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From DAOs to synthetic assets, the Polygon network is full of projects trying to change the way we interact with the decentralized web. Let’s take a look at what Polygon is all about and some of the most popular projects on Polygon right now.

What is Polygon?

Polygon is a decentralized ecosystem of protocols that enables Ethereum to be scaled to thousands of transactions per second. Polygon also provides a wide range of tools and services for developers to easily build and deploy decentralized applications on Ethereum. Polygon’s native token, MATIC, is used to pay transaction fees on the network. Polygon launched in March 2021, bringing together the former Matic Network and Ethereum sidechain. The project has since been renamed Polygon.

There are some Ethereum-scaling solutions on Polygon. Some of which include:

• Polygon PoS: Polygon PoS is a layer 2 scaling solution that uses side-chains for transaction processing to achieve exceptional transaction speed and cost reductions. Likewise, POS protects assets via a decentralized network of Proof-of-Stake (PoS) validators and the powerful Plasma bridging framework. Polygon’s scalable proof-of-stake design compliments Ethereum’s decentralized security, allowing you to build applications that appeal to a broad audience while keeping decentralization’s potency.

• Polygon Hermez: The Hermez zk-rollup is a layer 2 architecture built on top of Ethereum that overcomes scalability issues by combining several transactions into a single transaction. To show and publicly record the authenticity and accuracy of the rolled transactions executed on the Ethereum blockchain, the “zero-knowledge proof” (ZK) technology is utilized.

• Polygon Edge: Polygon Edge allows you to create your blockchain network with a variety of features that you may customize. It is based on modular design concepts and enables Ethereum compatibility with your network.

• Polygon Nightfall: Polygon Nightfall is an Optimistic Rollup designed to make private transferring of ERC20, ERC721, and ERC1155 tokens more affordable. It employs an Optimistic Rollup to lower transaction costs and zero-knowledge proofs to ensure anonymity.

Some are still under development, like:

• Polygon Avail: Avail allows for modular chain design, with data ordering and availability handled by Avail in a variety of execution environments.

• Polygon Miden: Polygon Miden is an Ethereum layer 2 scaling solution. Miden uses zero-knowledge technology (zk-STARKs) to “roll-up” thousands of layer 2 transactions into a single Ethereum transaction, leading to increased throughput and lower transaction fees.

• Polygon Zero: Polygon Zero is an Ethereum layer 2 scaling solution. Plonky2, the ground-breaking prover system, which creates ZK proofs quicker than any other existing tech, is what sets Polygon Zero apart from other ZK scaling solutions.

Bella Protocol (BEL)

Bella Protocol is a platform that offers some DeFi solutions aimed at making crypto banking more accessible and straightforward. Co-founded in 2020 by Felix Xu and Yemu Xu, the protocol promises to improve the user experience by removing the high fees and delayed transaction problems that certain blockchain platforms might have, while also streamlining the process with its DeFi smart portal.

The BEL token is an important feature of the Bella Protocol ecosystem, as it functions as both a reward token and a voting token in the platform’s governance. BEL may be used to receive staking rewards, farm network fee rewards, and gain unique discounts on Bella protocol items.

In July 2021, Bella Protocol announced a partnership with Dinoswap (a cross-chain infrastructure platform that helps layer-one blockchains, AMMs, and partnered initiatives develop liquidity) which meant the BEL token migrated to the Polygon ecosystem. Bella can overcome the high fees, slow speeds, and poor UX of DeFi protocols on the Ethereum mainchain by switching to MATIC (the Ethereum token that powers the Polygon network), resulting in a full DeFi experience that is unmatched.

MANA

The MANA token is the native currency of the Decentraland platform. It is used to purchase land, goods, and services within the Decentraland virtual world. It is also used to pay for transaction fees on the Decentraland blockchain. Decentraland is a virtual world where users can buy, sell, or lease land. The land is stored on the Ethereum blockchain and each parcel of land is represented by a non-fungible token (NFT). Decentraland, co-founded by Ariel Meilich and Esteban Ordano, is a platform built for content creators, businesses, and individuals seeking a new artistic medium, business opportunity, or source of entertainment.

In April 2021, Decentraland announced a token bridge that would allow Decentraland’s dApps to conduct fee-free transactions on the Polygon network. The integration enables Decentraland to extend its services and give developers and users of the platform the speed, affordability, and usability needed to do basic, daily tasks.

Users may claim, buy, sell, and trade wearables fully through the Polygon platform. Through integration with crypto on/off ramp Transak, the platform also allows users to purchase MANA tokens directly with debit and credit cards on Polygon.

