Polygon and zkSync capitalize on zkEVM hype, but this is why things could go south

• Polygon and zkSync both witnessed a spike in their TVL.
• However, the number of depositors on both protocols start to fall.

The zkEVM sector has been on the receiving end of a lot of activity with both Polygon and zkSync seeing a surge in interest. Polygon‘s recent forray into the  zkEVM space worked as one of the contributors to the hype surrounding zkEVMs.

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One indicator of the growth of both these protocols would be the increasing total value locked(TVL) on these networks. According to Nansen Research’s data, the TVL collected on zkSync has grown to $50 million and for Polygon’s zkEVm, the number has surged to $750,00.

The team at Nansen Research believes that the TVL collected by both of these networks will continue to rise as new protocols continue to get added to the network.

However, things may take a turn for the worse soon for both of these protocols. According to Dune Analytics’ data, it was seen that the number of Ethereum deposits made through zkSync had declined from 40,000 to less than 10,000 over the last week.

In Polygon’s case, the number of transactions fell from 2,300 to 257.

Source: Dune Analytics

Race to the top

This decline in the number of transactions resulted in a fall in the daily activity on both of these networks.

In terms of market dominance, zkSync still has a lion’s share of the zkEVM market, controlling 57.7% of all activity on zkEVM networks. Stark Net comes in at second place with 25% of the overall market share. Polygon was still far behind in this area as the protocol is relatively new.

At press time Polygon zkEVM had captured 1.2% of the overall market.

Source: Dune Analytics

Things may change for the better for both of these protocols as time passes. One of the factors which could be favorable for zkSync would be the hype around its upcoming airdrop. Even though the attention being garnered by the protocol for a potential airdrop is mostly based on speculation, it may still end up attracting users to the protocol in the long run.

Read Polygon’s [MATIC] Price Prediction 2023-2024

On the other hand, Polygon’s existing token has been doing relatively well. According to Santiment’s data, the sentiment around MATIC has been increasingly positive. However, the price and network growth of the MATIC token still have a long way to go.

Source: Santiment