Polygon (CCC:MATIC-USD) used to be known as the MATIC network. It rebranded itself as Polygon in Feb. 2021. As a result, Polygon MATIC-USD has a chance of rebounding and making a good deal of money for investors in the cryptocurrency.
The MATIC-USD token now has a chance of recovering back to its former highs. MATIC-USD previously reached a high of $2.4544 on May 17. As of June 1, it was at $1.8649, or off just 24%. This is substantially less than other altcoin cryptos, many of which are still down over 50% from their prior May highs.
Polygon’s Standout Features
Matic started in 2017 by three seasoned crypto developers. Polygon is an Ethereum (CCC:ETH-USD) compatible blockchain platform or framework designed to get around some of Ethereum’s major issues. Some of these issues are Ethereum’s high fees, congestion and clogging risk, according to Altcoin Buzz.
Polygon now bills itself as “Ethereum’s Internet of Blockchains.” Polygon’s focus is on providing the framework for building Ethereum-compatible blockchains. It still uses the MATIC token, which it uses for governance, staking and gas fees (transaction fees).
The idea is to allow for scalability, which is the root cause of the high fees and congestion at Ethereum. As such, it is “built by developers for developers.” It builds “snapshots” of various chains and uses them in the blockchain network.
One of the best explanations of how this works can be seen in a highly educational video from the Coin Bureau. The author of that video basically shows that Polygon wants to become the “one-stop-shop for everything Ethereum.” That is, for developers and validators of blockchain transactions. (Polygon uses a proof-of-stake validation system. Ethereum will migrate to this system in several months.)
This is a lot of technical mumble jumble to most people. One practical aspect is that Polygon recently partnered with game developer Atari. Atari is building both an online casino based on the Polygon blockchain network, as well as an NFT utility (non-fungible token).
Where This Leaves the MATIC Token
In early March Polygon’s Matic-USD token began to trade on a major crypto exchange. Coinbase (NASDAQ:COIN) is the largest crypto exchange and is selective on which cryptocurrencies it allows to trade on its exchange. Its acceptance of Polygon had a huge stimulating effect on the price which eventually rose over 10 times to its peak in mid-May.
Moreover, there is a fixed supply of MATIC-USD tokens. Polygon has a limit of 10 billion tokens, which could help push the price much higher. This is from the limited amount of float available to the public. Coinmarketcap reports that there are just 6.26 billion tokens in circulation right now. That leaves just 37% available in the future. These can be rewards in its proof-of-stake system.
In addition, Polygon has a low market valuation of just $11.3 billion. The MATIC-USD token could easily end up moving up 2 to 3 times that level over the next two or three years. This will happen as a result of its popularity as a blockchain technology as well as from its capped supply.
As a result, expect to see a 200% to 300% move in the MATIC-USD over the next several years. This will take Polygon well over its previous highs of $2.45 or maybe even twice that level. However, keep in mind that this is a highly speculative and volatile digital asset, as are most cryptocurrencies.
On the date of publication, Mark R. Hake held a long position in Ethereum (ETH-USD). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.