In May 2021, the cryptocurrency market underwent a considerable setback. However, MATIC (Polygon) saw +118% growth despite the general dynamics. This exemplifies not the coin’s strong positions in the market but also the ability of certain projects to resist the market’s setbacks.
Ethereum’s basic problem is its network’s high congestion and its slow proof-of-work protocol. As a result of the smart contract rush, its transfer fees rose above Bitcoin’s network fees, reaching $69.50 pm average. MATIC solves this problem by increasing transaction throughput to 65,000 transactions per second with a fee of $0.001.
MATIC was created to be integrated with Ethereum as opposed to the ‘Ethereum killers’ Polkadot and Solana. That’s why MATIC was a bigger winner in the rally experienced by the DeFi market, most of whose platforms are deployed on Ethereum’s network.
Currently, MATIC’s capitalisation stands at $9 billion, ranking it 17th overall. In May, the number of Polygon’s daily active users grew from 7,500 to 28,900. In addition, Aave recorded a 156% growth in the number of addresses after it integrated with Polygon, which made it the number 1 platform among DeFi projects.
On 26 May, reports emerged that Mark Cuban — the billionaire owner of the Dallas Mavericks basketball team — had invested in MATIC. The sum was not publicly revealed, but on 27 May, Polygon’s co-founder spoke of a ‘significant investment’ being made.
The DeFi market grew 60-fold in one year. Users don’t want to pay $10 per transaction, so the demand for low-fee solutions will grow. The only thing threatening Polygon is Ethereum’s transition to a proof-of-stake protocol. However, Vitalik Buterin has said that 2022 is the closest mark, and a full network deployment might take about six years. Until then, the huge difference in fees and transaction speeds will help MATIC’s growth.
Subscribe to stay up-to-date on great ideas!
