Polygon (MATIC) fundamental analysis and price prediction 2021-2025

Polygon (MATIC) fundamental analysis and price prediction 2021-2025

By CryptoSorted | CryptoSorted | 13 Jun 2021


Ethereum's network limitations of high congestion, slow transactions, and expensive gas fees are household knowledge within the blockchain and cryptocurrency community.

This situation has given birth to the so-called "Ethereum killers" or alternative chains which are supposed to solve the above-mentioned problems and bring about the much-desired mass adoption

However, very few have come close to matching Ethereum level of decentralization and security while attempting to create a fast and cheap chain.

One such project with a reasonable degree of success in this direction is Polygon -formerly known as Matic Network.

 

What is Polygon (MATIC)?

Formerly known as Matic Network, Polygon is an Ethereum layer 2 scaling solution that provides the framework for building and connecting Ethereum-compatible blockchain networks.

Polygon (MATCI) calls itself "Ethereum's internet of blockchains" as it builds a multi-chain ecosystem that combines the best of Ethereum with other compatible chains.

Enabling them to enjoy the security and network effect of Ethereum while avoiding all the known problems of slow speeds and high gas fees.

Polygon uses a POS (proof of stake) algorithm that helps it scale up to a maximum of 7000 transactions per second (TPS) with 2-second block confirmation times and a $0.00004 average transaction fee.

Making it one of the fastest and cheapest chains while still maintaining Ethereum-level security and decentralization.

 

Polygon (MATIC) fast facts

  • Polygon (MATIC) is a network of independent blockchains connected to Ethereum.

  • Polygon (MATIC) can process up to a maximum of 7,000 transactions per second.

  • The project was formerly called Matic Network but was rebranded to Polygon in February 2021.

  • Currently, about 200 different dApps are plugged into Polygon, providing their uses with faster and cheaper transactions with the security and decentralization of Ethereum.

  • Year-to-date (YTD) Polygone native token - MATIC- has appreciated by over 6000%+ and most of that growth came with the 2021 bull run.

  • The polygon bridge makes it easy, safe, and fast to move funds across chains.

  • Polygon is an open-source project that's being built and developed by a decentralized team of contributors.

 

Project team

Polygon was co-founded in 2017 as Matic Network by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic.

According to data from CoinGecko, there're currently 31 contributors to the Polygon network development.

Other members of the team are a team of 5 advisory board members which includes:

  • Judson Jameson (Ethereum Foundation),

  • Ryan Sean Adams (Bankless),

  • Pete Kim (Coinbase) among others,

  • Anthony Sassano (EthHub), and

  • John Lilic (ex ConsenSys).

Click here for the current list of the project's core team members.

 

Polygone core features

Polygon combines the best of Ethereum and the connected sovereign blockchains to create a rich blockchain ecosystem that can scale for mass adoption.

Some of the most prominent features of Polygon include but certainly not limited to:

  • Ethereum compatible

  • Highly scalable

  • Highly secure

  • Sovereign blockchains

  • Interoperable

  • Excellent user and developer experience

  • Flexible and customizable frameworks

 

1. Compatible with Ethereum

As an Etheruem layer solution, Polygon is 100% compatible with Ethereum.

That means that any exiting project or dApp on Ethereum can be easily and quickly ported to Polygon in just one click without requiring further development work.

 

2. Highly scalable

Each blockchain on Polygon runs on its own sidechain which prevents any possible problem of network congestion and clogging.

Each dApp on Polygon runs on its own dedicated blockchain and scalable consensus algorithm.

 

3. Highly secure

Polygon is secure by a modular ''security as a service'' provided by Ethereum or by a pool of professional validators on the network.

The network enjoys the same level of decentralization and security as Ethereum.

 

4. The sovereignty of connected blockchains

Each blockchain or dApp on Polygon runs on its own dedicated resources, fully customizable tech stack, and sovereign governance.

Thus functioning independently of other blockchains and dApps on the network. The activity one chain does not in any way interfere with the operations of any other member chain of the network.

 

5. Interoperable

The Polygon network natively supports the transmission and broadcasting of messages and transactions between chains.

Moreso, there are bridges between Polygon and external blockchain networks to facilitate cross-chain funds transfer.

