- Polygon gains the upper hand in TVL growth thanks to zkEVM.
- MATIC escapes fluctuating performance after regaining bullish momentum.
It is usually more difficult for blockchain networks to achieve positive growth in slow market conditions. The Polygon network managed to overcome limitations thanks to one particular segment.
Polygon zkEVM has been getting a lot of attention lately, which has subsequently fueled positive growth. This is evidenced by the impressive TVL it managed to achieve in a short time. To put this growth in perspective, Polygon zkEVM rose from $1.5 million to $14 million.
Polygon zkEVM has grown in TVL in a short period of time, from $1.5 million to $14 million.
But that’s not all that happened on Polygon zkEVM.
Here’s some additional on-chain data highlighting Polygon zkEVM activity. pic.twitter.com/OYP49V0i0E
— DeFi scholar 🎓🎓 (@ModestusOkoye) May 29, 2023
One of the main reasons for this growth is that zkEVM brings additional benefits to Polygon. These include lower costs and better scalability. As such, many investors believe it is an ideal solution to boost Polygon’s growth.
For perspective, Polygon zkEVM had locked in less than $500 million in total value. TVL growth initially got off to a healthy start, but only really took off after mid-May. The network has added just over $12 million to its TVL in the past two weeks.
Source: DeFiLlama
This growth can provide insight into how the market has responded to zkEVM. A very positive response, but will the same translate into demand for MATIC?
MATIC’s price action
MATIC may already be benefiting from the growth associated with the Polygon zkEVM hype. This is evident from the performance of the past few days. Like most top cryptocurrencies, MATIC went through a phase of lateral price movements, but the price stagnation was short-lived, unlike most of its counterparts.
MATIC has been on a bullish trajectory for the past five days, which has helped the token overcome the varying performance. It traded at $0.92 after failing to push back above $1.
Source: TradingView
The MATIC benefit could be short-lived as momentum slows significantly. This was evident in some of his on-chain stats.
For example, Polygon’s network growth metric is near its lowest level in the past four weeks. The network’s growth peaked at the start of the recent rally, which began notably with a spike in social dominance.
Source: Sentiment
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The recent rally was accompanied by an increase in daily active addresses from May 23.
The tail end of the recent hype started on May 27, and addresses have registered a notable slowdown since then.
This is reflected by some selling pressure in the last 24 hours. It is worth noting that there was also a slight increase in daily active addresses.
Source: Sentiment
The slight increase may indicate trading activity related to profit taking following the recent rally. This could be short-lived as the market regains some confidence.
