A fair bit of real-world assets (RWAs) activity has been taking place on the Ethereum network and especially its layer 2 network, Polygon crypto.
Recent data revealed that Polygon has been pulling ahead as one of the preferred networks for tokenized bonds.
A report published by Dune and RWA.xyz revealed that the Polygon network managed to secure a lead in the budding tokenized bonds market. The report noted that Polygon had secured a 62% lead in the segment.
According to the report, Euro and U.S dollar denominated bonds were the most popular bonds on Polygon.
It also revealed that both Polygon and Ethereum controlled about 29% (each) of the tokenized bonds market.
The total value locked for tokenized U.S bonds USTBL has been growing aggressively and it recently pushed above $140 million.
Polygon’s performance in terms of tokenized bonds growth was not a fluke but rather the result of the Ethereum layer 2 dynamics.
RWA Growth on Polygon Underscores Layer 2 Efficiency
Although Ethereum network has been benefiting from growth in the RWAs segment, the true winners have arguably been its layer 2s.
Based on the recent report, Polygon was the top Ethereum layer 2 to take advantage of growth opportunities in the tokenized bonds market.
Another critical factor may have also aided Polygon’s lead. High yields for investors (as much as 20%) on both Ethereum and Polygon may explain why the two have been performing well in the tokenized bonds segment.
Interestingly, institutional buyers were among the biggest subscribers to the tokenized bonds. This means the network was in a position to benefit from robust institutional volumes.
Moreover, Polygon crypto may be on track to enjoy robust growth as the RWAs segment continues to thrive.
On the technical side of things, on-chain data revealed that Polygon was already reaping the benefits mostly observed in net inflows.
The Ethereum layer 2 network registered almost $200 million worth of net inflows in the second week of September.
Stablecoin count on Polygon just crossed $3 billion. For context, it was just above $1.5 billion at its lowest point in December last year, meaning it has doubled since then.
Will the Native Polygon Crypto Leverage this Growth?
While Polygon has been benefiting from strategic moves in the RWAs segment, its native coin POL has been experiencing a pullback since the start of August.
However, zooming out reveals an interesting pattern. The Polygon crypto retested its bottom range in June, after which it bounced back sharply.
This confirmed that the token was severely discounted from its historic top. POL price exchanged hands at $0.26 at press time which meant it was still discounted by over 70% from its historic top.
This was noteworthy because Polygon’s recent performance may attract investors looking to tap into altcoins likely to offer robust upside.
While POL price pushed higher, in August, its RSI clocked lower highs. A potential sign that smart money was taking profits.
However, a lot has changed since then, including the latest change which could potentially set the pace for higher liquidity inflows into altcoins.
The Polygon crypto was in a position to leverage potential upside now that its native network has been capitalizing on the RWAs narrative through tokenized bonds.
If so, then POL might be one of the most important coins to watch, especially as the market enters a new paradigm.
A strong recovery could mean the token has a chance to rally to its historic high. It could even push above $1, but then it would require a 280% plus rally to achieve that target.