The speed of the crypto industry has rapidly grown since 2020. Instead of considering them as Ponzi schemes or the Dutch Tulip bubble, institutional investors have joined retail users to pour massive money into digital assets.
Simultaneously, the Defi boom the same year as the NFTs and GameFi projects increased in popularity in 2021.The use-case of digital assets extended and created valuable sectors for market participants to thrive. Consequently, as adoption has been continuously surging – even amid the current bearish market conditions – it’s not surprising to see prominent non-crypto players gain exposure to digital asset investments or collaborate with industry projects.
Regarding the latter, the layer-2 Ethereum scaling solution Polygon was recently selected as one of the six participants for Disney’s 2022 Accelerator program, fueling a significant surge in the price for the project’s native MATIC token.
In this article, we will explore Polygon’s Disney initiatives and how they impacted MATIC’s price, along with a quick recap of the project.
Recap: Polygon (MATIC)
Founded in October 2017 and formerly known as Matic Network, Polygon is an ecosystem of decentralized scaling solutions focused primarily on achieving high throughput with cost-efficient and rapid transactions on Ethereum’s second layer (L2).
As you may already know, based on the concept of the blockchain trilemma, distributed ledger networks can only achieve two of the following three qualities: security, decentralization, and scalability. Since Ethereum’s developers put the primary focus on the first two properties, the leading smart contract chain is limited in terms of throughput.
While the Merge, an event that comes with a shift from the mining-based Proof-of-Work (PoW) to the energy-efficient Proof-of-Stake (PoS) consensus mechanism, is right around the corner, it will only establish the framework for future upgrades without significantly impacting the network’s throughput. For that reason, Ethereum won’t be able to solve its scalability issue until at least a year or two when sharding chains will be rolled out.
Until then, highly scalable L2 chains like Polygon will provide an efficient alternative for users to gain exposure to DeFi services, NFTs, Play-to-Earn games, and other cryptocurrency services at inexpensive fees and near-instant settlements. Currently, Polygon POS’ is up to 7,000 TPS,a rapid transfer with a 3-second confirmation time costs roughly $0.001.
Polygon POS operates as a Plasma chain with an architecture that allows it to leverage Ethereum’s security while achieving high throughput. In addition to POS, the project has additional scalability solutions under development, such as the Zero-Knowledge (ZK) roll ups Miden,Zero, zkEVM, and Nightfall.
Interestingly, while Polygon POS was one of the first layer-2 Ethereum scalability solutions to launch its mainnet in June 2020, the project has since managed to maintain its leading position among L2 chains despite new competitors joining the race.
According to DeFi Llama, Polygon accounts for 2.07% of the entire decentralized finance market with a $1.8 billion share. Arbitrum, which ranks second among Ethereum layer-2 solutions, has over twice less TVL ($871 million) than its competitor.
Furthermore, there have been quite some developments around the project this year.
In addition to making some big announcements about new scalability solutions and the upcoming Polygon ID privacy-focused Web3 identity platform, the project launched the Supernets chain in April. The service allows developers to build their own blockchain-based solutions in a customizable environment without hosting or operational costs.
Moreover, Polygon raised $450 million in February when it partnered with Coca-Cola and Reddit to collaborate on NFT initiatives and onboarded 48 non-fungible token projects from Terra’s collapsed ecosystem in July.
Polygon, MATIC, and Disney’s Accelerator Program
While Polygon had its share of positive news for its community this year, probably its most high-profile event was when Disney selected the project as a participant in the media and entertainment giant’s 2022 Accelerator program.
On July 13, Disney published a statement on its website, announcing the names of the six companies chosen to join the 2022 Disney Accelerator.
In short, the entertainment firm’s initiative is a business development program designed to accelerate the growth of innovative projects. As part of this year’s Accelerator, each participant will receive guidance from Disney’s senior leadership team and a dedicated executive mentor.
In addition to connecting them with “the creativity, imagination, and expertise” of the host, Disney will work along with the projects to “help develop new technologies and storytelling canvasses to create connected experiences across physical, digital, and virtual worlds.” Furthermore, the program will provide participants with additional investment capital, and access to co-working space at Walt Disney’s campus in Los Angeles.
Interestingly, Disney focuses on candidates working to build immersive experiences with technologies like augmented reality (AR), NFTs, and artificial intelligence (AI) characters. For that reason, while Polygon is the only one that operates its own (layer-2) blockchain network, there are multiple Web3 platforms among the program’s participants, including the social app Flickplay and the creator-focused cultural hub Lockerverse.
As it is the 49th most valuable company in the world, collaborating with Disney has created tremendous hype around Polygon. Consequently, MATIC surged from $0.532 on July 13 to as high as $0.977 by July 18, representing an 83.5% ROI in less than a week.
Thriving in a Bear Market
From raising funds from VCs and developing new L2 solutions for Ethereum to partnering with Coca-Cola and Reddit, as well as onboarding numerous NFT projects from Terra, Polygon has been having an excellent year in 2022.
Out of all events this year, the project’s participation in Disney’s 2022 Accelerator program was the most significant, facilitating a bear market-defying bull run since mid-July.
As its ecosystem is developing rapidly, we are excited to see what Polygon will be able to achieve in the layer-2 scalability scene for the rest of the year.