Layer 2 scaling resolution Polygon has maintained robust community exercise even because the broader cryptocurrency market and its native token, MATIC, skilled a downturn within the second quarter of 2024, in response to a brand new report from market intelligence platform Messari.
Polygon Weathers Crypto Market Downturn
Whereas MATIC noticed a 44.3% drop in its circulating market cap to $5.5 billion over the quarter, putting it because the twentieth largest crypto asset (presently on the twenty sixth place), the protocol’s on-chain metrics remained robust.
That is in distinction to bigger cryptocurrencies similar to Bitcoin and Ethereum, which noticed their market capitalization decline by 12% and 6%, respectively, over the identical interval.
Associated Studying
The important thing driver behind Polygon’s stability in community efficiency throughout the second quarter of the 12 months, in accordance to Messari, was the implementation of Ethereum Enchancment Proposal (EIP) 4844 on the Polygon mainnet in Q1 2024.
This improve, which launched “blobs” to the community, considerably lowered the common transaction price on Polygon from $0.017 to simply $0.01, leading to a lower of 41.1%.
Consequently, Polygon’s income derived from community transaction charges fell 40.6% to $4 million in Q2 2024. Nonetheless, this drop was not resulting from a lower in person exercise, however quite the decrease charges enabled by EIP-4844. In reality, Polygon’s person metrics continued to soar, with the protocol seeing robust development throughout a number of key indicators.
On-Chain Exercise And Ecosystem Development
In line with the report, the common variety of each day energetic addresses climbed to 1.2 million, a 47.6% improve quarter-over-quarter (QoQ). The common variety of each day returning addresses rose much more, up 50.5% to 1 million. Furthermore, new addresses being added to the community grew by 31.7% to 167,800 per day on common.
The report additionally notes that Polygon’s transaction quantity additionally held regular, averaging 4.1 million each day transactions, slightly below its all-time excessive and representing a 3.9% improve from the prior quarter.
Compared, fellow Layer 2 networks Arbitrum (ARB) and Base noticed common each day energetic addresses of 545,000 and 528,000 respectively.
Associated Studying
Whereas Polygon’s decentralized finance (DeFi) complete worth locked (TVL) dropped 22.9% to $1 billion, this was largely attributable to the decline in MATIC’s value quite than a internet outflow of capital. Messari reported that TVL denominated in MATIC truly elevated by 38.1% to 1.8 billion tokens.
Nonetheless, DeFi protocols on Polygon noticed combined outcomes, with Aave, Uniswap, and SushiSwap all experiencing declines in TVL starting from 13% to 25%. Quickswap noticed the most important drop at 35%.
Lastly, Polygon’s non-fungible token (NFT) market additionally remained secure, with common each day NFT quantity dipping barely by 5.7% to $1.8 million. Nonetheless, the variety of each day NFT gross sales truly elevated by 1.8% to 52,000, underscoring ongoing collector curiosity.
On the time of writing, MATIC has skilled a mere 5% improve to a buying and selling value of $0.512, after hitting a 2-year low of $0.428 on July fifth.
Coupled with this worrying value motion, the token has seen a 30% lower in buying and selling quantity over the previous few days, amounting to $197 million, in response to CoinGecko knowledge. All of this has resulted in an 82% distinction to MATIC’s all-time excessive of $2.91, which was set throughout the 2021 bull run.
Featured picture from Shutterstock, chart from TradingView.com