Virtual Currency Information Bureau | Currency Introduction: Resolving Ethereum's traffic congestion!? An easy-to-understand explanation of the mechanism and future prospects of POL (formerly MATIC)! What is Polygon 2.0? #POL #Polygon #Virtual Currency
Video explanation
[Complete Guide for Beginners] What is the virtual currency POL (formerly MATIC)? A thorough explanation of how Polygon works and its future prospects!
Hello! I'm John, a veteran cryptocurrency blogger. In the world of cryptocurrency, new words and technologies are constantly appearing, and many people may feel like they have no idea what's going on. But don't worry. In this blog, I'll explain this complicated world in simple terms so that anyone can understand.
Well, this time we will be looking at a cryptocurrency that is attracting a lot of attention."POL"If you thought, "Oh, wasn't it MATIC?", you're right! POL is an evolution of the token previously known as "MATIC". This change involves the project's grand vision for the future. After reading this article, you will clearly understand why MATIC became POL, what POL is aiming for, and what possibilities it has for us. So, let's explore the world of POL together!
Basic Information: What is POL (formerly MATIC)?
Let's start with the most important thing: what is POL? In a nutshell:"The core cryptocurrency that runs the Polygon network.".
But this alone doesn't really explain it, does it? Let's take a closer look.
The problem POL is trying to solve
To understand POL, you first need to know about Ethereum, the king of virtual currencies. Ethereum is a groundbreaking technology called smart contracts (programs that automatically execute contracts), which has given birth to a series of new services, such as DeFi (decentralized finance) and NFTs (non-fungible tokens).
However, with this popularity comes problems."Scalability issues"Simply put, the number of users is so high that it's like the roads are jammed. This has caused problems such as slow transaction processing and extremely high fees (called gas fees).
Here comesPolygonPolygon was created to resolve this congestion on Ethereum."Layer 2 Scaling Solutions".
- If we compare it to a highway...
- Ethereum: The main highway that everyone uses. There is a lot of traffic and it is always jammed.
- Polygon:A new bypass road was built next to the expressway, making it easy to drive on.
Polygon is a bypass road that allows transactions to be processed faster and cheaper, and POL tokens act as the "fuel" and "toll" that keeps the entire Polygon network running and secure.
Evolution from MATIC to POL: The Beginning of "Polygon 2.0"
Originally, the token was named "MATIC". However, a major upgrade plan called "Polygon 2023" will begin in the second half of 2.0, and as part of that, the token will evolve to "POL".
This is not just a name change. MATIC was a token to run "one chain (Polygon PoS chain)", while POL is"An entire ecosystem of multiple interconnected chains."It is designed as a next-generation token to support the future. In the future, Polygon aims to become the "value layer of the Internet" where blockchains with various characteristics come together, and POL will be the unified currency at the center of it.
Supply Details: What Matters for Prices
When considering the value of virtual currency, "supply" is a very important factor because the balance between supply and demand determines the price.
- Max Supply:100 billion POL
- Circulating Supply: The amount currently being traded on the market (this is constantly changing)
The maximum supply of POL is the same as the previous MATIC100 billionThis is the upper limit that "will never increase any further." The reason why this is important is that the limited supply creates scarcity. For example, one of the reasons why gold is so valuable is that there is a limited amount of it on Earth. Similarly, if the demand for the Polygon network increases and more people want to use POL, it is believed that the value per POL will increase due to the limited supply.
Since the transition from MATIC to POL is one-to-one, there will be no change in the supply volume itself. For investors and users, this stable supply design is one of the reassuring factors.
Technical details: How does POL work?
Although the terms "blockchain" and "Layer 2" may sound difficult, the basic concept is simple. Here, we will explain the technology that supports POL in an easy-to-understand manner.
Layer 2 (L2) Scaling Solutions
As mentioned above, Polygon is Ethereum's "Layer 2". This is a mechanism that processes most of the transactions "outside" the Ethereum main network (Layer 1) and records only the final results in Layer 1. This can significantly reduce the burden on Layer 1.
Let's use cooking as an example.
- Layer 1 (Ethereum): The main kitchen. It's nice and big, but it only has one stove.
- Layer 2 (Polygon): A satellite kitchen with many stoves, added next to the main kitchen.
A lot of dishes (transactions) are cooked at once in the satellite kitchen (Polygon), and only the completed dishes are carried to the main kitchen (Ethereum) and reported. This keeps the main kitchen from becoming congested, dramatically improving overall efficiency. This is the basic idea of Layer 2.
