Top Protocols on Polygon (MATIC)
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Polygon is a layer-2 solution based on the Ethereum network, and it hosts more than 37,000 decentralized applications (apps) despite the fact that it accounts for just 2% of the Total Value Locked in the DeFi Sector. This project has attracted traditional companies such as Nike and Reddit. The native token for this protocol is MATIC, and it is used for the payment of fees, staking, and network governance.
Making up just 2% of the total value locked (TVL) in the DeFi sector could be a bit discouraging, but as the project grows, that narrative will change. Already, Polygon is seeing impressive growth in the number of users, which will eventually cause the TVL to grow.
What is Polygon (MATIC)?
To solve Ethereum’s key scaling and transaction cost issues, Polygon (MATIC) came in as a Layer-2 scaling mechanism built on top of Ethereum. The Polygon sidechain functions in tandem with the Ethereum network. By connecting crypto assets to Polygon, users may interact with a variety of well-known crypto apps that were previously limited to Ethereum, but with faster transactions and lower fees.
In addition, Polygon makes use of scaling strategies such plasma chains, zk-rollups, and optimistic rollups as well as the proof-of-stake mechanism. The primary goals of Polygon are to increase the Ethereum network’s speed, security, and effectiveness.
Top dApps on Polygon (MATIC)
Top Protocols on Polygon by Total Value Locked (TVL):
Uniswap (Version 3)
Uniswap is the largest Decentralized Exchange platform based on trading volume. It is an Automated Market Maker that uses standard crypto-pair pools. 2018 saw the introduction of the initial version. In 2021, six chains gradually adopted the most recent version of V3, which includes Polygon. In the most recent version, concentrated liquidity and numerous fee categories were included, allowing liquidity providers to control capital allocation and reduce risk. The Version 3 platform, according to Uniswap, offers up to 4000x more capital efficiency than its Version 2 equivalent, resulting in higher returns and less price slippage.
The Total Value Locked is currently standing at $2.71 billion.
Aave (Version)
Aave, a decentralized lending platform, was introduced in 2017. It allows users to lend and borrow digital assets without having to take possession of them. Eight different chains, including Polygon, provide Aave Version 3, the most recent version. The Version 3 version considerably enhances borrowing services and yield generation by integrating cutting-edge technologies.
- By ensuring smooth liquidity movement across all supported networks, the Portal function enables authorized bridges to transfer assets between Aave V3 markets.
- The Efficiency Mode paves the way for high-leverage forex trading and effective farming by optimizing borrowing power for correlated assets (like stablecoins).
- By confining collateral to a single asset and strengthening risk management, isolation mode makes it possible to list new assets as isolated.
Aaves Total Value Locked (TVL) on the Polygon network is $180 million.
Curve Finance
Going by the size of Total Value Locked (TVL), it is the largest. It has roughly $4.3 billion in locked pools. Curve Finance is an AMM trading platform that focuses on stablecoins like USDC, USDT, DAI, BUSD, and TUSD, as opposed to Uniswap or QuickSwap, though it also accepts Ethereum derivatives.
Thanks to a special pricing algorithm, Curve makes effective token swaps possible at cheap prices and with little perceptible slippage.
The native token (CRV) of Curve encourages the provision of liquidity and grants holders the chance to take part in governance. Due to Curve’s enormous liquidity, rival DeFi programs such as the lending platform Compound or the yield farming protocols Convex Finance and Yearn Finance cannot compare to Curve.
Convex Finance
Convex Finance (CVX) boosts benefits for Curve Finance liquidity providers and CRV token owners. By combining resources and obtaining CRV to convert it into veCRV, which can increase CRV payouts for Curve LP token holders, it streamlines staking and increases rewards.
The native coin for Convex platform fees and rewards is called CVX.
Convex supports several Curve liquidity pools and offers a number of different revenue streams, including base rate interest, a cut of trading commissions, Convex-boosted CRV awards, and CVX tokens through liquidity mining.
Additionally, customers can stake their CRV tokens on Convex to get cvxCRV tokens, which give them access to veCRV rewards, Convex platform earnings, CVX tokens, and airdrops.
Conclusion
Ethereum now offers a revolutionary layer-2 scaling solution through the innovation of Polygon (MATIC). Polygon has gained popularity among both users and developers due to its sidechain design and integration of several scaling options.
By market cap, the MATIC token has consistently ranked between the top 10 and top 15 largest cryptocurrencies. The coin trades at $0.60 with a market cap of $6 billion as of mid-June 2023, which is its lowest price in almost a year. Those who think Polygon will eventually outperform Ethereum may see this as a golden opportunity and take advantage of it.
