million initiative, which is seeking to link social media and web-3 based projects. Polygon will be providing the infrastructure for this project since more and more developers have started to trust the rapidly growing network based on Ethereum’s blockchain.
Social Media has the potential to be one of the most valuable use cases that can be developed using blockchain technology, but we may be a few years away from seeing these projects become reality. However, this new investment initiative coming from the founder of a huge social media community could speed up the process.
Ohanian’s company, Seven Seven Six, made this news official via this Tweet.
https://twitter.com/sevensevensix/status/1471860062104682496
The company described the importance of choosing the right developers and infrastructure to successfully enter the Web3 space, and believe that Polygon can provide the necessary output for their ambitious project to come to fruition.
One of the Co-Founders of Polygon, Sandeep Naiwal says that the multi-million dollar fund will help in creating a version of the internet that puts consumers in control, a decentralized digital world of sorts. While many social media platforms consume a wide variety of people’s lives, Web 3 applications will bring value to the same users.
Like we are currently seeing with many NFT-based gaming projects and metaverse play-to-earn games, users can make tokens by competing. Similarly, developers and app users will have the opportunity to govern networks and make tokens by contributing to their safekeeping.
Risks
While MATIC is a user favourite and soared rapidly towards the end of 2021, it has one main problem. Many investors have been debating the possibility of Polygon’s token falling a lot in 2022. This is linked to Ethereum’s new protocol, Eth 2.0 — which is trying to solve the same problems that Matic is. If successful, a possible collapse in the price of MATIC may be imminent.
But Matic has moved away from being a network that just supports Ethereum. With the countless number of projects that are being created on Polygon alone and with multi-million deals like the one with Ohanian, MATIC could be a great investment opportunity for the long term. Currently, the MATIC token is the 14th largest cryptocurrency in the world, with a market cap of $18 billion.
