Belgium (CoinChapter.com) — As most alternative cryptocurrencies are going through a bullish run lately, it becomes essential to cull the wheat from the chaff. MATIC, the native asset of Polygon, attracts a lot of hype from investors. It is worthwhile to take a look at the broader ecosystem to figure out what is going on.
MATIC Price Performance
The first thing people look at for cryptocurrencies is the current price and its recent performance. MATIC has gone through a bullish spell lately, recording a monthly gain of just over 131%. zooming out further, there is a 5103% increase for the year. All of these statistics paint a bullish case for Polygon’s native asset, but sustaining it requires more than speculation and FOMO.
Determining whether there is a chance this momentum will continue can be a bit tricky. A lot is going on behind the scenes of Polygon, and the social activity is picking up. However, it remains pertinent to analyze the bigger ecosystem and its potential growth before making any financial commitments.
A Growing Ecosystem
Based on a recent infographic shared by Coin98, it is safe to say the Polygon ecosystem is expanding rapidly. With a strong focus on decentralized finance, NFTs, and gaming-related efforts, Polygon is branching out across all of the popular segments on the market. Blockchain ecosystems need to be versatile and cater to the many needs of different users.
More importantly, the network’s technology also proves interoperable with some of the biggest decentralized service providers in the industry. Whether it is wallets, oracles, DAO solutions, or B2B-oriented solutions, Polygon is popping up everywhere. On paper, this is a bullish signal for the ecosystem, but its impact on the MATIC token will be far less outspoken unless significant projects and partnerships are announced to trigger market excitement.
MATIC Exchange Supply Keeps Dwindling
For Bitcoin and Ethereum, it is always interesting to check out their current supply on centralized and decentralized exchanges. Viewbase often provides good insights, although it doesn’t always track every trading platform. Its statistics for MATIC are very interesting, though. The ongoing supply decrease on exchanges can impact the price somewhat.
As things said, there is just over 100 million MATIC available on the tracked trading platforms. That may seem like a lot, but it isn’t necessarily. MATIC has a circulating supply of over 6 billion tokens. That means 1.5% of its supply is currently found on trading platforms, which is rather intriguing. A further decrease in supply is likely to occur over the coming weeks.
Polywhale Creates Division
Every popular ecosystem will see at least one pyramid scheme over the years. Bitcoin and Ethereum have seen multiples so far, and Polygon might be home to one as well. Known as Polywhale, it is a yield farming solution that offers some very high returns. Although that is not uncommon in the DeFi world, such an approach always raises many different questions.
When yield farming platforms issue native tokens as rewards, it is normal to see somewhat high rewards at first. It also appears the platform has been audited, lending some more credibility to this platform. It is a matter of making up one’s mind to determine whether the native Polywhale token will prove worthwhile for interested users. Yield farming always carries certain financial risks on any blockchain.
Based on the current metrics and overall developments behind the scenes, it is not difficult to see why people are enthusiastic about MATIC. Although these Polygon ecosystem upgrades are all prominent, they may not automatically bring more value to the token itself. It is crucial to separate the ecosystem from the token, as they are two different things.
Moreover, the current price of MATIC already seems somewhat high when considering its circulating supply. A token with a supply of over $6 billion and a maximum supply of $10 billion will not necessarily see a value higher than $5 for some time to come. There is a glass ceiling as to what MATIC can achieve unless some significant developments push it higher.
Featured image by Pixabay, chart by TradingView.