How Polygon broke into the top 20 cryptos: Layer 2 solution for Ethereum explained!

How Polygon broke into the top 20 cryptos

Polygon and its native token Matic is now the largest layer 2 scaling system for the Ethereum blockchain

Even with Bitcoin’s latest crash in price, Matic is still up over 400% in the last 3 months. Polygon reached an all-time high in terms of market cap rank, moving to number 13 today (May 26th),

How Polygon solves a lot of problems on Ethereum

Layer 2 solutions work by making copy chains of those on the parent blockchain. These chains are referred to as ‘child chains.’ Polygon is agnostic, so it does not have to be Ethereum as the ‘Parent chain.’ However, in most cases right now, Polygon is used to solve some problems on Ethereum.

Ethereum’s main issue is the crazy gas prices! Gas is used to power the Ethereum blockchain and is needed for all transactions. In some cases, a single transaction can cost between $20-$200 just to send Ether from one wallet to another. This has led to the need for Layer 2 solutions such as Polygon. 

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Polygon aims to be Ethereum’s internet of blockchains. In addition to their existing plasma chain, which has huge cryptocurrencies such as Aave, Ankr and Sushiswap already built on, they plan to develop other layer 2 blockchains for rollups and validum chains.

This could make Polygon the one-stop-shop for everything Ethereum. Unlike projects such as Cosmos or Polkadot that offer similar blockchain solutions, everything on Polygon is interoperable, Polygon, unlike the others, is not a competitor to Ethereum. Polygon leverages all the security, smart contracts and network effects of Ethereum.

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Polygon, at the time of writing this, has a market cap of over 14 billion. Over the last 30 days the Matic token is the 3rd best performing Cryptocurrency according to CoinMarketCap. Polygon offers great scaling solutions for the number 2 ranked cryptocurrency in Ethereum and has carved its own place within the crypto world.

However, Ethereum does have its new update inbound. Optimism is an Ethereum update that will be introduced alongside Eth 2.0 later this year.

This could solve many of Ethereum’s problems overnight and could dent Polygon and other layer 2 solutions. Optimism is a solution to slow transactions and high fees but it’s taking a long time to be released. Polygon is ahead of the game and already has so many big partnerships and programs built on it.

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