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HomeAltcoins NewsMATIC Up 23.5% thanks to hype over Polygon’s upcoming zkEVM announcement

MATIC Up 23.5% thanks to hype over Polygon’s upcoming zkEVM announcement

On Monday (July 18), Polygon’s (MATIC) token is trading above $0.92, surging over 23% in the past 24-hour period, (at least, partly) thanks to two pieces of very bullish news.

What Is Polygon (MATIC)?

Polygon is “a decentralised Ethereum scaling platform that enables developers to build scalable user-friendly dApps with low transaction fees without ever sacrificing on security.” The Polygon Lightpaper describes Polygon as “a protocol and a framework for building an connecting Ethereum-compatible blockchain networks.”

On 18 May 2021, Independent Ethereum educator, investor and advisor Anthony Sassano took to Twitter to clear up some of the confusion around Polygon (e.g. some people refer to Polygon as a sidechain to Ethereum, while others call it an L2 blockchain). Below are a few highlights from that Twitter thread:

  • There is the Matic Plasma Chain and the Polygon PoS chain. The vast majority of the activity is happening on the PoS chain.
  • The PoS chain is what people refer to as a ‘sidechain’ to Ethereum because it has its own permissionless validator set (100+ who are staking MATIC) which means it doesn’t use Ethereum’s security (aka Ethereum’s PoW).
  • The PoS chain goes beyond a standard sidechain and actually relies on and commits itself to Ethereum (what some people may call a ‘commit-chain’). It relies on Ethereum because all of the validator/staking logic for the PoS chain lives as a smart contract on Ethereum.
  • This means that if the Ethereum network went offline, the Polygon PoS chain would also go offline. Secondly, the PoS chain actually commits/checkpoints itself to Ethereum every so often.
  • This has 2 benefits: it provides Ethereum-based finality to the PoS chain & it can help the chain recover in case of catastrophic event. This also means that Polygon is paying Ethereum to use its blockspace (in ETH) & paying for it to secure the contracts & checkpointing.

Furthermore, Sassano took this opportunity to talk about the two bridges that exist between Ethereum and Polygon:

  • There are 2 bridges – the Plasma bridge which is secured by Ethereum and the PoS bridge which is secured/operated by the PoS chain validator set.
  • Of course, for the PoS bridge, 2/3 of the validators could theoretically collude and try to steal the bridge funds but there’s $3.4 billion at stake so this is risky. If this attack did happen, the checkpointing & social coordination could be the only recourse.

He also commented on multi-sigs for Polygons contracts:

  • “The multi-sigs exist to allow the contract to be upgraded in case of a bug/exploit which is a practice used by many existing projects (especially those within DeFi).
  • However, Polygon’s multi-sigs are 5 of 8 which is definitely not ideal and not decentralized and the plan is to greatly improve this in the near future.

Finally, he said that Polygon is “committed to building & deploying L2 solutions like rollups in the future” and this is what he is “most excited about.”

$MATIC’s Price Action

According to data by TradingView, in the past five-day period, on crypto exchange Coinbase, the price of $MATIC has gone from $0.5556 to 0.9162, which is a gain of 64.90%. Currently (as of 3:25 p.m. on July 18), $MATIC is trading around $0.9447, up 23.5%.

Source: TradingView

What Has Been Driving $MATIC Price Higher in Past Five-Day Period?

On July 13, Polygon announced that “it had been chosen to be a part of the Disney Accelerator program.”

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