Polygon Beefs Up Layer 2 Position, Gets The Edge In NFT Transactions Vs. Ethereum
February 03 2023 - 9:16AM
NEWSBTC
Polygon is a Layer 2 scaling solution built on top of Ethereum.
This addresses the scalability problem of the Ethereum network. The
project, however, is currently outperforming the network in NFT
transactions. According to WuBlockchain, a crypto news reporter,
various metrics of Polygon’s NFT market have gone up with BendDAO,
Polygon’s NFT lending platform, reaching a lending volume of $36
million. Related Reading: AVAX Jumps 22% As Avalanche Records
Another Win For Institutional Adoption This has been the second
consecutive month that the L2 performed better than Ethereum in
terms of NFT activity. However, Polygon is facing major headwinds
in other aspects. The number of Polygon NFT transactions in
January exceeded Ethereum NFT for the second consecutive month, but
the average transaction fee was much lower. Various data of the NFT
lending ecosystem have hit record highs, with BendDAO’s borrowing
volume exceeding $36 million. — Wu Blockchain (@WuBlockchain)
February 1, 2023 Major Win For Polygon WuBlockchain’s news report
references NFTGators’ recent analysis of NFT activity in both
Ethereum and Polygon. They found out Polygon has outperformed
Ethereum by a small margin. According to the report, Ethereum
saw 1.1 million NFTs sold this January which is outnumbered by
Polygon’s 1.5 million NFTs sold in the same time frame. Image:
NFTGators Number of traders, however, favor Ethereum with 319,641
traders against Polygon’s 224,719 traders. But Polygon NFT traders
enjoy lower fees on average, paying only $69 on average fees on
chain. NFTfi on Polygon is also booming according to the
report. Over 17.9k ETH worth of NFTs was lent during this time
period in the platform. BendDAO, an NFT lending platform on
Polygon, became the most ubiquitous, sporting $36 million worth of
NFTs lent. Monthly NFT loan volume (ETH). Source: Dune/rchen8
No Sunshine And Rainbows The NFT space for Polygon grew beautifully
with the migration of y00ts and DeGods last month. But bad news is
in store for the ecosystem in the dApp side of things. According to
dAppRadar, Polygon is experiencing lower activity on its dApps in
the daily time frame. Planet IX, an NFT game on the platform,
saw a 45% decline in unique active wallets on the dApp. Another
popular dApp on Polygon, Galxe, experienced a 15% decrease in the
same time frame. This is especially disturbing since this might
signal a loss of interest in Polygon’s dAppp space. MATIC
total market cap at $10.3 billion on the daily chart | Chart:
TradingView.com Related Reading: AAVE Seeks Proposal To Clear
Itself Of Bad Debt – Can It Overcome These Obstacles? Development
activity on-chain is somewhat weaker. However, it has experienced a
continuous upward movement since the start of the year, which might
give users confidence in the long term growth prospect of the
ecosystem. MATIC Showing No Confidence In Recent Developments
The governance token of Polygon, MATIC, recently paused its climb
with the bulls exhausted after smashing through $1.16. The recent
developments are sending mixed signals to investors, making the
token consolidate above $1.16 support. If the dApp situation
improves, we might be able to see the token break $1.2753
resistance in the near future. However, this will only happen if
the ecosystem shows investors and traders that the girth of Polygon
won’t be hindered in the long term. Featured image from Unify
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