- Daily transactions on Polygon plunged by 81.38% from its peak this year.
- The activity on Polygon zkEVM increased after co-founder dropped hints of a potential Airdrop.
Polygon’s [MATIC] network traffic declined considerably after showing great promise in the first quarter of 2023. On-chain analytics firm IntoTheBlock highlighted that the number of transactions on the Ethereum [ETH] sidechain has plunged a massive 81.38% from its peak this year.
Despite its impressive growth during the ’21 bullrun, Polygon has experienced a decline in transactions. The number of daily txs currently sits at around 2000. This represents a significant 81.38% decrease from its highest point this year. Will Polygon bounce back????? pic.twitter.com/afOypM5AlJ
— IntoTheBlock (@intotheblock) May 24, 2023
Read Polygon’s [MATIC] Price Prediction 2023-2024
The protracted lull started to weigh on MATIC’s price action as well. The coin has shed 8.9% of its value in the last month and moved in a tight trading range over the past two weeks, per Santiment data.
Investors were not optimistic about the coin’s near-term potential as the weighted sentiment trended in the negative territory.
Source: Santiment
Polygon zkEVM tells a different story
While the onetwork activity on Polygon proof-of-stake (Pos) chain has softened, transaction volume on the L2 scaling solution Polygon zkEVM continues to soar.
As per information fetched from zkevm.polygonscan.com, the daily transactions saw a day-on-day upward trend in May. On a month-to-date (MTD) basis, the transactions on the the zero-knowledge rollup (zk-rollup) exploded 10x.
Source: zkEVM Polygonscan
Apparently, the activity on the L2 started moving upward after co-founder Sandeep Nailwal dropped hints of a potential AirDrop.
Airdrops are becoming one of the most popular marketing strategies in crypto space. They offer an opportunity for users to receive free or discounted crypto assets while helping projects increase brand awareness and attract attention.
Moreover, the buzz around Airdrop gave a fillip to the total value locked (TVL) on the chain which had stagnated over the past month. Over the last 10 days, the TVL increased by more than four times, per DeFiLlama.
Source: DeFiLlama
To add to this, optimizations were expected on the L2 solution which would slash the transaction fees on the network by 20%, incentivizing greater usage in the days to come.
Whales amass MATIC
zkEVM’s exploits were not enough to boost MATIC’s prospects. The downturn seen over the past month pulled the MVRV Ratio to negative territory. This meant that most MATIC holders were at a loss.
But big addresses jumped on to the scene, hoping to fill up their coffers with discounted MATIC. There was a noticeable surge in addresses holding more than 1,000 MATIC coins.
Source: Santiment
Realistic or not, here’s MATIC’s market cap in BTC terms
Recently, in an AMA session hosted on Reddit, Sandeep Nailwal responded to a question about the long-term vision for the Polygon ecosystem. He said that Polygon desired to become the “the value layer of the internet,” where all applications that seek to create/distribute value natively on the internet can use Polygon.