Ethereum is everywhere. So many blockchain projects use it every day: from serious DeFi systems to entertaining NFT games for crypto fans. And there is a reason for that: the Ethereum blockchain is perfectly suited for all those applications because it helps you utilize smart contracts. But it has become very expensive, so the crypto world has come with a solution — Polygon.
This steady growth of the Ethereum ecosystem has (predictably) made its transaction fees (referred to simply as ‘gas’) extremely high, prohibiting users from making small transactions. And this is where Polygon comes on stage. You can think of it as an add-on for Ethereum, or ‘sidechain’. It operates alongside the main blockchain to provide cheaper and faster transactions. Basically, you give Polygon your money, and it gives you access to all kinds of Ethereum services.
MATIC
Sounds great, you may think, but HOW do you give Polygon those money? Well, this sidechain has its own cryptocurrency called MATIC. It operates on the Proof-of-Stake consensus mechanism: all coins were minted at the launch of the project, so mining is out of question. About 4/5 of the coins are exchanged on the market, and about 1/5 are controlled by the team which gradually releases them. MATIC is used as the main Polygon crypto coin: you pay fees with it, holders use it for voting, and so on.
Of course, you can also earn using MATIC, and that’s a really interesting topic to discuss. Basically, you can just buy and sell it to make money out of market fluctuations — and with MATIC, that may be extremely profitable. This cryptocurrency has managed to grow from $0.0035 to almost $3 in just one year, and while that initial surge was probably a one-time event, you can still earn something on MATIC. Now it’s worth about $0.6, but some crypto experts predict that it may hit $5 by the beginning of 2024.
Another way to earn with MATIC is staking. That means you freeze some amount of crypto in the Polygon blockchain — similar to a common bank deposit. Your coins help the system operate, and you get some reward. While definitely less profitable (APY is about 20% at best) than speculating, this way of using your coins is much safer, so if you’re more of an investor, consider this option.
