Polygon Matic Staking

Polygon Matic Staking

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Chris
Chris

An editor at Coincrop


19 Aug 2022 | 20 min read
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thereum, the 2nd largest crypto by its current market cap, remains the top alternative to Bitcoin. This makes the ETH blockchain host vast digital activities worldwide. But investors started looking into options with faster transactions and low-cost fees like Polygon.

Polygon (MATIC) grew in rapid popularity with its directives to resolve ETH’s problems. The comparatively new platform stands out among other ETH-based crypto assets. Polygon effectively put ETH blockchain to deploy a simple, cheap, and secure digital system.

This guide tells you all you need to know about Polygon Matic Staking.

Disclaimer: All of the information written on Coincrop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.

What is Polygon?

Polygon is a well-known cryptocurrency based on a blockchain ecosystem of the same name. Its market symbol MATIC also refers to the platform’s $MATIC token. But Polygon isn’t a direct blockchain network. 

Instead, it’s a layer-2 blockchain ecosystem having a stack of protocols built on the Ethereum network. Thus, Polygon aims to resolve ETH issues associated with scalability and infrastructure development. A layer-2 solution defines a blockchain to run parallel to a mainnet (specific network) like Ethereum’s. 

Based on the protocols, Polygon has been referred to as the ‘Internet of Ethereum Blockchain’ by experts. All those sidechains make the ETH’s adapted ecosystem for Polygon faster, more efficient, and cheaper.

It acts more like an express train running on a track to make a few stops while going faster. Here, the existing track is the Ethereum blockchain, where Polygon enables faster and less expensive trades. It uses ERC-20 $MATIC as its utility token in the crypto-verse for governance, staking, and payment.

This article tells you the importance of Polygon Matic Staking.

What is the history of Polygon?

Jayanti Kanani, an Indian data scientist, detected weak links in the then ETH’s blockchain network in 2017. Overwhelming activities by the then NFT Cryptokitties congested the network to stretch the processing time. He even pointed out the issues related to exorbitant gas fees, limited transaction volume, and size.

Kanani teamed up with Sandeep Nailwal and Anurag Arjun to resolve the ETH’s scalability issues. All three being Indian-born, Sandeep was a blockchain developer, whereas Anurag was a business consultant.

The 3 launched Matic Network in October 2017 as an Indian Venture from Bangalore. The platform had its first significant funding as a Binance Initial Exchange Offering (IEO) in 2019. Coinbase even backed them at some point. Also, the founding team set Polygon’s own network into motion by 2019.

However, they eventually moved to Mumbai to launch the Polygon mainnet in 2020. It rebranded in February 2021 to denote the newer directions. Matic Network became Polygon to keep MATIC for its native crypto token. The designed Polygon mainnet was actually started operating in March 2021.

Another popular crypto utility token, Aave (AAVE), started its journey based on the Polygon in April 2021. The project skyrocketed the value of circulating $MATIC and good yield farming affordability. It explains why over 7,000 DApps (Decentralized Applications) are running on its ETH-based sidechain.

They published the much-anticipated London Hard Fork with an EIP (Ethereum Internet Proposal) – 1559 upgrade in January 2022. Its implementation will alter the current mechanism of transaction fees. Instead of the 1st-price auction, the proposed base fee should deliver low fees with more stability and safety.

How is Polygon created?

Polygon is a multi-level platform featuring a plethora of sidechains to unclog the main platform. And those sidechains are specific blockchains bound to the original Ethereum Network. They also support many decentralized finance protocols to speed up the processing time for the Ethereum ecosystem.

The network’s core component is Polygon Software Development Kit or SDK. It’s a modular and flexible framework to help the users build different types of applications. However, the functioning system is more or less a stack of 4 inter-dependent layers.

The execution layer remains at the top, followed by the Polygon Network layer. And Ethereum lies at the bottom of the stack next to the security layer. A connecting technology called the Polygon Bridge keeps the stack together. All the layers activate built-in smart contracts to enable cross-chain transactions.

Polygon Bridge is a two-way trustless channel between Ethereum and Polygon. Here, a trustless channel refers to the involvement of no 3rd party medium. Ethereum acts as the root chain, whereas Polygon acts as the child/follower chain.

The structural mechanism allows the child chain to work independently without involving the root chain. This effectively saves the parent chain from getting overwhelmed or overworked. Hence, the processing system requires less money to reduce the transaction cost.

There are two major types of Polygon bridges to make things work – Plasma and PoS (Proof of Stake).

    1. Plasma Bridge

It uses ETH’s plasma scaling solution with an integrated exit mechanism. The system entails superior security against a somewhat longer transfer period. This one seems more beneficial to developers than customers. Plasma facilitates ETH, MATIC, ERC – 20 tokens, and ETH-based NFTs.

    2. PoS Bridge

It adopts the Proof-of-Stake consensus to secure the working network. This technology relies on a node validating set to authenticate the transfer blocks. It also consumes an enormous processing power to generate new blocks. PoS enables fast deposit/withdrawal of NFTs and tokens.

Running a full node in the blockchain to validate transactions will make you a validator. You can also receive a share of trading and newly created MATIC fees. But a delegator deals with others’ MATIC to conduct PoS validation. It’s easy for one where a larger delegated stake means higher voting power.

What makes Polygon unique?

There are several other layers 2 ecosystems based on the Ethereum blockchain. But Polygon is the only one to allow MATIC to get stacked in its blockchain. Staking enables MATIC users to earn interest annually for validating the transactions.

Also, the network offers acceptable solutions to everyday customers, enterprises, and developers. Its approach to the solutions comes in a single framework. The system also gives higher control levels and customization to choose the best solution.

