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Key facts about Polygon (MATIC):
Polygon was launched in October 2017 as Matic Network and emerged as a significant player in the Ethereum ecosystem. The Polygon team pioneered Plasma technology and developed sidechains as a scaling solution. The success of the Matic Network led to many projects and partnerships with industry leaders Binance and Coinbase. In 2019, the network introduced its own cryptocurrency, MATIC.
In 2021, the network rebranded as Polygon, focusing on 2-layer solutions for Ethereum-compatible blockchains. These solutions process transactions outside the main blockchain, on sidechains within a "second layer." This approach relieves the main blockchain, resulting in faster and cheaper transactions. The Polygon sidechain uses the Proof of Stake consensus mechanism. By holding Polygon (MATIC) tokens in your wallet, you can support the Polygon network and receive rewards in the form of additional MATIC tokens via staking.
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From the outset, the Matic Network identified several key issues in blockchain projects. These challenges included scalability, speed, and high transaction fees. With the 2-layer approach, the Matic Network successfully addressed some of the blockchain's limitations and has now expanded its objectives. Under the new name ‘Polygon’, the company embarked on a new mission: to resolve other challenges in the blockchain ecosystem and simplify developers' entry into this realm.
Polygon provides a platform that empowers developers to create an optimal blockchain network. It combines the best aspects of a standalone blockchain with those of Ethereum, resulting in a platform that offers high scalability, flexibility, and sovereignty, coupled with interoperability, security, and the expertise gained over years of development.
The blockchain platform is built on top of Ethereum and aims to facilitate fast and cost-effective transactions with exceptional performance and security. Polygon offers developers pre-configured blockchains and an interoperable protocol through one-click deployment. This enables them to build decentralised applications (DApps) and facilitate exchanges between Ethereum and other blockchain networks. With Plasma technology, Polygon enables the transfer of MATIC tokens from Ethereum to the Polygon blockchain. Additionally, the company provides a modular security service. Polygon’s primary blockchain (Matic PoS Chain) serves as a security layer for all blockchains launched with Polygon. This multi-layered approach allows Polygon to future-proof its company and MATIC tokens while also securing Ethereum with a widely connected blockchain ecosystem. Polygon also benefits from the increasing number of DApps built on its platform.
MATIC tokens are used to pay transaction fees on the Polygon platform and reward users who participate in transaction verification and network security. MATIC tokens also act as incentives for developers to create DApps on the Polygon platform. You can easily purchase Polygon (MATIC) tokens through Bitpanda, for instance. If you prefer not to focus on one cryptocurrency, we have an ideal solution for you. With Bitpanda's Crypto Indices, you can invest in Polygon (MATIC) and other coins or tokens in one go, without purchasing them directly. The crypto indices automatically invest in a pre-constructed portfolio that includes the top cryptocurrencies based on their current market capitalisation and liquidity.
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If you want to learn more about Polygon and MATIC tokens, you can refer to the Polygon (MATIC) whitepaper.
When Polygon's cryptocurrency entered the market, the price of MATIC tokens was $0.01109 per token. For over a year, the price remained relatively stable with minimal noticeable movements. At the beginning of 2021, the name change and the announcement of new goals brought about the first price surge. Polygon stated its commitment to providing a scaling solution for Ethereum and other blockchains, addressing the high transaction costs on the Ethereum network. The MATIC price rose to $2.45. By the end of July 2021, the price declined again but experienced another upward trend, culminating in an all-time high of around $2.88 in December 2021. Subsequently, the price declined and reached its low point of $0.38 in June 2022. As of February 2023, the MATIC price has been fluctuating between $0.76 and $1.30.
The key milestones and events in the Polygon (MATIC) price history so far are as follows:
The price of the MATIC token is influenced by typical market factors such as supply and demand, overall market trends, global or political events, prohibitions, and competition. Specifically for Polygon, developments on the Polygon platform, such as the introduction of new features or the release of updates, can impact the price of MATIC tokens.
The cryptocurrency MATIC, along with its underlying company Polygon, is still relatively young. Let's explore how the Matic Network evolved into Polygon.
