Polygon's MATIC price corrects 10%; may cross $5 if broader market stays favourable, experts opine

Polygon's MATIC value on Saturday went down by 10% at Rs 156 after rising by more than 40% this week. This is because the broader market prices have fallen after the founder of Evergrande, China's property developer, was summoned after the statement being issued that the company might not have sufficient funds to meet its financial obligations.

"Based on certain indicators trading in MATIC is an uptrend. But it will also depend on the broader market. Crypto market as a whole has seen a fell off this morning and this is linked to information about Evergrande, liquidity tapering and even the new Covid variant. If the market restores it upward trajectory MATIC will see upward trajectory," said Gaurav Dahake, Founder and CEO of Bitbns and BACC member.

The token is currently trading at Rs 156, after touching the high of 188 on Friday. The expert says its value can cross $5 if the broader market stays favourable.

"As demand for Ethereum grows, projects such as MATIC that help scale the network are expected to disproportionately gain in the mid-term at least until Ethereum 2.0 is launched. MATIC has potential to eventually cross $5 per token as long as market conditions remain favourable and the demand for Ethereum surges," said Vikram Subburaj, co-founder and CEO of Giottus Cryptocurrency Exchange.

Polygon Network is the biggest sidechain on Ethereum network.  It is backed by Binance and Coinbase.

Recently US-based billionaire entrepreneur Mark Cuban, one of the main investors on the reality TV show, 'Shark Tank', also invested in the technology firm.

It is a home-grown company with Indian founders, including Jaynti Kanani, Sandeep Nailwal and Anurag Arjun.

"It is a chain with very high total value lock, strong developer community and stronger than some of the ecosystems like Solana and Luna in terms of how much is the total value lock versus what is the current market cap of the total," said Dahake.

Polygon's MATIC rose last week on the back of implementation of Miden, a ZK-rollup solution that helps scale the Polygon Network with zero knowledge proof (ZK).

Recently Polygon acquired Hermez Network in August which had the technology and know-how of a ZK-rollup.

A zero-knowledge solution helps in verifying data privately without revealing it to a third party.

"Miden helps in scaling the Ethereum network that has been recently plagued by issues of high fees and low transaction rate. ZK rollups will eventually help smart contracts on Ethereum to achieve faster performance at lower costs. Polygon has committed more than $1 billion to such projects and this successful implementation in the short time has given the token a strong fillip in the marketplace," said Subburaj.

India's Stand on Crypto

After several flip-flops over the issue, the government has listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in the ongoing winter session of Parliament.  

The central government has proposed to establish a "facilitative framework for distributed ledger technology", which has to be taken up by the cabinet shortly.

The Bill proposes to prohibit certain usuage such as "currency substitutes or as payment systems or for remittances", according to official sources in the know of the matter.

Also Read: Bill on cryptocurrencies on anvil, set to go to Cabinet shortly, says FM Sitharaman