REEF

The REEF token is the native currency of REEF-chain, and it is utilized for liquidity, transaction fees, and governance. REEF (which stands for Reliable, Extensible, Efficient and Fast) chain is a DeFi, NFTs, and gaming-friendly layer 1 and EVM compatible blockchain. It’s fast, scalable, has minimal transaction costs, and doesn’t mine inefficiently. It is built with the Substrate Framework and has on-chain governance. It employs a consensus algorithm called Nominated Proof of Stake.

The Reef chain can run any DeFi protocol that has already been implemented on Ethereum or an EVM-compatible network with only a few code modifications. Reef ecosystem may be accessed by anybody with a Web3 wallet who is interested in accessing dApps on Reef since Reef Chain straddles this crossroads between Ethereum and Polkadot, as well as bridges to other blockchains.

GRT

The Graph is an indexing protocol that can be used to query networks such as Ethereum and IPFS. Anyone can create and publish open APIs, known as subgraphs, that make data more accessible. Participants use Graph Token (GRT) to assure the economic security of The Graph Network as well as the integrity of the data being queried. GRT is a work token that Indexers, Curators, and Delegators use to supply the network with indexing and curating services.

The Graph expanded its use case on Polygon with the launch of its billing contract for Subgraph Studio on Polygon (Developers can use Subgraph Studio to build, test, and deploy subgraphs, as well as manage their API keys). 

AAVE

Aave is a DeFi lending protocol. It’s a non-custodial, open-source money market platform that allows you to earn interest on deposits and borrow a variety of digital assets. AAVE functions as a governance token, providing owners a voice in the protocol’s future development. It also rewards holders with discounted platform fees. 

In 2021, Aave announced integration with Polygon. Polygon’s launch of an Aave market was important in kicking off the DeFi ecosystem and providing a stable source of liquidity for its customers. The implementation aims to create alternatives for DeFi apps that may be used by anybody, allowing users to take advantage of “nearly-free” transactions.

UMB

Umbrella network is the world’s first genuinely decentralized oracle, offering low-cost, massively scalable, and secure smart contract solutions. They give blockchain developers access to data that was previously unavailable to them and at a much lower cost than any other oracle in the business. The Umbrella Network’s decentralized power is based on the UMB utility token, which is used for staking, community voting, as well as rewards and incentives.

Since the launch of Umbrella Network on Polygon, a slew of dApps on the Polygon ecosystem have been able to integrate Umbrella Network’s data feeds directly into their smart contracts.

SFUND

Seedify is an Incubator and Launchpad for Blockchain Gaming. By staking $SFUND, you can purchase game tokens before the rest of the community, giving you an advantage in the play-to-earn era.

Its ecosystem also comprises Seedify NFT Space, the industry’s first gaming-and-metaverse-asset-centric NFT marketplace, as well as an NFT launchpad for gaming and metaverse assets.

They can give top-tier blockchain solutions, funding options, development support, and the capacity to produce games with excellent user experiences while optimizing ROI for project investors because of their integration with Polygon.

SHFT

The Shyft Network is a public protocol that checks for identity and power compliance in blockchain data. Shyft Network provides valuable user information that institutions may use to safeguard cryptocurrency while maintaining privacy by allowing the transfer of verifiable data across centralized and decentralized ecosystems. The Shyft protocol is powered by SHFT, a native token. The token serves as a payment method, a mechanism for linking value, and a tool for capturing value. The currency is used for data transfer and identification, and it also acts as a governance tool for ecosystem coordination. 

Shyft Network and Polygon have teamed up to provide an opt-in compliance infrastructure for decentralized finance (DeFi). Developers can integrate Shyft Network core contracts into their Dapps to enable Know-Your-Customer (KYC) and identity primitives, compliant asset pools, routed reputation and verification across Dapps, and comply with incoming Decentralized Finance and custodial and non-custodial FATF global guidance requirements, as well as comply with incoming Decentralized Finance and custodial and non-custodial FATF global guidance requirements.

KASTA

Within the Kasta ecosystem, KASTA is a cryptocurrency token with a wide range of applications and benefits. KASTA can be bought and sold just like another cryptocurrency. KASTA will play a critical part in Kasta’s growth and in realizing its aim of guiding the globe toward widespread cryptocurrency adoption.

Late last year, Kasta announced they have chosen Polygon to be the network in which they build their new era of decentralized open and borderless payments. The choice was based on the fact that Polygon network’s scaling solutions, lower fees, faster transaction throughput, and approach to decentralization.

