all ecosystem developments in Q2

In this article we take a look at all the progress made by the Polygon crypto project team in Q2 2023, including a look at on-chain data on metrics such as active addresses, daily transactions and gas paid by users.

We also examine how the price of MATIC is moving and what the future scenarios are.

All the details below.

Crypto: the most important developments in the Polygon ecosystem in Q2

Much progress was made by the Polygon crypto project team in Q2 2023, leading to the decentralized ecosystem once again confirming itself as one of the most important web3 infrastructures in the industry.

Among the most important aspects to note in terms of technical developments are three new features in particular:

1- Polygon Supernets: The Polygon Labs team has developed a test version of this technology that allows developers to create specific app-chains capable of supporting features such as staking, NFT bridging, and token deployments.

Anyone is able to create their own blockchain, calibrated with their own parameters but referring and operating directly on the Polygon Edge Consensus.

The advantages are a simplified operating framework, the security of the Polygon core network and high transaction scalability.

2- Polygon ZkEVM Bridge: During Q2, the official bridge for the transition of tokens from the Polygon Mainnet to the ZkEVM chain was launched, providing a simple and secure user experience.

The new network, which uses zero-knowledge cryptographic proof, has gained popularity over the past 3 months by adding decentralized applications around it and attracting capital from external ecosystems. The Polygon ZkEVM has come to compete with big names in this niche such as ZkSync Era, Starknet and Base.

3- Polygon 2.0: The latest infrastructural development concerns the update of version 2.0 of its protocol in which the key principles of what is to be a real revolution in blockchain have been introduced.

The goal of the crypto project team is to elevate Polygon to an “internet value layer” capable of bringing unified liquidity and unlimited scalability.

The update includes the move of Polygon PoS to ZkEVM Validium to enable security and greater interoperability within the ecosystem.

A look at on-chain data

Taking a look at the on-chain data within the Polygon ecosystem, we immediately realise how dedicated the crypto project team has been working this Q2, bringing remarkable results.

The first metric to look at is the number of active addresses in the Polygon PoS network, the number of which remained more or less stable even in the face of an insignificant and impactful quarter in the crypto sector as a whole. 

Active addresses fluctuated between 253k and 475k on a daily basis, which means that a solid user base is active within the crypto network on a daily basis.

The same trend can also be observed on the daily transaction front, with the metrics ranging from 1.9 million to 3 million transactions carried out on the Polygon PoS.

Even though in this case we can observe greater volatility, with a peak in activity reached at the end of April, it is nevertheless noteworthy that every day at least around 2 million transactions are confirmed in the network.

The gas paid for these transactions also varied with considerable amplitude from a low of $68k to $236k (daily).

Speaking of gas fees, in Q2 2023 the Polygon PoS chain was confirmed with an extremely cheap blockchain infrastructure.

The average fees paid on the network ranged from $0.03 to $0.12 per transaction. These values are considerably lower than those on Ethereum, where fees of between $3.47 and $29 per transaction had to be paid to access the network’s services.

The last aspect of the on-chain data to highlight concerns the user segments that helped drive the activity and volumes recorded on the Polygon Pos during Q2.

In particular, in the following chart we can see how the top ‘smart money‘ users who achieved higher levels of profitability were airdrop professionals, early staking users and experienced NFT investors who collectively accounted for 80% of the smart money flow on Polygon.All of this strengthens the DeFi and NFT niches in the ecosystem.

Price analysis of the Polygon (MATIC) crypto

Although the analysis of the performance of the Polygon ecosystem during Q2 2023 showed strength and resilience with overwhelmingly positive metrics, we cannot say the same for the crypto MATIC, which unfortunately also experienced a downsizing of its price in July and August.

In particular, after the relatively stable first few days of April, from 19 April prices began to fall strongly, remaining constantly below the 10-period moving average on a daily time frame.

The descent culminated with a 16% dump on 10 June, the day the SEC cleared the markets by attacking the cryptocurrency exchange Binance and triggering a sell-off of all crypto assets in the sector.

From then on until 13 July, we observed a brief recovery for the crypto MATIC, which jumped 40% in just over a month from $0.6 to $0.85.

However, the momentary enthusiasm, motivated by BlackRock’s entry into the industry with the presentation of a spot Bitcoin ETF to US market regulators, ended quickly as prices have lost another -25% from 13 July until today.

MATIC currently trades at $0.62 per token, with the main trend directionality still bearish.

The 10-period moving average still seems to be in command, while the EMA 60 acts as a barrier to upside attempts.

For MATIC to recover, we will have to wait for a significant break of both moving averages just listed, with an accompanying decent volume.

Watch out for short-term price action as the RSI is approaching oversold territory so there could be an imminent uptrend in the coming days.

The key levels to watch in the coming months will be $0.60 for bears, the breach of which could decree a bearish continuation of the asset, and $0.72, the breach of which could reverse the short-term trend sending MATIC directly back to the $0.85 area.

At the moment, the odds are unfortunately in favour of the bearish trend in the medium term.