This article will give my personal opinion and will talk about the Cons of MATIC
Polygon (MATIC) – What Is It?
Polygon addresses some of Ethereum’s major challenges, such as high fees, poor user experience, and low transaction rates.
Its goal is to create Ethereum’s “internet of blockchains” – that is, an ecosystem of blockchains compatible with Ethereum. By providing a simple-to-use framework, developers can launch their own Ethereum-compatible blockchains with a single click.
Also Read: Polygon Crypto : What is it about and why it’s here to stay
As Polygon envisions a world in which different blockchains can freely and easily exchange value and information, it does away with the technological and ideological divides that separate most blockchains today.
Originally known as Matic Network, the project was later rebranded to Polygon as its scope expanded. Polygon is the infrastructure for a network of massively scaling, collaborative blockchains that retain their sovereignty, as opposed to Matic, which was simply a layer-2 scaling solution for Ethereum.
How Does Polygon Work?
Developers can use Polygon modules to easily deploy and configure their own custom blockchains. Among them are consensus and governance modules, as well as a variety of execution environments and virtual machine implementations.
As a result, these blockchains use the Matic proof-of-stake (PoS) sidechain, which is designed to speed up transactions and reduce fees while finalizing everything on the Ethereum mainchain.
MATIC price today.
Today’s live Polygon price is $2.57 USD with a 24-hour trading volume of $2,167,067,045 USD. Polygon is up by 0.08% in the last 24 hours. CoinMarketCap currently ranks #14 with a market capitalization of $18,432,172,567 USD. It has a circulating supply of 7B MATIC coins and a max. supply of 10B MATIC coins.
Cons of MATIC
Centralization
The first among cons of MATIC is centralization.
It is estimated that the top 10 addresses account for over 75% of all supply. Read more about it here. What an astonishing statistic! Is it worth sacrificing the decentralized aspect of crypto for some gas savings on a layer 1 network that has poor scalability (Ethereum)? In my opinion, no.
Vitalik Buterin, the visionary behind Ethereum, has expressed his concern in an interview about Matic centralization.
In looking at the distribution over the past months, it becomes clear that it has never changed. For the past three months, over 90 percent of the total supply has been held by the top 100 addresses, over 75 percent by the top 10.
In fact, it is rather noticeable that the number of active wallet addresses has steadily increased in the last three months:
The parent chain problem
Ethereum is currently the most integrated solution in terms of number of dapps and DAOs, but it is not guaranteed to last forever. In fact, many other networks currently available are better than Ethereum in many ways. As Ethereum is a second-generation blockchain, newer chains have had ample time and opportunity to address Ethereum’s shortcomings.
However, Polygon is only a scaling solution for Ethereum, and if Ethereum loses market share (which it will regardless of its position as the most widely used layer one blockchain for smart contracts), Polygon’s usefulness and value will decline. For an expensive and slow chain like Ethereum to maintain its dominance, there are too many good alternatives.
The hardfork problem
Early in December, Matic Network made a completely unannounced hardfork of the project without any news or warnings. A sudden and silent hard fork of the Polygon blockchain caused some concern since it is the largest cryptocurrency. Operators, especially, expressed their dissatisfaction upon waking up with their nodes disconnected.
The other projects
Another factor to consider is the number of projects that compete with Matic. There are a lot of solutions that compete with Matic Polygon’s approach. MATIC is facing serious competition from all Layer1s/Layer2s. Examples include ADA, BNB, FTM, LUNA, ATOM, ONE, and SOL, which are all major players in the market.
LRC
Loopring is a scalable program that runs on Ethereum and seeks to incentivize a global network of users to operate a platform that facilitates the creation of new types of crypto asset exchanges. One of an emerging number of decentralized finance (DeFi) protocols, Loopring uses multiple cryptocurrencies, including its own LRC cryptocurrency, to together provide for this platform.
What happens after Eth2?
In an article for Cointelegraph, Sandeep Nailwal notes that the transition to Ethereum 2.0 will increase the network speed to 50 TPS, and the launch of sharding to 3000 TPS and higher.
This bandwidth will allow Ethereum to compete with Visa and PayPal. However, Nailwal considers it insufficient for solving user problems and unlocking the potential of the network:
“Currently, there are decentralized exchanges, NFT markets and blockchain games on the market. They require much more frequent and complex transactions that most payment services cannot handle. In the case of global implementation, blockchain applications will not even have enough 3000 TPS ”.
He is confident that the demand for L2 solutions will not disappear even after Ethereum’s transition to PoS. At the same time, the use of such solutions in the second version of the protocol will increase the performance of the blockchain up to 100,000 TPS