Top Polygon Projects- Conclusion

Polygon network is becoming more relevant by the day due to its impressive scalability. It’s hardly surprising that several projects like Bella Protocol, Kasta, Aave, Decentraland, Shyft network amongst others are leveraging the versatility of Polygon network. 

Interestingly, many of these promising projects have tokens that can be exchanged on Swapzone. 

Swapzone is an instant exchange that offers increased liquidity, zero incidence of getting hacked, and transactions at the lowest fees possible.

Cryptocurrencies are some of the most volatile yet profitable assets in today’s world. Prices can go all the way up, giving investors and traders large returns on investment (ROI) margins. 

But they can also go down, causing millions of users to lose billions and even trillions of dollars of funds within a few hours.

So what influences the value of cryptocurrencies like Bitcoin? As with most markets where assets are sold, the crypto market and its prices are influenced by demand.

More demand means a higher price, and less demand signals lesser prices. However, there are a host of other factors that can affect the value of digital currencies, and in this article, we take a closer look at the most significant ones.

A Variety of Factors Can Influence the Value of Bitcoin and Other Cryptocurrencies 

No central authority backs Bitcoin or any cryptocurrencies the way fiat and other government-sanctioned exchange mediums are backed. Like Bitcoin, cryptocurrencies are generally decentralized, meaning they get their value from several other factors asides from demand or supply.

As a result, inflation rates, economic growth measurement tools, and monetary policy tools that influence the value of fiat don’t apply to Bitcoin. In essence, Bitcoin is more similar to a commodity that functions as a store of value which is why the following factors influence its prices and that of other digital assets:

• The news and social media
• Supply and demand
• Regulations and legal requirements on crypto sales and their use
• Cost of production (mining)
• The competition from other cryptocurrencies
• Availability on crypto exchanges
• Internal governance

Understanding the Value of a Cryptocurrency

A cryptocurrency’s value is generally the amount of fiat that buyers consider a fair equivalent for it. In summary, scarcity plays a big role in evaluating digital currencies. To understand the value of a digital currency, you’ll have to understand basic economic principles.

So if a cryptocurrency has a higher token supply but little demand from users and traders, its value will fall. However, if the supply of the said token is limited but with higher demand, its value should increase, all things remaining equal.

Cryptocurrency Supply and Demand 

An asset’s supply helps determine its price on the market. Scarce assets have a higher chance of having high prices, while those with more supply are more likely to have low prices.

For instance, Bitcoin has a fixed supply of 21 million BTC. While this figure is low compared to others tokens in the market, demand for Bitcoin has kept rising in recent years, driving its price to $68,800 in 2021. The sentiment of the public and the media also significantly influences the demand for cryptocurrencies. 

When high-profile support from top celebrities rallies toward a token, it creates a sentimental response among crypto investors and enthusiasts called FOMO (Fear Of Missing Out). The result is a high demand for that token and a corresponding price increase.

A good example is Elon Musk’s influence on the value of Dogecoin. The “Musk Effect,” as most people now call it, refers to the impact of the billionaire inventor’s words and tweets on the meme coin and the general crypto market.

All it takes is one tweet of the word, Dogecoin, and its value may rise by over 15% in a few minutes. Conversely, if a token gets negative publicity, expect the value to dip. Platforms or digital currencies that have suffered multiple hacks most suffer from this.

In the end, crypto demand and supply is one way of signaling that hype and human emotions heavily influence tokens’ prices.

Cost of Production

In the cryptocurrency space, new tokens are produced via mining—using computers to verify a blockchain’s next block. A decentralized network of active miners helps cryptocurrencies work as effectively as they do while earning a reward in tokens.

The job of verifying blockchain needs a lot of computer power, so miners buy expensive equipment and invest in electricity to mine. Even at that, there’s still much competition to be a miner as they compete to solve difficult math problems needed in verifying a block.

The more equipment needed for mining, the higher the mining costs and the higher the value of a cryptocurrency. It is important to note that miners only mine when the token’s value is high enough to counterbalance their costs.

Cryptocurrency Exchanges

All the top cryptocurrencies like Ethereum and Bitcoin trade on many different exchanges because these exchanges will typically list the most popular tokens. 

However, lesser-known altcoins and newer projects might only be found on specific exchanges, restricting new users and investors’ access to them. If more exchanges list a token, more investors might be willing and able to purchase it, thereby spiking demand and, subsequently, price. 

However, if a token is traded on a few exchanges, some investors might be wary of the spread the exchange takes because it will be bigger, leading to less demand and lower prices.

How To Find An Exchange With The Lowest Fees And The Best Rates For Your Transaction?

