Polygon’s expanding ecosystem backs MATIC’s rise toward a new all-time high

Published at: Dec. 1, 2021

Layer-two (L2) solutions for the Ethereum network have become a popular topic of discussion and speculation on their associated tokens backed the massive rally seen in many of the protocols this year. The parabolic growth of the decentralized finance (DeFi) and nonfungible token (NFT) sector also led to a surge in the cost carrying out simple transfers and this prompted developers and investors to migrate to L2-supportive platforms.

One L2 solution that saw its token price rise to new highs earlier in the year and now looks poised to make another breakout higher is Polygon (MATIC), a proof-of-stake blockchain protocol that aggregates scalable solutions on Ethereum in order to support a multi-chain ecosystem.

Data from Cointelegraph Markets Pro and TradingView shows that MATIC hit a low at $1.01 on Sept. 21, and over the past few months the price has been in a steady uptrend, bringing the altcoin above the $2 mark on Dec. 1. 

Polygon's ecosystem is expanding and proof of this can be seen in the increase in protocol launches, cross-chain migrations, the launch of a Polygon-focused exchange-traded product (ETP) and a steady uptick in user activity.

Ecosystem expansion

One of the biggest drivers of MATIC price and on-chain activity has been the addition of new protocols to the Polygon network throproject launches and cross-chain migrations.

Most recently, IDEX decentralized exchange announced that it would launching v3 of its exchange on the Polygon network, making it the first hybrid liquidity DEX on Polygon.

Tomorrow. Approximately 12 PM PST.IDEX v3, the first Hybrid Liquidity DEX will be launching on @0xPolygon.✅ Combined AMM + Order Book Liquidity✅ Trading Rewards + Liquidity Mining✅ No failed transactions✅ Real limit & stop-loss orders✅ Cheap transaction fees pic.twitter.com/1nmOEzEGLW

— IDEX (@idexio) November 30, 2021

The Polygon network has seen project launches from NFT projects like the OpenBiSea NFT marketplace and gaming / DeFi platforms like Rainmaker Games, Harvest Finance and Jarvis Network.

Currently the Uniswap community is in the process voting on whether to add Polygon support for Uniswap v3 and after majority yes Phase 1 vote on Nov. 25 the process has shifted into Phase 2.

Rising institutional support

Another reason for the bullish price action for Polygon has been increased interest from institutional investors. Several ETPs for Polygon have been listed in recent months, including the Osprey Polygon Trust in September and the 21Shares Polygon ETP in November.

Polygon is also included on the list of assets being explored by the Grayscale Investments as a potential Trust candidate.

The network has also benefited from a $20 million investment fund launched by Wintermute, a digital asset market maker focused on helping to bootstrap the development of decentralized applications on Polygon.

Currently, the Polygon network is receiving increased attention as it prepares to host a ZK Summit on Dec. 9 where developers will discuss the “current state and future of zk-STARKs and applications of Zero Knowledge proofs.”

Related: IDEX to launch hybrid liquidity decentralized exchange on Polygon

Increase in active users and wallets

A third reason for the bullish price action seen in MATIC has been the steady increase of users on the network as evidenced by the increase in wallet addresses holding a balance.

As shown in the graph above, the number of Polygon wallets holding a balance has steadily increased throughout 2021 and is currently at an all-time high of 282,760.

Evidence of the increased activity can also be found in the data for total revenue generated from fees on the network, which has been steadily increasing over the second half of 2021.

As new protocols continue to list on the Polygon network, these stats are likely to rise if new users continue to use the platform to escape the high fees seen on the Ethereum network.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for MATIC on Oct. 15, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

As seen in the chart above, the VORTECS™ Score for MATIC spiked into the green zone on Oct. 15 and reached a high of 94 around 48 hours before the price began to increase by 57% over the next six weeks.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Tags
Dex
Related Posts
Celer (CELR) gains 400% after traders embrace its multi-chain ‘cBridge 2.0’ solution
High transaction costs have been a thorn in the side of investors and developers for more than a decade and the issue became worse in 2021 after the emergence of decentralized finance (DeFi) and nonfungible tokens (NFT) led to record-high levels of activity across the cryptocurrency ecosystem. Since the completion of Ethereum's London hard fork, cross-chain bridges and layer-2 solutions have been revised as options for mitigating the high fees on the Ethereum network. In the past two weeks, Celer, a layer-two scaling solution that utilizes off-chain transaction handling to help increase the throughput capacity of its network, has seen …
Decentralization / Sept. 29, 2021
3 reasons why REN price is up 340% from its July swing low
Interoperability has become one of the driving themes within the crypto market and as the blockchain ecosystem evolves into an interconnected web of layer-one protocols, the importance of communication and efficiency among decentralized applications (dApps) will also increase. Ren (REN), a blockchain protocol designed to provide interoperability and liquidity between different blockchain platforms, has started gaining traction over the past month and a half as activity in the decentralized finance (DeFi) sector has been on the rise. Data from Cointelegraph Markets Pro and TradingView shows that after reaching a low of $00.41 on Aug. 9, the price of REN has …
Nft / Sept. 16, 2021
Ethereum alternatives and layer-one solutions see steady gains in September
The competition among layer-one smart contract platforms has been on the rise in the past couple of months as traders and developers continue to embrace Ethereum network alternatives that offer faster transaction times and lower fees. According to a recent report from Delphi Digital, the price of Ether (ETH) has remained relatively flat over the past month, while competitors suc as Solana (SOL) and Fantom (FTM) have seen their prices rally more than 200% during the same time. One of the drivers of the rallies seen in Fantom (FTM), Avalanche (AVAX) and Terra (LUNA) is the fact that each has …
Markets / Sept. 26, 2021
Injective Protocol (INJ) rallies 100%+ after launching cross-chain support for Cosmos
Trading perpetual futures contracts in decentralized apps is a crypto sub-sector ripe for growth, especially as discussions of regulation, taxation and mandatory KYC at centralized exchanges continue to take place. One DEX platform that has begun to gain traction is Injective (INJ), an interoperable layer-one protocol designed to facilitate the creation of cross-chain Web3 decentralized finance (DeFi) applications. Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $3.91 on Feb. 3, the price of INJ has rallied 157.8% to a daily high of $10.08 on Feb. 11 amidst a 1,756% spike in its 24-hour trading …
Markets / Feb. 13, 2022
REN price gains 65% after Catalog launch brings a cross-chain DEX to its blockchain
Decentralized finance projects like Ren pumped in 2021, only to finish the year right back when they started as high fees on Ethereum (ETH) led to decreased activity for many protocols and DeFi took a backseat to more popular sectors like nonfungible tokens (NFTs). Now, it appears as though that downtrend is in the process of reversing course after recent global events highlighted the benefits of DeFi and holding assets outside the traditional financial system. This week REN price climbed 69% from a low of $0.247 on Feb. 24 to a daily high of $0.418 on March 3. Three reasons …
Blockchain / March 4, 2022