Polygon (MATIC) outperformed other major cryptocurrencies following FTX collapse.
Layer 2 solutions like Polygon have created quite a buzz throughout the crypto ecosystem. Some even see L2 as the next step in Blockchain evolution, which is a better approach to scaling, primarily on Ethereum.
Both analysts and cryptocurrency gurus on Twitter have noted significant increases in L2 adoption throughout the year. In a Reddit discussion thread from last May, one user even referred to these solutions as “a turning point” in the industry.
Layer 2 Solutions: Scalable Growth of the Blockchain
Layer 2 is the nickname given to all Blockchain scaling solutions built in a layer behind a mainnet. The goal is to offload some transactional payloads from the primary chain. The main focus of this concept has been on Ethereum L2s.
Plasma is a suggested method that builds a network of sidechains below the main Ethereum chain, forming a tree-like structure. One of the top and trending names in this sector has been Polygon and its native MATIC, given its proven scalability.
In addition to scalability, Polygon aims to enhance the developer experience with permissionless design, complete technology sovereignty, and modular security solutions.
Regular users also benefit from low gas fees, instant transactions, and full compatibility with Ethereum tools like MetaMask.
Integrations and Associations
The Polygon ecosystem has attracted significant interest from developers who have suffered from Ethereum’s periodically high gas fees. Notably, Polygon has been adopted by several high-profile decentralized exchanges and crypto gaming applications. An example is Polygon and Aave.
Polygon partnered with Aave, a leading DeFi protocol for lending and borrowing on the Ethereum Blockchain, to offset traffic issues due to adoption spikes.
NFT adoption and markets on Polygon have especially skyrocketed in recent months. Polygon, according to recent data, has secured partnerships with Starbucks, Reddit, and Meta.
Additionally, the Blockchain-native MATIC coin witnessed some price growth; on Nov. 4, MATIC was trading around $1.10 after rising around 30% in just two days. However, the token suffered the wrath of the ongoing crypto bear market and traded back to slightly below $0.90.
Rising Above the Dark clouds
The last period of sell-off within cryptocurrencies was mainly triggered by the FTX crash. This caused the crypto market capitalization to drop below the trillion-dollar mark, and it currently sits at $845.66 billion.
Despite Polygon’s performance, rivals have begun taking steps to close the gap in the L2 sector. One such rival is Polkadot, another big name that claims to be the foundation of the decentralized internet often referred to as Web 3.0.
Due to harsh macroeconomic conditions and infighting, cryptocurrencies continue to suffer and trade at a massive discount. The risks are always there, even with the growing bullish narratives around layer two solutions.
By Audy Castaneda
