While the cryptocurrency sector is currently experiencing a sharp correction, the Polygon project has been holding its own for the past few days. Despite a sharp decline on this day, Polygon is still one of the few projects to experience a positive development over the past 7 days. Together, we will try to determine if the long-term growth will be there.
Formerly known as Matic Network, the Polygon project is based on an Ethereum token. The objective of the project is to allow transactions that are both faster and cheaper than on Ethereum. For this, Polygon uses layer 2 sidechains. These are blockchains that work in parallel to the Ethereum blockchain.
As you can see, Polygon is trying to make its project attractive from the point of view of scalability. Scalability measures the ability of a protocol or product to adapt to a change in the order of magnitude of use. In the context of cryptocurrencies, this means offering the ability to significantly increase the number of transactions. As these assets are increasingly used as a means of payment by the general public.
Good to know: The developers of the Polygon project estimate that the blockchain can process more than 60,000 transactions per second.
At the time of writing, a Polygon token is trading for $1.81. That is an increase of 55% over the last 7 days, but a decrease of almost 12% on May 19, 2021 alone. A decline that concerns the entire cryptocurrency market, dragged down by the dramatic fall in the price of Bitcoin. Over the past 24 hours, the most famous virtual currency has actually seen its price devalue by almost 25%.
The Polygon blockchain protocol operates on the Proof of Stake (PoS) principle. Mining is not possible via this project and the maximum number of tokens in circulation is set at 10 billion units. Currently, 6.15 billion tokens are in circulation.
In terms of market capitalization, the project is currently worth nearly 1.8 billion dollars. This gives it a place among the 20 most significant market capitalizations.
To invest in cryptocurrencies, it is possible to use the services of an online broker. An online broker will allow in addition to invest on other crypto projects but also on other asset classes such as stocks, stock indices or even commodities. Some brokers even offer to invest in ETFs or bonds. Allowing all traders to set up a real portfolio diversification strategy.
Before investing on the project, it is appropriate to use tools of technical analysis. The entire cryptocurrency market has been in free fall for several days. A particularly marked trend on this day of May 19. It is therefore potentially interesting to look for the first signals of a recovery.