How does Polygon [MATIC] fare amidst emerging L2 solutions? Assessing…

• The daily activity of zkSync Era and StarkNet parallels that of Polygon.
• Overall dominance of Polygon in the DeFi sector remained high.

Polygon [MATIC] has been dominating the L2 space in terms of activity over the last few months. However, this dominance could soon be threatened by other L2 solutions.

Realistic or not, here’s MATIC’s market cap in BTC terms

Upcoming L2 solutions such as zkSync Era and StarkNet have been catching up to Polygon in terms of daily activity. Both these solutions were rumored to launch token airdrops soon.

The hype around airdrops may be enough to propel activity on both these networks to new heights. After the tokens for these respective networks get launched, the activity on the networks may surpass that of Polygon, leaving Polygon in the dust.

Source: Artemis

Will Polygon be able to retain its position?

In terms of the DeFi sector, it could be safe to say that the protocol may still continue to show growth. The TVL on Poygon’s zkEVM protocol continued to rise over the last few months.

The protocol is also on its way to make new developments on its network.

Polygon’s founder, Sandeep Nailwal, has stated that zkEVM ecosystem is preparing for significant growth with the deployment of critical infrastructure such as Safe and Chainlink oracles, as well as user experience improvements based on early developer feedback and cost optimizations through data compression.

Source: DeFi Llama

To combat the attention garnered by other protocols pertaining to an airdrop, Sandeep mentioned how the network could possibly have an airdrop of its already existing token MATIC for its users.

The growth in the NFT sector will also help the protocol with the competition. Reddit’s recent collaboration with Polygon resulted in 8.7 million users being onboarded to the Web3 space.

And these are “onchain” users! https://t.co/daIeVYdXH3

— Sandeep Nailwal | sandeep. polygon 💜 (@sandeepnailwal) May 11, 2023

However, despite this surge in activity, Polygon’s NFT growth has started to decline. Dune Analytics’ data indicated that the overall volume of NFT transactions occurring in marketplaces took a massive plunge.

How much are 1,10,100 MATICs worth today

Source: Dune Analytics

In conclusion, even though competition rises with protocols launching airdrops and luring new addresses, Polygon may still survive in terms of activity.

However, it may have to work on the waning interest in its NFTs in the future.