The Polygon ecosystem is one of the most prominent in Ethereum Layer 2 solutions.
Following several bullish announcements in the second and third quarters of 2022, including business deals with significant companies both inside and outside of the Web3, advances in the ecosystem's underlying technology, and Polygon's potential for mobile use, the price action of the cryptocurrency (MATIC) has shown several promising signs.
Polygon connects Ethereum-based Dapps and infrastructure and runs on the Ethereum blockchain. MATIC helps maintain any blockchain project's security, interoperability, and structural advantages while providing the same flexibility, scalability, and sovereignty as the Ethereum blockchain.
Polygon was created as an Ethereum scaling solution because while Ethereum has the potential to support any decentralized web ecosystem, its scalability has been a major drawback.
High gas costs and sluggish transactions continue to be one of the network's biggest setbacks. Blockchain Layer 2 solutions like Polygon are the solution to this problem because their users can enjoy lower gas costs and quicker transaction times when using them.
Polygon's cryptocurrency, MATIC, has a market cap of over $10 billion and trades at a little under $1.10 at the time of writing.
Despite having the highest market cap among all the other Layer 2 tokens, Polygon faces opposition from several other Layer-2 scaling solutions like Optimism and Arbitrum.
Both of these competitors use a special kind of Layer 2 scaling solution called "Optimistic rollups" and are independent of Ethereum, unlike Polygon.
Polygon's dependence on Ethereum means that if Ethereum were to fail suddenly, Polygon would likely follow and become completely worthless.
On 26 April 2019, MATIC made its debut through a public initial coin offering (ICO), managing to raise USD 5.6 million.
The cryptocurrency's ROI is roughly 26537.58% based on its price of $1.2 in August 2022. Some private companies that have invested in MATIC include Decentraland, Zebi, and Parsec Labs.
One of the most important factors to consider when making predictions about the price of a cryptocurrency is the relationship between supply and demand.
The relationship between supply and demand determines the price of every asset. The price of the cryptocurrency increases due to scarcity as demand outpaces supply.
This means that the price of any asset will decrease if there is more supply than demand and vice versa.
The total supply of MATIC tokens is 10,000,000,000, as opposed to 21 million for Bitcoin.
Given that some of the entire supply of MATIC has not yet been distributed, the price of MATIC could start to rise as the balance between supply and demand shifts.
Polygon is currently the biggest layer-2 scaling solution for Ethereum in 2022. The short-term Polygon price forecast predicts that the MATIC price will climb to a yearly high of $1.74 (green line) and possibly end 2022 close to $2 or beyond.
If unexpected bearishness happens to enter the market, Polygon is expected to go no lower than $0.7 (red line).
Defi projects on the Ethereum blockchain projects are expected to flock to the polygon ecosystem in 2023 due to the scaling it provides. This, as expected, will be good for its price.
MATIC will begin the year at $2 or higher and reach or surpass its $3 all-time high.
A pullback may happen at this point. But if Polygon manages to break through its former all-time high to the upside, it may aim for the $5 price level or beyond and conclude the year at $4.40.
In addition, Polygon is expected to hit an absolute low of about $2.2 and a yearly average of $3.79.
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