After a devastating 50% correction between December 25 and January 25, Polygon (MATIC) struggled to maintain support at $ 1.40. While some argue that this top 15 coin was simply corrected after a rally of 16,200% in 2021, others point to the emergence of competing expansion solutions.

MATIC / US dollar symbol on FTX. Source: Trading View
Regardless, the MATIC remains 50.8% lower than the all-time high with a market value of $ 11 billion. Terra (LUNA) currently has a market value of $ 37 billion, Solana (SOL) has a market value of over $ 26 billion, and Avalanche (AVAX) has a market value of $ 19 billion.

On the plus side, Polygon raised $ 450 million on February 7, and the financing round was supported by some of the largest venture capitalists in the blockchain, including Sequoia Capital.

Polygon provides infrastructure scalability and support for decentralized applications (DApps) based on Ethereum Virtual Machines (EVM). In addition, it does not suffer from the high transaction fees and network congestion that affect the Ethereum network.

However, competition for decentralized Ethereum (DeFi) funding, non-fungible tokens, marketplaces, cryptocurrencies, gambling and social applications has increased exponentially with the advent of Proof-of-Stake Tier 1 networks that provide affordable smart contract options. .

In comparison, Terra’s total book value increased 340% between July and December 2021 to $ 12.6 billion. Similarly, Avalanche’s smart contract deposits increased from $ 185 million to $ 11.11 billion over the same period.

The use of lotion for polygon sizing is declining
Polygon’s most important DApp metric began to show weakness in August 2021 after the network’s TVL fell below 4 billion MATIC.

Total polygon value, MATIC locked. Source: Defillama
The chart above shows how Polygon DApp deposits reached a peak of 7.4 billion MATIC in July 2021 and then fell sharply over the next few months. In dollars, the current TVL of 3.5 billion dollars is the lowest since May 2021. According to DefiLlama, these figures represent less than 5% of the total TVL (excluding Ethereum).

On another positive note, Ankr, a multi-purpose blockchain infrastructure tool, launched a token bridge between Ethereum and Polygon on March 9th. The first version will allow the aMATICb liquid storage token to be transferred and stored. This allows users to earn multiple levels of rewards on DeFi platforms.

To be sure that the fall in TVL in Polygon causes problems, you should analyze DApp usage calculations. Some DApps, such as games and collectibles, do not require a large deposit, so TVL does not play a role in these cases.

Polygon DApps chain data for 30 days. Source: DappRadar
As DappRadar showed, on March 10, the number of polygon network addresses that interacted with DApps increased by 5% compared to the previous month. While TVL Polygon has suffered the most compared to similar smart contract platforms, the gaming segment has seen stable network usage, as evidenced by the 199,260 active Crazy Defense Heroes titles over the past 30 days.

On November 16, Polygon Miden launched the World Cup powered by zk-STARK, a transparent, scalable cognitive logic without knowledge. Polygon has also committed more than $ 1 billion to developing complex DeFi applications that need to release sensitive information about digital assets, and reduce the volume for rapid verification of blockchain participants.

The data above indicates that Polygon has its own version of it compared to its peers, and these owners may not be so concerned about MATIC’s 50% price correction. Polygon continues to thrive, and the fact that it offers so many sought-after Tier 2 expansion solutions across industries can be seen as an optimistic factor.

Source: CoinTelegraph