Polkadot and Polygon are amongst the top 20 cryptocurrencies by market cap and are both popular.
In this new series, we compare some key crypto assets and how they have fared recently. While doing so, we ask this question – if an investor has Rs.1,000 to spare today, how can he/she allocate the capital between these assets? Today, we aim to compare Polkadot (DOT) and Polygon (MATIC). Polygon and Polkadot both use PoS (Proof of Stake) consensus to address and resolve the current issues with leading cryptocurrencies. However, one of them might be better than the other. Let’s see who wins between Polkadot (DOT) and Polygon (MATIC).
Polkadot is a next-generation blockchain protocol that connects various specialized blockchains into a single integrated network. Polkadot essentially functions as a “relay chain.” The “hub and spoke” structure provides additional benefits to the smaller blockchains connected to the relay chain.
Polkadot can process many transactions on multiple chains concurrently, eliminating bottlenecks that exist on leading networks like Bitcoin and Ethereum. This parallel processing power offered by Polkadot improves scalability significantly and creates the ideal conditions for increased adoption and future growth. DOT is the network’s native coin. It aims to resolve many of the current limitations of blockchains, such as scalability and security. With a market capitalization of $17 billion, DOT functions as a solution that combines the distinctive features offered by the Polkadot ecosystem. It reached its all-time high in November 2021, with a price of $55.
DOT holders govern their networks as they see fit. Further, they have a visible stake in the future of Polkadot’s network governance as a whole. They can also optimize the governance of their blockchain to their specific needs, experiment with new ideas, or swap in pre-built modules for faster deployment. Using the PoS (Proof of Stake) consensus, Polkadot can currently process over 1,000 transactions per second. Today, DOT is ranked 14th with a price of $17.6.
Polygon is a layer-2 network. Layer 2 is an add-on layer to Ethereum that does not seek to alter the original blockchain layer. In simpler terms, using the Polygon platform, developers can optimize their Ethereum projects by increasing the project’s flexibility, scalability, and sovereignty while still accessing the security, interoperability, and structural benefits provided by Ethereum.
Polygon was created in India in 2017, it was originally known as the Matic Network. The native cryptocurrency of Polygon is MATIC. MATIC’s transaction costs and throughput are significantly lower than Ethereum’s. Polygon is a viable Ethereum killer with a transaction rate of up to 65,000 per second.
Polygon achieves faster transactions at a lower fee by using the Proof-of-Stake (PoS) consensus. The surging popularity of NFTs and play-to-earn (P2E) games is also boosting the popularity of MATIC. MATIC hit its all-time high of $2.9 in December 2021. From a market capitalization of $81 million at the beginning of 2021, MATIC has risen to a market capitalization of $10.4 billion today.
Polygon vs Polkadot: Verdict
Recent performances of MATIC and DOT v/s ETH
Source: TradingView, Binance
Polkadot’s flexible and adaptive network architecture facilitates the addition of new technology, allowing developers to benefit from the scalability, interoperability, and security provided. Therefore, Polkadot allows developers to build a new blockchain from scratch.
On the other hand, MATIC, being an ERC-20 token, is expected to see a rise in its popularity and use cases with the increasing popularity of NFTs and P2E games.
In 2022, MATIC has underperformed ETH by a larger margin, losing 35% in value compared to DOT’s 20%. How this can be interpreted remains up for debate – perhaps MATIC is at a great buy price given its dip compared to ETH. or perhaps DOT has shown strength that can carry it forward for the rest of the year.
Both Polkadot and MATIC are promising altcoins, and with regular upgrades, both are expected to soar high in the future. To answer our question – we believe that investing a 50% share in each is ideal.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.