Last year, Polygon (MATIC) focused on growing its list of high-profile partners that includes luminaries like Disney, Starbucks, and Robinhood. Recent announcements of partnerships with Instagram and JPMorgan have caused speculators to increase the price of the token by almost 200%.
In addition to associations, it is important to analyze the adoption of blockchain through the use of the network. Blockchain adoption can be analyzed by looking at the daily active users of the blockchain, the protocols that use the technology, the number of transactions, and the total value locked.
Total value locked in Polygon rises above $1 billion
Total Value Locked (TVL) is a cryptocurrency indicator used to gauge market sentiment towards a particular blockchain. TVL on Polygon requires using the MATIC blockchain and locking funds on the various DeFi platforms available on the network.
Increased TVL is a sign of growth or new liquidity entering the ecosystem, but it does not necessarily mean that the network and associated assets are “turning bullish”.
While the top 3 protocols, Ethereum (ETH), Binance Coin (BNB), and Tron (TRX) have a TVL of more than $5 billion, MATIC, Avalanche (AVAX), and Arbitrum are the only others with more than $1 billion. in TVL.
According to data from Token Terminal, Polygon and Fantom (FTM) are the only blockchains posting positive TVL numbers in both 1-day and 7-day metrics.
Top 3 blockchain protocols for developers
The protocols are essentially decentralized applications (dApps) built using smart contracts on top of public blockchains. The recently announced partnerships have been tested but not yet fully launched.
Even if the new partnerships don’t fully materialize, the network is already a prime contender for developers building their smart contracts.
Polygon is a relative newcomer compared to Ethereum. So even though Ethereum has more protocols than Polygon, Ethereum launched mainnet with a 5 year head start.
Polygon’s astronomical growth in protocols being launched on its blockchain is notable because, according to TokenTerminal data, Ether’s market capitalization dominates MATIC by between 90% and 10%.
Polygon sees increase in rates and daily active users
In addition to Polygon’s price growing 12% in the last month, daily network fees and daily active users have grown 200% since August 5, lending credence to Cointelegraph’s prediction.
On August 5, Polygon collected $42,093 in fees and had 248,853 daily network users. On October 13, the network’s daily active users reached a high of 737,815 following the successful launch of Reddit’s NFT avatars. After October 25, the network hit a 90-day peak of $131,940 in daily fees.
Comparing the activity and on-chain analysis to the recent MATIC rally, the data suggests speculation on the association’s news is in line with fundamentals.
While it is an exaggeration to forecast a potential 200% gain in MATIC growth using technical analysis alone, Polygon’s network growth and daily active user statistics are encouraging.
The number of transactions and TVL could be a sign that the fundamentals of the network are in line with the expectations of technical analysts. MATIC’s strength against competing chains, while still only a fraction of the market capitalization of Ether and BNB, is quite bullish for its long-term growth prospects.
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 do your own research when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.