 

6. Excellent user and developer experience

The user experience on Polygon in terms of transaction cost and speed is comparable to what's obtainable on traditional web2.0 platforms.

More so, building Polygon for developers is exactly the same as building on Ethereum.

There's zero protocol level knowledge required, no token deposits, fees or permissions. Everything that works on Ethereum works perfectly fine and exactly the same on Polygon.

 

7. Flexible and customizable frameworks

There are several community-built, easily customizable frameworks developers can work on to create their own projects and get them into the market in no time.

 

The Polygon community

With over 200 projects running on Polygon and tens of thousands of community members and social media followers, Polygon has an active and highly effective community to back its continued progress.

Polygon Twitter followership is about half a million with over 50,000 Telegram group members, 17,000 Discord and 13k+ Redditors actively follow and support the project.

The value of the token is mostly based on the number of users on the network which is where a large community plays an important role.

 

Polygon (MATIC) token

MATIC is the native cryptocurrency of the Polygon network.

The token is used to pay for transaction fees on Polygon as well as reward validators who secure the network by staking their MATIC tokens.

MATIC has a maximum supply of 10 billion (10,000,000,000) tokens of which about 6.3 billion (63%) is currently in circulation.

 

MATIC use cases

The main and current use cases of the MATIC token are:

  • MATIC is used to pay for transaction fees on Polygon

  • MATIC is used for staking to earn rewards

 

Polygon (MATIC) price prediction 2021-2025

between April and June 2021, the MATIC token price has moved from $0.4 to its all-time high (ATH) of $2.62. A hefty 555% return on investment (ROI) in just about 3 months -thanks to the bull run.

However, the token has retraced along with the market to its current price of $1.3.

Is this a good price to buy the token? Let's find out below.

 

Polygon (MATIC) price prediction 2021

The market cap (MC)/TVL (total value locked) ratio is usually used to determine how undervalued or overvalued a token price is.

The closer the MC/TVL ratio is to 0 the more undervalued the underlying asset. And the higher above 1 the MC/TVL ratio the more overvalued it's considered to be.

Currently, the MC/TVL ratio of MATIC is 0.89.

This to me means that the token is very close to its fair and rational market valuation (but we both know the crypto market is not that rational).

Based on this alone my MATIC price prediction for 2021 is $3 max and that's if we could see another reasonable bull run before the year runs out.

Otherwise, if the current bear market outlook continues, we could see the token going down along with the entire market to the $0.8 and $1 price range.

Personally, I wouldn't be buying MATIC above $1 under the current market condition.

 

Polygon (MATIC) price prediction 2022 to 2025

With a maximum supply of 10 billion with about 40% of that yet to hit the market, an extended 2018-like bear market coupled with inflation will see the price of MATIC dropping lower than stated above.

In such a case, a fall back to $0.5 and $0.6 between 2022 and 2023 ending wouldn't be too far fetched.

One more factor that may contribute to this possible loss of value is the release of Ethereum 2.0 and as other layer-1 smart contract chains like Solana gains traction and acquires DeFi users from existing "patch" networks.

Why would anyone wants to use a Layer 2 solution when Ethereum itself offers equally low fees and fast transaction confirmation times.

Without some innovation that will give birth to some other unique selling points (USP), I don't see Layer-2 protocols like Polygon surviving the smart contract chains war that's coming.

Fast and cheap alone wouldn't cut in the next 2 to 5 years.

But on a more bright side, my upper limit price prediction for MATIC is $10 in the next 5 to 10 years.

This is assuming that the next bull runs and the mass adoption of crypto within this time frame would give the project a $100 billion market cap valuation which is perfectly feasible.

At this point, the entire crypto market should be somewhere well over $5 to $10 trillion.

 

Conclusion

Polygon (MATCI) is an interesting project that's seen some radical improvements, growth and community support, both from developers, users, as well as key industry players.

However, the competition among smart contract blockchains will be very different from what it is now in the next 2 to 5 years and without further innovation Layer-2 solutions like Polygon may not survive, let alone thrive.

But I want to believe that the team and community would continue to innovate to keep the project relevant and become one of the most successful blockchain networks in the years ahead.

 

What do you think of Polygon? Would it survive and thrive in post-Ethereum 2.0 or would its popularity decline? Share your thoughts with us in the comments section below.

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