Proof of Stake (PoS)
Polygon is"Proof of Stake (PoS)"This is a more environmentally friendly and efficient method than the "Proof of Work (PoW)" used by Bitcoin.
- PoW (Proof of Work): A massive calculation race (mining) takes place, and the person who solves the calculation the fastest generates a block and receives a reward. It requires a huge amount of electricity.
- PoS (Proof of Stake)：Those who hold a lot of the target virtual currency (in this case, POL) and "stake" (deposit) it in the network are more likely to obtain the right to generate blocks. Since there is no need for a calculation race, it saves energy.
By staking POL, you can participate in the validation of the network and receive new POL as a reward."Staking"This will be a way for users to increase their assets while holding POL.
Polygon 2.0 Technology: Towards a Multi-Chain Future
The "Polygon 2.0" behind the upgrade to POL will introduce even more advanced technology."ZK-Rollups"This is a method of bundling many transactions into one, proving that the transaction is legitimate using a cryptographic technique called "zero-knowledge proof," and recording it in Ethereum. This is a very advanced technology, but it aims to achieve even higher security and efficiency.
In the future, various companies and projects will be able to easily create their own blockchains (called supernets) using Polygon's technology, and POL will be the core token that can be used in common on all of those chains.
Team and community: project credibility
The quality of the team and community behind a cryptocurrency project is crucial when judging its future, and Polygon scores highly in this regard.
- Development team：Development is led by experienced and talented engineers at Polygon Labs. They regularly share their technical progress and future vision, and are very transparent.
- A powerful partnership：Starbucks, Disney, Nike, Meta (formerly Facebook), and other large global companies are conducting proof-of-concept experiments and deploying services using Polygon's technology. This is proof that Polygon's technology is applicable in the real world.
- Active Community: The community of developers and users is expanding all over the world, and new applications (DApps) are being developed every day. A vibrant ecosystem is the lifeblood of a project.
Use cases and future prospects: What is POL used for?
In what areas are POL and the Polygon network specifically used? The possibilities are endless, but the main use cases are as follows:
- DeFi (Decentralized Finance): Users who found it difficult to participate on Ethereum due to high fees can now use DeFi services such as lending and DEX (decentralized exchange) at low cost on Polygon.
- NFTs and Blockchain Games: Low cost and fast transactions make it ideal for minting, buying and selling NFTs, and trading in-game items. Many popular blockchain games choose Polygon as their platform.
- Enterprise SolutionsPolygon's scalability and flexibility will be a major attraction as companies adopt blockchain technology for supply chain management, digital ID and more.
- settlement: It is fast and cheap enough that it can be used for everyday small payments, so it is expected to become a widespread payment method in the future.
And when talking about the future of POL, it is essential to mention"Polygon 2.0"When this happens, Polygon will not just be one blockchain, but will be like an "internet of blockchains" where various chains are seamlessly connected. In that world, POL will play the role of a token that is the basis of economic activity, and its importance is expected to increase significantly from now.
Comparison with competitors: What are Polygon's strengths?
There are several other Layer 2 projects besides Polygon that aim to solve Ethereum's scalability problems.Arbitrum,OptimismAnd so on.
So what are Polygon's (POL) strengths compared to its competitors?
| project | Strengths and Features |
|---|---|
| Polygon (POL) | Multi-Chain StrategyIn addition to providing a single chain, we also provide a framework (Polygon CDK) that allows companies and developers to easily build their own chains. In the future, we aim to become a "hub" that connects all of these with the POL token. |
| Arbitrum (ARB) | It has a large TVL (total assets under custody) among Layer 2 cryptocurrencies and a very active ecosystem. It achieves high scalability with a technology called Optimistic Rollup. |
| Optimism (OP) | It has a vision of "Superchain" and also aims for chain interoperability. It has a unique mechanism for encouraging citizen participation in governance. |
The biggest differentiating point is"It will be the foundation for any chain."It's a grand vision. While other projects are trying to create "one better road," Polygon is trying to provide "urban planning itself, where anyone can freely build a road network." If this strategy is successful, Polygon will be able to establish a unique position in the Layer 2 competition.
Risks and Cautions: What you need to know
Any investment involves risk, and if you are interested in POL, it is essential that you understand the potential risks.
