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Why Polygon Is Soaring Today

By Zhiyuan Sun – Aug 13, 2021 at 1:55PM

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The big idea behind this popular token is slowly living up to its hype.

Polygon (MATIC -2.24%) tokens are up 12.77% to $1.44 apiece as of 10:30 a.m. EDT on Friday. The day before, Rario, a licensed non-fungible tokens platform focused on the sport of cricket, launched via integration with Polygon Studios, the blockchain foundation's new hub for NFTs and gaming.

NFTs were virtually unheard of not that long ago, but they have skyrocketed to over $2.5 billion in sales thus far this year.

Illustration of people visiting an NFT CryptoArt display in an art gallery.

Image source: Getty Images.

So what

Founded in 2017, Polygon is one of the largest Internet of Blockchain (IoB) networks based on the Ethereum platform. Using Polygon, developers can create stand-alone chains to power their infrastructures, such as apps and software. Projects utilizing Polygon's architecture include NFTs, sports betting apps, decentralized games, online casinos, and more. Over 100,000 gamers and 500 decentralized apps have already joined its Polygon Studio platform. 

MATIC tokens are used to settle transactions on these side chains. One possible integration in the future is for the network to partner with an oracle network such as Chainlink. This would allow its infrastructure to access real-world APIs and possibly expand into apps such as finance.

Now what 

MATIC tokens have had a fantastic run-up. They are up a stunning 31,926.75% since their inception in 2017. Despite not having major partnerships, Polygon's market cap has ballooned to $14.4 billion, indicating investors expect a lot out of it. However, keep in mind that it faces intense competition. For starters, decentralized gaming platforms such as Roblox could use their own tokens (i.e., Robux) and bypass the need for an intermediary. In addition, Polygon is not all that different from other IoB networks such as Polkadot and Avalanche. I would, ironically, wait to see the network becomes more non-fungible than that of its competitors before making an investment.  

Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Ethereum. The Motley Fool has a disclosure policy.

Stocks Mentioned

Polygon Stock Quote
Polygon
MATIC
$0.90 (-2.24%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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