Polygon (MATIC), currently ranked as the 10th largest cryptocurrency by market cap at over $10 billion, has shown signs of recovery with a 1.8% gain in the past 9.2 hours. Trading at approximately $0.84, the network has seen a trading volume of $99.8 million in the same period. While still 30% below its all-time high of $2.92 reached in late June 2021, MATIC has gained 2.92% year-to-date in 2023, signaling cautious optimism among investors.
After a prolonged period of stagnation, Polygon has started the month on a positive note. But what’s driving this momentum? Let’s explore the latest developments shaping its trajectory.
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Why Is Polygon Regaining Momentum?
The launch of Ethereum’s Shapella upgrade—marking the full transition to ETH 2.0 Proof-of-Stake (PoS)—boosted Ethereum’s throughput by 99% and slashed energy consumption significantly. However, it also raised concerns about Polygon’s relevance, given its role as an Ethereum Layer-2 scaling solution relying on sidechains.
If Ethereum itself becomes more scalable, demand for external solutions like Polygon could theoretically decline. This fear briefly dampened sentiment around MATIC shortly after the Shapella upgrade on April 12.
Chainalysis data reveals that weighted sentiment within the Polygon ecosystem turned negative post-upgrade and has since dropped nearly 0.45%, settling at -150. The weighted sentiment metric evaluates market perception by comparing positive versus negative mentions across social and technical channels. A sustained negative reading indicates growing investor skepticism about long-term viability.
To counter this, Polygon’s team must continue delivering unique value through innovation and community engagement—something they’ve been actively pursuing.
PolygonID: Advancing Decentralized Identity
Founded in India in 2017 by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, Polygon has attracted notable investors including billionaire Mark Cuban and Coinbase Ventures. MATIC serves as the native token of the network, used for staking in its Proof-of-Stake (PoS) consensus mechanism and paying transaction fees.
Recently, the team announced three key updates to PolygonID, its decentralized identity infrastructure, designed to simplify integration for developers building dApps:
- Selective Disclosure: Enables developers to share specific fields from credentials, enabling privacy-preserving use cases.
- New JS SDK: Allows creation of identity clients across devices like web wallets and browser extensions, with built-in support for serverless credential issuance.
- Improved UX for Issuers: A new issuer node UI streamlines setup and management, while mobile SDKs now support push notifications via the Polygon ID wallet.
Additional tools rolled out include:
- JWZ Validator
- Polygon ID smart contracts deployed on PoS mainnet
- Android and React-native mobile SDKs
- Registration of Decentralized Identifiers (DIDs) with the World Wide Web Consortium (W3C)
These upgrades position Polygon as a leader in self-sovereign identity—a critical layer for future Web3 applications requiring secure, user-controlled data sharing.
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zkEVM Performance and Network Activity
Polygon’s zkEVM platform continues to demonstrate strong performance. As of April 24, transaction count on the zkEVM mainnet beta surged 300%, reaching 168,000 transactions. Unique active wallet addresses climbed to 177,000—an increase of over 50,000%.
These activities generated $95.25 million in fees (equivalent to ~589 ETH). Notably, average daily gas fees on Polygon zkEVM were seven times lower than those on Ethereum mainnet during the same period, reinforcing its cost-efficiency advantage.
Despite these gains, on-chain metrics reveal mixed signals.
After spending much of Q1 2023 in bearish territory, MATIC entered bullish zones in April—but now faces resistance below the 200-day Exponential Moving Average (EMA), currently at $0.852. Bulls are testing this level; a breakout could open the path toward higher resistance targets.
However, rising Network Value to Transaction (NVT) ratio suggests potential overvaluation. The NVT ratio compares market capitalization to on-chain transaction volume—similar to a price-to-volume ratio.
Since mid-March, MATIC’s NVT ratio spiked from 63.28 to 298.74—an increase of nearly 373%—indicating declining fundamental traction relative to price movement. Such divergence often precedes downward corrections.
Key On-Chain Support Levels
According to IntoTheBlock’s IOMAP model:
- ~6,000 addresses bought 95 million MATIC tokens at an average price of $0.70 — strong support zone.
- ~31,000 addresses hold 91 million MATIC at $0.63 — another accumulation level.
