- Polygon has beaten Ethereum in terms of gas consumption and overall activity.
- The price of MATIC has fallen significantly in recent days.
Polygon [MATIC] has witnessed a massive increase in activity over the past few months and has slowly but surely attracted the attention of multiple users.
Polygon races to the top
Due to Polygon’s growing popularity, it outperformed Ethereum in terms of gas consumption. Moreover, Polygon had surpassed Ethereum in terms of monthly active users.
Source: token terminal
If users flock to Polygon for its lower fees and faster transactions, it could slow Ethereum’s adoption rate.
However, it is important to remember that Polygon is not a direct competitor, but rather a Layer-2 scaling solution built on top of Ethereum. In the long run, a thriving Polygon ecosystem could actually benefit Ethereum.
What about MATIC?
Although the Polygon network made significant progress, MATIC could not see green.
Although MATIC’s price moved sideways for the most part, a steep decline was observed when the price reached the $0.7413 level on June 6.
The OBV (On Balance Volume) for MATIC decreased significantly during this period. A declining OBV during this period suggested that selling pressure was greater than buying pressure for MATIC.
A positive CMF, even at a low value of, say, 0.03, indicates that some money could still flow into MATIC despite the drop in OBV.
A positive CMF with lower trading volume could indicate that larger investors or whales are accumulating MATIC despite the short-term price decline.
Source: trading view
In addition to the interest in whales, there was also retail interest in MATIC.
AMBCrypto’s analysis of Santiment’s data indicated that addresses holding anywhere from 0 to 100 coins had increased their accumulation rate.
The increase in MATIC’s accumulation suggests that many traders are seeing MATIC’s recent price drop as an opportunity to purchase the token at a discount.
Source: Santiment
Realistic or not, here is the market cap of MATIC in terms of ETH
Despite MATIC struggling to see growth in terms of price, Polygon managed to do very well in the DeFi sector.
Particularly Polygon’s Proof-of-Stake (PoS), zero-knowledge Ethereum [ETH] Virtual Machine (zkEVM) and Coconut Development Kit (CDK) have become the favorite options for DeFi developers.