Finding the best suitable exchange for your transaction may be a challenge, however Swapzone made this process as easy as snapping your fingers.

Select the currency you’d like to send and what you’d like to receive. Swapzone will present you with the available platforms and their rates so you can choose what suits you best. You can see KYC and AML policies for each exchange; review their ratings and pros and cons.

Competition

The cryptocurrency space is filled with thousands of tokens. New tokens and projects launch daily because the barrier to entry is low for new entrants/competitors.

However, for a project to succeed and become valuable, it needs a strong network of people that use its token. The fastest way to have such a network is to create a token with useful applications on the blockchain.

And if a project betters the tech or idea of a competitor or even improves on its deficiencies. In that case, it will convert the competition’s value to its own, and eventually, its price will soar up from increased usage.

Internal Governance

Cryptocurrency networks typically do not rely on static rules to operate; rather, developers adapt projects based on the project’s community.

These decentralized networks keep running through governance tokens that give holders the right to decision-making through consensus among stakeholders.

How does internal governance affect a coin’s value? Investors prefer stable governance and consider projects where rapid changes are difficult to be valuable.

However, if the process of updating software to enhance protocols takes months to execute, this will affect stakeholders and interest in the token.

Regulations and Legal Requirements

Following several cyber attacks on blockchain projects, most countries have taken regulatory jabs at cryptocurrencies to prevent further loss of investors’ funds. 

Regulations make trading cryptocurrency legally much easier. Regulatory products like futures options or contracts help reduce volatility and aid price discovery.

However, regulations can prove detrimental to the demand for cryptocurrencies. If the rules changed against cryptocurrencies, their use, and investment, this could cause price dips.

The absence of regulations makes it difficult to prove and control issues like price manipulations in the market.

Finding Value in Cryptocurrency

Understanding the concept and principles of demand and supply and how scarcity comes into play may be the defining factor in your success as a crypto investor.

Investors that believe demand will rise for several verifiable reasons will profit from the bullish trends of the coin involved. However, it all boils down to early information. 

For instance, when a project announces a major partnership with a leading brand, its value will rise. Suppose you get the information before it goes public and buy into the token; it means you have a higher chance of getting a good ROI from the deal.

Nonetheless, do not consider this or anything in this article as financial advice. Also, always exercise caution as governments’ regulatory practices for cryptocurrencies can be harsh and sudden, making investment risky and extremely volatile.

Can Cryptocurrencies be Overbought or Oversold?

While a token’s purpose and usefulness are important factors when looking for cryptocurrencies to invest in or buy. 

This factor sometimes becomes secondary to primary factors like FOMO, endorsement by public figures, trends, and media & press recognition in final investment decisions. Due to these factors, some tokens experience massive growth despite their inherent value. 

An oversold token is simply trading below its true value, so its supply is less than its demand. An overbought token is trading above its true value, with demand greater than supply.

People who find it hard to justify the high price of an asset describe it as overbought, and this is because traders rush to buy such assets.

When supply can’t keep up with demand, the price shoots up expectantly. However, others who consider an asset is trading higher than its true value might see its hype as misplaced and the investment as unreasonable.

On the part of oversold assets, little interest in it will cause demand and price to rise. And if the prices are really oversold, a smart trader could buy some of the coins and make a profit when the prices correct in the market.

Versatility vs. Equilibrium in Cryptocurrencies

If supply equals demand in any market, you have equilibrium and balance in the market. Such a market is stable and free of volatility.

However, away from economic theories, no market is ever in total equilibrium in the real world, and the same goes for the relatively new crypto market.

Despite this, volatility is one exciting feature of the cryptocurrency market because it increases the stakes for traders.

And like in business, a market characterized by rapid price movements presents high risks and promises higher rewards.

How Accurate Are Cryptocurrency Price Predictions?

You can’t accurately predict traditional markets, and neither can you guarantee the future prices in the cryptocurrency market.

Price predictions usually brother on the extreme, and some leave little to desire. Apart from regulatory concerns, this is one of the several reasons we don’t give financial advice on Swapzone.io.

Some experts like John McAfee and Jimmy Cramer have made some price predictions considered outrageous in recent times.

Some others, like GP Bullhound, have foreseen a total market collapse. Roy Sebag of GoldMoney Inc. even said bitcoin would have a worth of $0 in the future.

The lesson from these predictions is that they should not be the only yardstick you base your expectations and investment decisions on. 

As always, look out for other telling signs like regulations, increased crypto adoption, the rise of utility tokens in solving real-world issues, and the growth of the futures market.