Polygan’s 80% jump in the last 30 days; How far does the upward trend continue?
Polygan had a promising performance in July and the main token of this network, MATIC, experienced an 80% growth over the past 30 days; But how far does this upward trend continue?
To Report Cointelegraph, Polygon’s price increased after being selected in Walt Disney Company’s accelerator program to work on its augmented reality project, the creation of non-trivial tokens (NFT) and the development of artificial intelligence-based solutions.
The Paligan team announced on July 20 that it plans to implement an Ethereum virtual machine-compatible service using zero-knowledge proof-of-concept (zkEVM). This technology bundles multiple transactions into a single transaction before sending them to the Ethereum blockchain. Mihailo Bjelic, one of the founders of Paligan, said in his recent interview with Cointelegraph that this new blockchain solution will reduce the cost of Ethereum fees by 90% and increase the throughput to 40-50 transactions per second.
Another reason for the growth of Polygon’s price was the increase in the number of platforms that allowed liquid staking or liquid staking for Tokenmatic. This allows investors to earn more rewards. According to DeFi Pulse, Lido Finance, Balancer, Meshswap, and Ankr Staking are examples of these platforms.
Although Polygon’s current market cap is 69% below its peak, it is still among the top 15 cryptocurrencies by market cap. In addition, about $1.82 billion of capital has been deposited into the network’s smart contracts, known as “Total Capital Value Locked” or “TVL”.
Polygon Network’s ethereum compatible scalability is fully functional. The platform hosts a wide range of decentralized applications, including decentralized exchanges, collateralized lending services, profit-aggregation platforms, NFT markets, and games.
Also read: What is Polygon? Shopping training and wallets + video
A 42% decrease in the value of the total capital locked in the Paligan network
Despite the increase of more than 80% in the price of Paigan digital currency in the last 30 days, the total value of the capital locked in this protocol has decreased by 42% compared to the previous period. For comparison, in the same period, the value of the total capital locked in the Phantom and Klaytn networks has decreased by 14% and 11%, respectively.
The dollar value of the locked capital of the Polygan network has also decreased by 67% since the beginning of 2022, and is now 1.42 billion dollars. However, according to the data of DeFi Llama website, this amount is not far from Solana’s $2.08 billion or Olench’s $2.52 billion.
To confirm whether the decline in the value of Polygon’s locked-in capital is due to its declining adoption rate, we need to examine the data on the use of decentralized applications. Since some of these applications, such as games or NFT markets, do not require a large amount of deposits, then checking the TVL index in this case can mislead us.
As DappRadar data shows, the number of Polygon network addresses interacting with decentralized applications has decreased by 19% compared to last month.
Considering the 42% decrease in the value of Polygan’s locked capital, the network needs a significant and more stable user growth to support the rising price of the Matic token. However, the decentralized exchange Quickswap has registered 138,530 active addresses in the last 30 days. For comparison, the number of active addresses of OpenC platform users was 299,910 during the same period.
A review of the above data shows that Polygon Network has lost some of its interest in the scalable solutions market. However, the recently introduced Zero-knowledge Proof technology compatible with the Ethereum virtual machine has not yet been implemented, although its benefits could push the price of the Matic token above $1 in the future.