Ethereum and ZK Rollups may make Polygon one of hottest cryptocurrencies of 2023
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Polygon arrived in the blockchain world intending to offer scalability for Ethereum (ETH) transactions. With it, investors who want to have the security of the main altcoin on the market, but still pay low transfer fees, achieve their goals.
In this sense, Polygon established itself as the main Layer 2 network this year. However, this does not mean that its solutions cannot be further developed and improved in 2023.
With the high demand for assets that offer scalability for smart contracts, the performance of MATIC, Polygon’s token, could be even better in the coming year.
Ethereum can help Polygon grow
In 2023, yet another major upgrade to the ETH network is expected, the Surge. This upgrade will help the smart contract platform to scale, without affecting its decentralization.
Scalability will come as Ethereum validators will no longer need to store the entire cryptocurrency database. As a result, storage costs will be lowered.
This year, it became clear that blockchain projects revolving around the Merge — the update that brought proof of stake (PoS) to ETH — grew. A good example of this is the capitalization increase of Lido DAO (LDO), which experienced 300% growth between July and September 2022.
If the scenario repeats itself, assets that are part of Layer 2, such as Polygon, may grow a lot and MATIC may become the leader in this segment. After all, its network has already gained the trust of investors in the blockchain industry.
Security and privacy
Another industry that is growing, albeit modestly, is ZK Rollups. For those unfamiliar with the term, ZK Rollups is a Layer 2 blockchain protocol that processes transactions, performs computations and stores data off-chain while holding assets in an on-chain smart contract.
This concept manages to prove data without the need to reveal information that is not relevant to a transaction, thus helping to maintain the privacy and security of those involved in a cryptocurrency transfer.
In this arena, Polygon is a highlight with its zero-knowledge proofs aggregating multiple off-chain transactions into a single on-chain transfer. Furthermore, cryptocurrency ZK reduces the computational cost of generating validation proofs.
This shows how the Polygon team is committed to creating solutions for various issues, standing out for its ability to solve real problems and not invented without demand. Undoubtedly, this is another positive point for the price of MATIC in 2023.