- ~13,000 wallets hold 100 million tokens at $4.08 — unlikely near-term resistance due to high cost basis.
Gas usage on Polygon surged last week, driven primarily by DeFi protocols like XEN, Matcha, Aave, and Balancer—indicating growing network utility despite broader market headwinds.
Total Value Locked (TVL) remains around $1 billion—well below its peak of nearly $10 billion in January 2021—reflecting slower DeFi adoption growth compared to earlier cycles.
Similarly, NFT volume on Polygon dipped recently. However, the upcoming launch of the first NFT collection on zkEVM mainnet may reverse this trend by attracting new creators and collectors.
Strategic Partnerships Fuel Growth
Even amid market volatility, Polygon is securing high-profile collaborations that enhance credibility and real-world utility.
Franklin Templeton Integration
Franklin Templeton, a $1.4 trillion asset manager, now supports its blockchain-based mutual fund—OnChain U.S. Government Money Fund (FOBXX)—on Ethereum Layer-2 networks, including Polygon. This fund, with over $27 billion in assets under management (AUM), uses public blockchains for transaction execution and equity recording.
Roger Bayston, Head of Digital Assets at Franklin Templeton, emphasized that blockchain integration improves security, speeds up settlements, and reduces costs—benefiting shareholders directly.
Google Cloud Partnership
In a multi-year strategic alliance announced at Consensus 2023, Google Cloud and Polygon Labs joined forces to help developers build and scale Web3 applications on Polygon’s suite of protocols—including zkEVM, PoS, and Supernets.
Key outcomes:
- Google Cloud will introduce its Blockchain Node Engine—a fully managed node hosting service—to the Polygon ecosystem.
- Developers can deploy nodes without managing infrastructure.
- Enhanced cloud infrastructure diversity strengthens network resilience.
- Expected to boost throughput for DeFi, gaming, and supply chain use cases on Layer-2.
Sports Illustrated Enters Web3
Sports Illustrated (SI) launched SI Tickets, an NFT-based ticketing platform built on Polygon in collaboration with ConsenSys. The “Box Office” solution offers self-service event management and primary ticketing capabilities—bringing mainstream audiences into Web3 through familiar experiences.
Frequently Asked Questions
Q: What is driving recent MATIC price movements?
A: Recent gains stem from improved zkEVM performance, rising gas usage in DeFi, and major partnerships with institutions like Franklin Templeton and Google Cloud.
Q: Is Polygon still relevant after Ethereum's upgrade to ETH 2.0?
A: Yes. While Ethereum improved scalability, Polygon differentiates itself with zkEVM efficiency, lower fees, and specialized infrastructure like PolygonID and Supernets.
Q: How does Polygon's NVT ratio affect its price outlook?
A: A rising NVT ratio suggests possible overvaluation relative to transaction volume, signaling caution—even if price rises due to speculation.
Q: What are the upcoming catalysts for MATIC?
A: Launch of NFTs on zkEVM mainnet, continued enterprise adoption via Google Cloud tools, and potential integration into traditional finance products.
Q: Where can I track MATIC's on-chain activity?
A: Use platforms like IntoTheBlock or Artemis to monitor wallet flows, gas usage, TVL trends, and investor behavior.
Q: Can developers easily build on Polygon now?
A: Absolutely. With new SDKs, managed node services via Google Cloud, and improved identity tools via PolygonID, development barriers have significantly lowered.
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Final Thoughts
After months of subdued performance and investor hesitation following Ethereum’s transition to PoS, Polygon is reasserting its relevance through technological advancement and strategic alliances.
With upgrades to PolygonID, robust zkEVM metrics, surging gas demand from DeFi apps, and partnerships with giants like Google Cloud and Franklin Templeton, the network is positioning itself not just as a scaling solution—but as a foundational layer for next-generation Web3 applications.
While technical indicators like the elevated NVT ratio warrant caution, the broader ecosystem momentum suggests that MATIC may be laying the groundwork for sustainable growth beyond short-term market narratives like “sell in May.”
As innovation continues and real-world adoption expands, Polygon remains a key player to watch in the evolving landscape of decentralized infrastructure.
Core Keywords: Polygon MATIC, zkEVM, Layer-2 scaling, decentralized identity, Google Cloud blockchain, Franklin Templeton crypto, MATIC price analysis, PolygonID