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As cryptocurrencies continued to recover Tuesday from last weekend’s massive sell-off, Polygon, an Ethereum scaling product, was among the biggest gainers.
MATIC, the native token of the Polygon blockchain, surged from $1.79 on Monday morning to $2.50 in 24 hours, a nearly 40% gain. At the time of publication, the price dipped to $2.32.
The increase occurred as more users have become aware of Polygon’s lower costs and greater efficiency and scalability. Speculation has also mounted over what the firm has called an “exciting announcement” scheduled for Thursday at Polygon virtual “zk day.”
The event will center around the applications of zk-STARKs and zero-knowledge (ZK) proofs, a type of cryptography that can verify whether a given statement is true without revealing the data that proves it.
“I think investors are finally waking up to the fact that Polygon is essentially an index fund of Ethereum scaling solutions and the 800-pound gorilla in the [zero-knowledge] space,” Dean Thomas, Polygon’s global head of institutional capital, said.
— Polygon | $MATIC - We're hiring! (@0xPolygon) December 7, 2021
Polygon is a protocol and framework for building and connecting Ethereum-compatible blockchain networks, offering an ecosystem with lower transaction costs and faster speeds than Ethereum.
ZK-rollups are a technology that helps Ethereum scale without compromising the blockchain’s decentralization and security.
Matter Labs’ zkSync and StarkWare’s StarkNet are both examples of ZK-based Ethereum scaling tools. Both projects also closed $50 million funding rounds in November. ZkSync’s funding round was led by Andreessen Horowitz and StarkNet’s by Sequoia Capital.
In August, Polygon merged with ZK protocol Hermez in a $250 million deal that brought ZK rollup capabilities to Polygon. Polygon followed up in September with a partnership with audit giant Ernst & Young to build Polygon Nightfall, a privacy-focused ZK-rollup geared toward enterprise use.
“[Polygon’s] priority is to help scale Ethereum and ZK is the biggest bet to achieve it,” a spokesperson for Polygon told CoinDesk.
In a newsletter this morning, Polygon reported all-time high network revenue for November and reached over 300,000 active addresses.
— Token Terminal (@tokenterminal) December 7, 2021
Polygon also saw record monthly volume of nearly $60 million on non-fungible token (NFT) marketplace OpenSea last month.
“We are significantly undervalued by any metric be it daily active users, transaction volume, or number of dapps being built on our platform,” Thomas told CoinDesk.
Earlier this month, decentralized exchange IDEX launched its v3 on Polygon, aiming to combat high fees and failed transactions that have plagued users of Ethereum’s Uniswap platform.
Projects related to NFTs or the metaverse are also moving over to Polygon because of the high minting and transfer costs on Ethereum.
Oh man I found a game! You can pay 50 MANA ($150 USD) to jump into a volcano! Except, it's temporarily closed because gas fees are too high, they're waiting to launch on Polygon to reopen. Guess metaverse is also facing supply chain issues pic.twitter.com/S82tpc0zCz
— Anthony Lee Zhang (@AnthonyLeeZhang) December 5, 2021
Polygon’s MATIC token is now the 14th-largest cryptocurrency by market cap, with a value of $16.2 billion, according to data from CoinGecko.
MATIC is still trading below its all-time high price of $2.62 in May.