Key Takeaways:
- Polygon (MATIC) acquired Mir Protocol to build Polygon Zero.
- MATIC prices jumped 12.25% on Friday.
NEW DELHI (CoinChapter.com) — Ethereum scaling solution Polygon continues to expand its scaling capabilities with the acquisition of Mir, a zero-knowledge-proof project.
Polygon announced the acquisition during its ZK Day event on Dec 9. The Mir deal would be worth $400 million in MATIC tokens. Per Polygon’s announcement, Mir would help develop the Polygon Zero project, an Ethereum compatible ZK Rollup.
Zero-knowledge (ZK)proofs allow external validators to verify encrypted transactions without handing over sensitive private information. They are useful in complex DeFi applications that handle users’ private data, such as names, addresses, credit card details, etc.
Mir specializes in ZK rollups that bundle multiple transactions into one big transaction. Hence, transaction processing doesn’t require all transaction data posted on Ethereum, helping reduce the block space and gas fees while enabling scaling.
Mir has developed two subcategories of Zero-knowledge proofs – PLONK and Halo. PLONK requires a trusted setup for validation. Halo, on the other hand, has a more decentralized approach. Furthermore, both PLONK and Halo do not compromise on transaction speed, generating proofs in seconds to ensure faster transactions.
Also Read: MATIC moons over 43% in just two days on Polygon $50M-150M investment FOMO.
Polygon uses sidechains to help accommodate more transitions on the Ethereum blockchain. However, Polygon’s move to include Zero-knowledge algorithms on its platform highlights its plans to widen the project’s scaling solutions. Moreover, the ZK rollups can translate to the upcoming Ethereum 2.0 upgrade.
Ethereum 2.0 aims to solve Ethereum’s congestion and gas fees problems.
The $400 million funds come with a vesting period of three years. As such, the Mir team would withdraw the funds based on deliverables.
Polygon Price Charts
Polygon’s native token MATIC fell 13.87% intraday. However, prices picked up today, probably reacting to the news of the Mir acquisition. MATIC’s price movement continues moving in an ascending parallel channel, with the ascending trendline support tested on Dec 4 before prices recovered.
The Polygon token jumped over 12% on Friday, going from a low of $2.04 to reach a high of $2.29. Moreover, MATIC’s upside movement has been halted three times in the past three weeks, indicating retail traders are looking to make profits as prices move upwards.
Interestingly, after every pullback, MATIC prices have registered higher highs, indicating bulls are buying the dips. At present, Polygon has immediate resistance at $2.34. A move above immediate resistance would bring prices at $2.5, near MATIC’s previous swing high.
Moreover, if Polygon follows its past trend of charting higher highs after a pullback, MATIC could challenge resistance at $2.66 before pullbacks occur. Meanwhile, support for the Polygon token is at $2.04. Further sell-off could see prices moving downwards towards support at $1.95.
Also Read: MATIC price jumps 27% after 21shares lists Europe’s first Polygon ETP.
Polygon also has support from its 50-day MA trendline, near $1.82. Meanwhile, the relative strength index continues to be neutral for MATIC, clocking 58.23 on the daily charts. In addition, momentum oscillator MACD continues to be bullish but with contracting bars on the MACD histogram.
The histogram charts the difference between the MACD line (difference between 12-day and 26-day) and its signal line (9-day EMA of MACD). Declining bars indicate the MACD line is moving downwards towards its signal line.
At the time of writing, MATIC was trading at $2.18, up 4.74% on the day.
