Polygon Nears 10 Million Users: Can This Milestone Boost MATIC Prices?

• Despite increasing popularity among other cryptocurrencies, Polygon [MATIC] continues to attract a growing user base, nearing 10 million users.
• However, the network faces challenges with a significant decline in DeFi activity, DEX volumes, TVL, and overall revenue, which could impact its scalability and ability to fund improvements.

Despite the increasing popularity of other cryptocurrencies and blockchain networks, Polygon [MATIC] continued to attract a growing number of users to its platform. Data from Token Terminal indicated that the number of users on the Polygon network was close to 10 million at the time of writing.

The surge in activity on the network was driven by the popularity of the Polygon ecosystem. However, the state of DeFi on the network wasn’t as positive despite the rising activity. An analysis of Artemis’ data revealed that the DEX (Decentralized Exchange) volumes on the network had fallen significantly over the last few days.

Additionally, the TVL (Total Value Locked) on the Polygon network also saw a notable decline. According to the data, the daily TVL on Polygon dropped from $1 billion to $942 million over the last few days.

Due to these factors, the fees generated by the network have materially decreased. Consequently, the network’s revenue has also declined significantly. If these issues persist, it will be challenging for Polygon to scale and secure the funds needed for network improvements.

Courtesy: Artemis

The number of code commits on the Polygon network has significantly declined over the past month. Additionally, the number of core developers has also dropped considerably.

If this trend continues, the pace of updates and upgrades on the network could slow down. These updates and upgrades are crucial for improving sentiment, attracting new users, and retaining existing ones.

A Look Into Polygon (MATIC) Price Action

The price of MATIC was also underperforming. At the time of writing, MATIC was priced at $0.7062, reflecting a 1.82% decline over the past month.

During this period, the token’s network growth plummeted, indicating a drop in interest from new addresses. Additionally, transaction volume around Polygon fell significantly, implying a decrease in the frequency of MATIC trades.

Courtesy: Santiment

While things don’t seem to be very exciting for Polygon at this stage, it has made some important progress in other areas. Polygon has maintained its position as one of the largest Web3 ecosystems globally, with data showing it recorded the second-highest number of transactions over the past six months.

In this period, Polygon surpassed 800 million transactions, ranking second in the industry after TRON and just ahead of BNB Chain, as reported by Crypto News Flash.

The Polygon team has announced the launch of pessimistic proofs using SP1 to enhance secure cross-chain interoperability. SP1, the leading zkVM solution built with Polygon Plonky3, will be utilized to create pessimistic proofs for the AggLayer, ensuring the security of the aggregated network. By generating pessimistic proofs with SP1, Polygon’s AggLayer aims to facilitate secure, cross-chain interoperability, per the Crypto News Flash report.

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