How do I purchase Polygon?

Polygon’s extensive contribution to the Ethereum ecosystem for speed and cheapness makes it a popular investment. And you can buy MATIC on top crypto exchange platforms like: Binance, Coinbase Pro, Crypto.com etc.

Try to find an exchange with maximum security, low fees, and minimum account balance for your trades.

How do I store Polygon?

One crucial task after buying cryptos is getting secure storage. Scams and frauds can take away your valuable assets in seconds. There are four different ways you can remain safe from prying eyes –

    1. Hardware Wallet

The physical device keeps your public and private keys locked away. Also, the wallet is disconnected from the network to enable further security. It’s impossible to access your cryptocurrency without getting those keys.

    2. Software Wallet

These wallets are desktop programs, browser extensions, and smartphone apps. You need to download them on your device to store the assets. Accessing transactions is comparatively easy but less secure than hardware wallets.

    3. Paper Wallet

Writing down the private keys to access your crypto is seemingly a general idea. You can also create a QR code to keep the keys locked and secure. But you must keep the original code/writing stored to avoid access denial.

    4. Exchange Accounts

Opening an account with any crypto exchange gets you built-in storage. Coinbase and Binance allow the customers to keep their assets there. But it’s more like a temporary solution due to extreme security breach concerns.

You can consider Ledger for MATIC’hardware or cold storage. And MetaMask, MEWconnect, Alpha Wallet, or SimpleHold is available as software wallet.

What are the disadvantages of Polygon?

Everything is there in Polygon with superior scalability, excellent security measurements, full ETH compatibility, and a pleasant developer experience. And customers enjoy an incredible 65,000 transactions per second for a 2.1-second confirmation time. Still, the network isn’t without certain flaws/drawbacks.  The following looks at Polygon Matic Staking disadvantages:

    1. Dependence on Ethereum

The entire idea stands on how ETH works in the market. Severe disruptions in ETH circulation can alter MATIC value. Polygon won’t have any value without Ethereum’s existence.

    2. Limited Uses of MATIC

Altcoins are yet to become a currency to buy everyday items. Its use remains confined to governing and securing Polygon. And the application is limited to paying transaction fees.

    3. Competition with Cryptos

Being an ETH-based asset, MATIC competes with other ETH-like cryptocurrency units. Cryptos like Solana, Cardano, Ripple (XRP), and even Ethereum are competing.

However, like no other, MATIC’s superior problem-solving features give it a head start. Therefore, the odds of the asset going down remain out of the question.

How much can I earn from Polygon?

There are various ways in which you can earn rewards from Polygon Matic Staking:

OrganizationDeposit assetsReward assetsAPY Rate
OKEx

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

123% - fixed (5 days)

OKEx

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

60.0% - fixed (7 days)

MyContainer

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

23.3% - flexible

OKEx

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

15.0% - flexible

Nexo

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

14.0% - flexible

Everstake

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

12.0% - fixed (7 days)

Trofi

Saving

Deposit PolygonPolygon (MATIC)

Earn PolygonPolygon (MATIC)

11.0% - fixed (30 days)

How much Polygon is in circulation?

$MATIC (Polygon Matic Staking) holds a maximum fixed supply of 10 billion tokens with base fees for its burning. That’s why the market will have a deflationary effect on the digital asset. Polygon’s core team projects a burning rate of 27 million MATIC annually.

The founders only issued 3.8% of the maximum token supply on a private sale in 2017. The platform issued 19% extra on its launchpad sale in April 2019. The market keeps getting more circulation every month as the supply is released monthly.

CoinMarketCap gives the current distribution of remaining MATIC in circulation as follows –

    • Team Token: 16%

    • Advisor Token: 4%

    • Network Operations Token: 12%

    • Foundation Token: 21.86%

    • Ecosystem Token: 23.33%

Polygon Network aims to release all the tokens by December 2022 for market circulation.

Should I invest in Polygon?

The current market supply stands at 8.01B MATIC to cover a $6,734,281,648 capitalization. It also boasts about 65,000 transactions every second on one sidechain. And the process takes a respectable block confirmation time of 2 seconds only.

Crypto users are highly fond of MATIC due to the included scalability and infrastructural developments. Its strong, ambitious, well-projected system continued to grow over the years. Polygon is often regarded as the prime layer-2 choice for ETH.

Still, the asset’s price remains prone to high volatility like all other altcoins. It’s a must for every newbie investor to study and understand MATIC from its core. Meanwhile, keeping your eyes and ears open to the market should deliver profits.

Polygon Matic Staking Conclusion

Polygon allows the creation of other crypto assets and DApps based on the original ETH blockchain. Its native $MATIC token lets you do profitable trading against the limited usability.

The well-rounded approach with flexibility makes MATIC a smart and dependable choice for many. The investment requires your instinct and knowledge to figure out the best of Polygon market trades.

Polygon Matic Staking FAQs

High volatility is a feature of MATIC, like all other crypto assets. You must carefully consider the market trend for a profitable long-term investment.

MATIC seems to outmatch/kill ETH by speed and transaction fees. But Polygon’s more like an ETH savior as its existence entirely depends on Ethereum’s blockchain.

The optional security protocol can reclaim their self-sovereignty at any time. It enables full interoperability within the Ethereum mainnet. However, the mainnet maintains close security measures to prevent intrusion or breach.

ZK (Zero Knowledge) is a layer-2 solution for off-chain transactions. Transactions get executed in child chains by submitting the validity proof to the root chain only.


Chris

Chris

An editor at Coincrop
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Chris is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely assembling lego models.


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