Initially known as Matic Network, Polygon focused on addressing well-known challenges of blockchain technology for Ethereum. These challenges included scalability, transaction speed, and cost. The company's success in tackling these issues led to the emergence of numerous projects and partnerships with reputable companies. Polygon established itself as a gateway to Web3, the decentralised web based on blockchain technology and smart contracts. Recognising this shift in perception, the founders of Matic Network decided to redefine their strategy and develop their own network. In early 2021, the company rebranded as Polygon. Its aim is to provide developers with an accessible entry point to blockchain technology through the Polygon platform, while realising the vision of a large, interconnected network. This involves combining the benefits of a standalone blockchain with the extensive Ethereum ecosystem, including scalability, flexibility, sovereignty, interoperability, security, and a wealth of developer experience.
While memecoins like Dogecoin or SHIBA INU were introduced to the market as fun currencies, the Polygon (MATIC) token entered with a clear objective: to address Ethereum's scalability issues and drive development towards Web3. Polygon's 2-layer technology has already gained the trust of numerous renowned companies. Brands like Nike, Adidas, and Prada have released NFT collections based on the Polygon Layer-2 chain. Polygon also counts Mercedes, Bentley, Amazon, Meta, Reddit, Adobe, and Coca-Cola among its clients. Samsung is also using the Polygon blockchain for its streaming app Savage.
Polygon faces direct competition from two formidable cryptocurrencies: Cardano (ADA) and Solana (SOL). These two digital assets are often referred to as Ethereum competitors in the crypto market as they aim to tackle the challenges of the Ethereum blockchain. Cardano has developed a significantly more efficient blockchain, excelling in security and decentralisation while using the Proof Of Stake consensus mechanism. Ethereum, on the other hand, initially used Proof Of Work but has since transitioned. Solana, on the other hand, has been labelled an Ethereum competitor primarily due to its high scalability. However, both cryptocurrencies have encountered their own issues, which have kept them from surpassing Ethereum's technology so far. Solana has experienced frequent network crashes, while Cardano is still lacking use cases and its development progresses slowly.
Instead of directly competing against Ethereum, Polygon seeks to address the challenges of the Ethereum blockchain. The crypto company continues to build upon Ethereum's technology and leverage its advantages. The success of Polygon (MATIC) compared to Cardano and Solana seems to validate this approach. Additionally, Polygon dealt a blow to Solana by securing the NFT startup DeLabs, which had previously collaborated with Solana.
Like all cryptocurrencies, the price of Polygon (MATIC) tokens is subject to significant fluctuations. Various factors contribute to the market and influence the price. They include the following:
In general, these factors influence the crypto market
Let’s look at common questions about Polygon and MATIC tokens.
Polygon has developed its own network that extends the capabilities of the Ethereum blockchain, offering a solution for enhanced scalability. By using 2-layer side chains that run alongside the main blockchain, Polygon reduces its burden. The Polygon platform provides developers with pre-configured blockchains. Polygon has also introduced its own token called MATIC, which facilitates the Proof Of Stake mechanism of the Polygon blockchain.
Cryptocurrencies are speculative digital assets without intrinsic value, so it's challenging to discuss security in relation to them. However, the blockchain technology underlying cryptocurrencies offers significant security. Polygon also offers an optional security service for its blockchain.
Some advantages of Polygon (MATIC) tokens include:
While Polygon aims to build a decentralised ecosystem, concerns exist regarding the centralisation of the network. This is due to the dominance of Polygon layers and validators supporting the network. Additionally, the company has received criticism for its dependence on Ethereum.
Predicting the future of a cryptocurrency is challenging. Price fluctuations are significant, and the market is highly volatile, making reliable forecasts difficult. Although the MATIC token has shown a medium-term upward trend since mid-July 2022, there are no guarantees it will continue. However, the ideas and goals pursued by Polygon are promising. The company aims to address some of the challenges faced by other blockchains with its technology. The successful implementation of the 2-layer approach by Polygon has been notable. Even so, competitors are constantly evolving and may offer their own solutions in the near future.
Polygon has established itself in the market and has already attracted many well-known customers. The company provides effective solutions to alleviate the load on the Ethereum blockchain and successfully implements the 2-layer approach with its own Polygon blockchains. Polygon has become an integral part of the cryptocurrency market.
Polygon (MATIC) has the potential to offer attractive returns. However, investing in cryptocurrency remains risky. Significant setbacks are always possible, and the price can decline in the long term, potentially rendering MATIC tokens worthless. Investing in Polygon can be rewarding for those with a high risk tolerance.