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Why MATIC’s 8,500% Growth in One Year Is not Ceiling

08 Jun, 2021 Martin Petkov
why-matic-is-growing

In May 2021, the cryptocurrency market underwent a considerable setback. However, MATIC (Polygon) saw +118% growth despite the general dynamics. This exemplifies not the coin’s strong positions in the market but also the ability of certain projects to resist the market’s setbacks.

Image source: StormGain

Ethereum’s basic problem is its network’s high congestion and its slow proof-of-work protocol. As a result of the smart contract rush, its transfer fees rose above Bitcoin’s network fees, reaching $69.50 pm average. MATIC solves this problem by increasing transaction throughput to 65,000 transactions per second with a fee of $0.001.

MATIC was created to be integrated with Ethereum as opposed to the ‘Ethereum killers’ Polkadot and Solana. That’s why MATIC was a bigger winner in the rally experienced by the DeFi market, most of whose platforms are deployed on Ethereum’s network.

Image source: bitinfocharts.com

Currently, MATIC’s capitalisation stands at $9 billion, ranking it 17th overall. In May, the number of Polygon’s daily active users grew from 7,500 to 28,900. In addition, Aave recorded a 156% growth in the number of addresses after it integrated with Polygon, which made it the number 1 platform among DeFi projects.

Image source: defipulse.com

On 26 May, reports emerged that Mark Cuban — the billionaire owner of the Dallas Mavericks basketball team — had invested in MATIC. The sum was not publicly revealed, but on 27 May, Polygon’s co-founder spoke of a ‘significant investment’ being made.

The DeFi market grew 60-fold in one year. Users don’t want to pay $10 per transaction, so the demand for low-fee solutions will grow. The only thing threatening Polygon is Ethereum’s transition to a proof-of-stake protocol. However, Vitalik Buterin has said that 2022 is the closest mark, and a full network deployment might take about six years. Until then, the huge difference in fees and transaction speeds will help MATIC’s growth.

The StormGain Analytics Group

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