Today is the two year anniversary of the Polygon (Matic network) launch and it’s now in full stride. Polygon [$.968] has been one of the hottest assets in the entire blockchain space in 2021 and really for the last 12 months has been performing quite nicely.
After a brief consolidation phase Matic is off and running again and is +15.6% over the last 24 hours at the time of writing.
Matic has increased by 5370.2% over the last year and has marked up 174% for the last 30 days. Polygon made a new all-time high of $1.04 on Sunday.
Just 366 days ago Matic was less than two cents [$.0172] and there wasn’t a lot of demand for Layer-2’s on Ethereum yet. Fast forward to today and the popularity of decentralized finance has increased by many orders of magnitude. The high fees currently on the Ethereum network are a direct correlation to the growth of popularity of dApps built on the network and the demand for increased transaction throughput and blockspace with a limited capacity.
Rise of DeFi and NFTs
The rise of DeFi in the great DeFi summer of 2020 was the beginning of the demand for block space on the Ethereum network last year. During the height of last year’s DeFi boom a lot of users were heading to the Ethereum network to farm yields and stake tokens on new innovative protocols. These new ideas are really beginning to now change the way the legacy financial world views finance and the way a lot of people are thinking about the future of financial products.
However, despite the increase in popularity last summer, the network is under even further demand with the rise of non-fungible tokens [NFTs] gaining in prominence. With more artists, celebrities and sporting clubs giving rise to the popularity of NFTs, it appears Ethereum like the internet in its early days seems to be in a constant process of increased functionality / demand and therefore the desire for scaling solutions have arisen.
Why does Polygon Help Ethereum?
How does Polygon help the Ethereum network scale?
Polygon is a Layer-2 scaling solution that allows ‘one-click deployment’ of preset blockchain networks. The Matic network is an attempt to increase the scalability and security through interoperability, layered scaling and cooperating networks while still utilizing the core Ethereum layer and a set of validators for consensus.
Currently, developers are working on the Matic PoS Chain, Matic Plasma Chain, ZK rollups, Optimistic Rollups, Enterprise networks and other side chain networks.
Polygon is one of the most popular L2 solutions currently, other L2 projects include xDai and Nahmii, which are also working to increase functionality on the Ethereum network and ease the burden on the base layer.