Polygon (MATIC) Fell 17% Today as Crypto Market Slips
KEY POINTS
- Polygon developers announced a new programming enhancement they're testing called "Avail" that's intended to help larger blockchains scale and work together using a novel, modular approach.
- Polygon's blockchain is Ethereum-compatible -- driving faster settlements of greater volume at cheaper prices on and off the ETH platform to speed transaction clearance.
- The MATIC coin is used for governance rewards and to pay fees across Polygon's proof-of-stake (PoS) network. At time of writing, MATIC was down as much as 17% over the past 24 hours to a price of $0.4224 per coin, according to CoinMarketCap.
The surprising price action follows a Polygon testnet upgrade to make "monolithic" blockchains more scalable and modular.
Blockchain upgrade news from the Polygon (MATIC) team seems to be landing with a thud this morning as the MATIC coin dropped more than 17% to a low of $0.4224 in intraday trading before regaining some ground, according to CoinMarketCap. The downward price pressure for the Ethereum-compatible blockchain's coin across cryptocurrency exchanges is surprising given the positive nature of the news.
Polygon is testing new Avail upgrade to help bigger blockchains
Polygon's announcement seems like it would be a bright spot for the crypto space, which has been rife with negative media reports of scams, hacks, and layoffs in recent weeks. The developers of the Polygon project said they are rolling out a system-wide enhancement named Avail, short for "available," that will enable larger smart-contract blockchains -- such as Ethereum -- to be able to quickly scale and operate across other networks.
Polygon's blockchain uses a modified proof-of-stake (PoS) process to approve transactions, which is widely thought to be more energy efficient than the proof-of-work (PoW) model currently used by both Ethereum and Bitcoin.
The PoW model requires large amounts of electricity to run the computing power and cooling requirements necessary to settle transactional outputs. The Polygon website claims that its blockchain can process up to 65,000 ETH-based transactions per second with settlement times less than two seconds for less than the price of a penny gumball.
Is Polygon a buy?
For background, the MATIC coin reached its peak price of $2.92 on Nov. 27, 2021, and today's lowest intraday price marks an 85% decline from that top. Each investor should conduct their own research and determine their own investment risk level. This is not financial advice, merely an opinion based on observation. However, this latest positive news and discounted pricing certainly make Polygon worth a look in a currently uncertain and volatile crypto market.
Our Research Expert
Tor Constantino is a corporate communications executive and business writer with an MBA. Since 2017, he has written about cryptocurrencies, blockchain, and crypto's potential to revolutionize finance. His writing has appeared in outlets including Entrepreneur, Forbes, Fortune, CEOWorld, and Yahoo!.
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