- Price Fluctuation Risk: This is true for all virtual currencies, but the price fluctuates greatly. Prices can rise or fall sharply depending on the overall market sentiment or news about a project. Never invest in cryptocurrencies with money you need for your living.
- Intensifying competitionAs mentioned above, the Layer 2 field is very competitive. If other projects develop better technology or gain popularity, Polygon's advantage may decline.
- Regulatory risks:Governments and regulatory authorities around the world are creating rules for virtual currencies. If strict regulations are introduced in the future, it could have an impact on the entire market.
- Scams and hacksPopular projects tend to attract scammers who create fake websites and social media accounts to try to steal users' assets. Always be vigilant and bookmark the official site URL.
Expert opinions and analysis
There are various predictions about the future of POL on overseas cryptocurrency analysis sites. For example, looking at the price forecasts for 2025 on platforms such as Changelly and Gate.io, some analysts predict that POL will$0.25 to $0.47Some have pointed out the possibility of reaching a price range like this.
These analyses are often based on the progress of the Polygon 2.0 roadmap, the expansion of the ecosystem, and expectations of a recovery in the overall market. In particular, there seems to be a strong view that if POL becomes used across multiple chains, demand for the token will increase significantly.
However, these are only predictions and are in no way a guarantee of future prices. It is important to use this information as a reference and make the final decision yourself.
Latest News and Roadmap Highlights
When tracking POL and Polygon, here are some notable recent developments:
- MATIC to POL upgrade begins: A smart contract has already been deployed on the Ethereum mainnet to upgrade MATIC to POL, and this transition is an important first step towards the realization of Polygon 2.0.
- A step-by-step implementation of Polygon 2.0：Polygon 2.0 will not change everything at once, but rather the governance mechanism, staking layer, interoperability between chains, etc. will be implemented in stages. Attention is focused on the official announcement in the future.
- Continued growth of the ecosystem: In addition to partnerships with major companies, new games and DeFi protocols are being launched on Polygon every day. How rich the ecosystem becomes will be the key to its future potential.
Summary: Will POL be the key to supporting the future of the Internet?
This time, we provided a detailed explanation of the virtual currency POL (formerly MATIC), from its basics to its future prospects.
Let's review the key points.
- POL is the base currency of the Polygon network, which resolves Ethereum's "traffic congestion."
- The upgrade from MATIC is as the blockchain evolves from a single chain to an “ecosystem of interconnected chains.”
- It is being increasingly used in a variety of fields, including DeFi, NFTs, and games.
- The grand vision of "Polygon 2.0" holds the key to its future.
- Although there are many competitors, the company is differentiating itself through its unique multi-chain strategy.
The future that POL and Polygon envision is an ambitious one: to build the "value layer of the Internet." If this vision comes true, POL may become an essential part of the infrastructure of our digital lives. Of course, there are various challenges and risks along the way.
I hope this article helps you understand the fascinating project called POL. But one last thing.This article does not constitute investment advice.When investing in cryptocurrencies, be sure to do your own research (DYOR – Do Your Own Research) and do so at your own risk.
Frequently Asked Questions (FAQ)
- Q1: What will happen to my MATIC tokens?
- A1: It is expected that most major cryptocurrency exchanges will automatically swap MATIC for POL. If you have deposited your MATIC in an exchange, please follow the instructions from the exchange. If you have stored your MATIC in a personal wallet (such as MetaMask), you will be able to manually exchange your MATIC for POL through the official upgrade smart contract provided by Polygon. Be sure to check the official website for information and do not click on unofficial links in a hurry.
- Q2: Is POL a buy?
- A2: No one can say for sure. As explained in this article, the Polygon 2.0 vision has great potential, but at the same time there are risks such as price fluctuations and competition. You need to make a careful decision based on whether you believe in the project's future and your own risk tolerance.
- Q3: Where can I buy POL?
- A3: POL (or MATIC as it is currently traded) can be purchased on many major cryptocurrency exchanges around the world, including Bybit, Binance, Coinbase, Kraken, etc. Japanese exchanges may also start handling it as POL in the future.
- Q4: What is POL staking?
- A4: By depositing (staking) POL into the network, you participate in activities to maintain the security of the network and receive rewards (new POL) in return. It is easier to understand if you think of it as interest on a bank deposit. In the future, POL will introduce a more advanced mechanism called "restaking" that allows you to participate in the validation of multiple chains with a single POL token.