Despite a lack of recent price increases, Polygon’s network activity remains strong. While the token grabs headlines, the underlying Polygon network has been quietly booming.
For 25 days, daily active addresses on Polygon have consistently surpassed 1 million. This indicates significant growth in network usage and a potentially expanding user base.
This surge in activity is attributed to the popularity of the Polygon NFT and DeFi ecosystems. Interest in both sectors has risen massively, with NFT trading volume growing substantially.
The increase in NFT activity translates to more revenue for network validators, creating a sustainable income stream for Polygon’s growth.
DeFi on Polygon has also grown, with Decentralized Exchanges (DEXs) and revenue generation experiencing positive trends.
However, there’s a wrinkle. Despite this activity, Polygon’s Total Value Locked (TVL) has declined. This suggests new users aren’t necessarily locking funds into DeFi protocols on Polygon.
Possible reasons for the TVL dip include users moving funds to other DeFi platforms that offer better yields or features or simply withdrawing funds for profit-taking.
While the price of MATIC has risen and network activity remains strong, new address creation has fallen. This suggests some new interest may be fading.
Overall, Polygon’s network shows strong signs of life, but questions remain about the long-term commitment of new users and the health of the DeFi sector.