1 reason polygon is a screaming buy today

Editor’s note: This article has been corrected. The OnChain US Government Money Fund was launched in 2021 on the Stellar blockchain. It is not listed on Nasdaq.

It may be a cliché, but the future of finance and investment is here. In the past year, several advances have been made to blend processes with traditional finance and the capabilities inherent in decentralized finance (DeFi) and blockchain technology. And just this past week, another step forward was made.

On the 26th of April Franklin Templeton (LEGS)the 15th largest investment firm in the US, said it would tokenize its OnChain US Government Money Fund on Polygon (MATIC) blockchain. The fund was launched in 2021 on the Stellar blockchain and is now also supported on the Polygon blockchain.

Let’s break this down to understand the relevance of this decision.

The mix of blockchain and traditional finance

First, tokenization: This is the process of converting real-world assets or rights into digital tokens that can be traded on a blockchain. Essentially, tokenization creates a digital representation of an asset that can be easily exchanged using a blockchain.

This process is getting a lot of attention in the financial industry because it can potentially make asset trading more efficient and accessible. For example, real estate, art, and even commodities like gold can be tokenized, allowing for shared ownership and trading.

Tokenization enables easier access to investments that may have been out of reach for some investors, as the minimum investment requirement for some assets is often quite high. Tokenization can also potentially reduce the time and costs associated with traditional asset trading processes, such as the use of intermediaries such as brokers and banks.

Likely due to a combination of these reasons, Franklin Templeton decided to tokenize the fund (the first here in the US) so that it could expand its reach and enable the fund “to be further compatible with the rest of the digital ecosystem,” it saw.

Polygon becomes a crowd favorite

While the move to tokenize the OnChain Money Fund is groundbreaking, the real news here is that Franklin Templeton chose Polygon.

This is now the second time in the past year that a major financial institution has used Polygon’s blockchain for traditional financial operations. The first was in November 2022 then JPMorgan Chase conducted an experiment to see if it could tokenize Japanese yen, Singapore dollars, and bonds from those countries for cross-currency trading. It ended up being a resounding success and a world news.

Now, Polygon is once again at the forefront of the convergence of traditional financial processes and blockchain technology. The reason these companies choose Polygon is relatively simple: It does Ethereum faster and cheaper to use without sacrificing decentralization and security.

The perfect sidekick

Over the years, Ethereum’s popularity has exploded, and as such, crypto has essentially become the primary choice for companies looking to build new blockchain-based business models. However, due to this popularity, Ethereum’s speeds have slowed and fees on the network often rise during heavy usage.

Polygon remedies this. It is known as a Layer-2 blockchain because it processes transactions on its own blockchain and then settles them on Ethereum. With this approach, users effectively get the best of both worlds.

Because of this, Polygon has become the go-to not only for traditional financial institutions looking to embrace tokenization, but also for retail and consumer brands looking to build new blockchain products as trends surrounding what is known as Web3 continue to grow.

Companies such as Starbucks, Nikeand Coca Colato name a few, all have used Polygon’s blockchain to create new products such as non-fungible tokens (NFTs) as a way to tap into more tech-savvy consumers and digital-based commerce.

For investors looking to capitalize on the rapidly growing sectors of Web3 and the convergence of traditional finance and blockchain, Polygon is the one clear front-runner worthy of your money.