Polygon Jumps in Crypto Market Rebound, as Ether Congestion Drives Adoption for Rivals
MATIC, the native token of Polygon Network, was gaining the most in a broad-based rally in cryptocurrencies on Monday, as investors look to layer 2 scaling solutions amid continued stress on Ethereum’s network.
Messari data shows the MATIC price has risen by 40% in the past 24 hours, hitting 6.5-week highs above $0.50, for a 25-fold gain on a year-to-date basis. Bitcoin (BTC), the largest cryptocurrency, was up 6% over the past 24 hours, while No. 2 ether surged 10%.
MATIC, now with a market capitalization of more than $2.5 billion, rose about 5% in price last week, defying a sell-off in cryptocurrencies as markets digested the prospects of U.S. President Joe Biden’s proposed capital gains tax hike. If passed, the measure could dampen demand for riskier investment assets, including bitcoin as well as other fast-moving digital assets.
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Polygon’s organic growth is powering its price higher, Alex Svanevik, CEO of blockchain data company Nansen, told CoinDesk in a Telegram chat.
“Polygon has seen 10x rise in the number of transactions since the start of the year,” Svanevik said. “That’s a significant increase.”
Polygon getting more traction
Record activity on Ethereum has led to network congestion and high transaction costs this year. The dynamic in turn has driven an increase in demand for alternative “smart-contact” blockchain networks, such as Binance Smart Chain (BSC), along with scaling projects like Polygon that provide faster and cheaper transactions using layer 2 sidechains. These are tangential networks running alongside the main Ethereum blockchain.
In recent weeks, Polygon has won increasing adoption, with top names from the world of decentralized finance (DeFi) announcing integration with the layer 2 scaling solution in a bid to bypass congestion and high fees on Ethereum’s network.
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Story continues
“Polygon, the top Ethereum layer 2 is going nuts! Integrations with Aave, Pooltogether, Sushiswap, Open Sea, Curve Finance, Decentraland, and loads of other big #defi applications,” market analyst Lark Davis tweeted Sunday.
The Aave-Polygon integration announced March 31 has already brought over $1 billion in liquidity into Aave protocol, according to a tweet from Polygon co-founder Mihailo Bjelic. Aave was the third-largest DeFi protocol at press time, with $6.33 billion in “total value locked” (TVL), which is the amount of collateral put into the system in exchange for loans or other transactions.
The investor community is cheering the outlook for lower fees resulting from Aave’s decision to adopt Polygon.
“Being able to interact with Aave without worrying about gas fees is a game-changer,” one user tweeted. “Now I understand why Aave is the powerhouse of DeFi.”
Bjelic predicted that other DeFi protocols would see Aave-like growth.
Curve Finance adopted Polygon’s scaling solution earlier this month, saying that Polygon’s high-speed and low-cost infrastructure is the perfect match for its mission to allow for seamless exchange of stablecoins.
“Scaling narrative is accelerating, courtesy of Polygon and its layer-2 aggregator vision,” Denis Vinkourov, head of research at the trading sentiment data provider Trade the Chain, told CoinDesk in a Telegram chat. “The popular saying, ‘Build it, and they will come,’ couldn’t be any more relevant after the likes of Curve and Aave announced support” for Polygon.
“Looking ahead, it’s not just Polygon that will continue to attract new capital, but so will decentralized exchanges such as QuickSwap,” Vinokourov said.
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(Bloomberg) – China’s plan to control the transport of live hogs to rein in the spread of African swine fever is set to reshape the market and create regional price differences in the world’s biggest consumer and producer of pork.The country will be split into five regions from May, the agriculture ministry said last week, and live pigs will not be allowed across the boundaries. The move will push down pork prices in the main producing areas in the north and increase the cost of the popular protein in demand centers in the south. If the controls stay in place over the longer term, companies will be forced to open more pig farms closer to where their customers are.China’s hog industry was devastated by African swine fever in 2018 and, while herd sizes have recovered since then, a recent resurgence drove up pork imports to a record last month. Prices have fallen, however, as the culling of herds increased domestic supply. Pigs are a very important source of protein in China with the market for pork sales worth about 2 trillion yuan ($308 billion) a year, according to figures from the Dalian Commodity Exchange.Some 20% of China’s pigs, or about 140 million live animals, are transported each year, mainly from the northeast to the south to meet demand for fresh meat, said Lin Guofa, a senior analyst at consultancy Bric Agriculture Group.“Some areas that used to call themselves no-pig counties or no-pig cities will have to build pig farms,” he said. But transport of frozen meat instead of live hogs will be encouraged, which will lead to an expansion of the cold-chain industry, Lin said.Northeast China is the top pig-producing region due to an abundant corn supply and relatively easy access to land, while the northwest region of Xinjiang has also been identified as an area in which to expand pork production.The controls will depress prices in the north in the short term and push them up in the south, according to Wang Zhong, chief consultant at Systematic, Strategic & Soft Consulting Co. That may eventually prompt big pork producers – including Muyuan Foodstuff Co., New Hope Liuhe Co. and Wens Foodstuff Group Co. – to build more hog farms in the south and more slaughtering facilities in the northeast and northwest.The new rules are similar to systems developed in Brazil and Spain, which have been successful in getting rid of African swine fever, the agriculture ministry said. While “the virus is still widely distributed and difficult to eradicate in the short term,” regional controls are an “inevitable choice,” it said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.