Arbitrum

DeFi

SushiSwap

Base

Polygon

Layer 2 scaling solution Polygon has maintained strong network activity even as the broader cryptocurrency market and its native token, <a href="https://www.newsbtc.com/news/matic/polygon-active-addresses-matic/" target="_blank" rel="noopener ">MATIC</a>, experienced a downturn in the second quarter of 2024, according to a new report from market intelligence platform Messari. 
<h2 id="polygon-weathers-crypto-market-downturn">Polygon Weathers Crypto Market Downturn</h2> 
While MATIC saw a 44.3% drop in its circulating market cap to $5.5 billion over the quarter, placing it as the 20th largest crypto asset (currently at the 26th position), the protocol’s on-chain metrics remained strong.&nbsp; 
This is in contrast to larger cryptocurrencies such as Bitcoin and Ethereum, which saw their <a href="https://www.newsbtc.com/news/polygon-announces-date-for-matic-to-pol-token-upgrade-price-drops-7/" target="_blank" rel="noopener ">market capitalization</a> decline by 12% and 6%, respectively, over the same period. 
The key driver behind Polygon’s stability in network performance during the second quarter of the year, <a href="https://messari.io/report/state-of-polygon-q2-2024" target="_blank" rel="noopener nofollow">according</a> to Messari, was the implementation of Ethereum Improvement Proposal (EIP) 4844 on the Polygon mainnet in Q1 2024.&nbsp; 
This upgrade, which introduced “blobs” to the network, significantly reduced the average <a href="https://www.newsbtc.com/all/polygon-records-over-1-million-active-addresses-impact-on-matic-price/" target="_blank" rel="noopener ">transaction fee</a> on Polygon from $0.017 to just $0.01, resulting in a decrease of 41.1%. 
As a result, Polygon’s revenue derived from network transaction fees fell 40.6% to $4 million in Q2 2024. However, this drop was not due to a decrease in user activity, but rather the lower fees enabled by EIP-4844. In fact, Polygon’s user metrics continued to soar, with the protocol seeing strong growth across several key indicators.&nbsp; 
<h2 id="on-chain-activity-and-ecosystem-growth">On-Chain Activity And Ecosystem Growth</h2> 
According to the report, the average number of <a href="https://www.newsbtc.com/news/polygon-matic-turns-bullish-after-losing-streak-is-a-1000-rally-possible-from-here/" target="_blank" rel="noopener ">daily active addresses</a> climbed to 1.2 million, a 47.6% increase quarter-over-quarter (QoQ). The average number of daily returning addresses rose even more, up 50.5% to 1 million. Moreover, new addresses being added to the network grew by 31.7% to 167,800 per day on average. 
The report also notes that Polygon’s transaction volume also held steady, averaging 4.1 million daily transactions, just below its <a href="https://www.newsbtc.com/news/bitcoin/economist-predicts-90-chance-bitcoin-hits-new-high-by-march-2025/" target="_blank" rel="noopener ">all-time high</a> and representing a 3.9% increase from the prior quarter.&nbsp; 
In comparison, fellow Layer 2 networks Arbitrum (ARB) and Base saw average daily active addresses of 545,000 and 528,000 respectively. 
While Polygon’s decentralized finance (DeFi)<a href="https://www.newsbtc.com/news/ethereum/ethereum-will-reach-8000/" target="_blank" rel="noopener "> total value locked</a> (TVL) dropped 22.9% to $1 billion, this was largely attributable to the decline in MATIC’s price rather than a net outflow of capital. Messari reported that TVL denominated in MATIC actually increased by 38.1% to 1.8 billion tokens. 
However, DeFi protocols on Polygon saw mixed results, with Aave, Uniswap, and SushiSwap all experiencing declines in TVL ranging from 13% to 25%. Quickswap saw the largest drop at 35%. 
Lastly, Polygon’s non-fungible token (NFT) market also remained stable, with average daily NFT volume dipping slightly by 5.7% to $1.8 million. However, the number of daily NFT sales actually increased by 1.8% to 52,000, underscoring ongoing collector interest. 
<img loading="lazy" decoding="async" class="size-large" src="https://www.tradingview.com/x/zj6n4DpF/" alt="Polygon" width="1814" height="858"> 
At the time of writing, MATIC has experienced a mere 5% increase to a trading price of $0.512, after hitting a 2-year low of $0.428 on July 5th.&nbsp; 
Coupled with this worrying price action, the token has seen a 30% decrease in trading volume over the past few days, amounting to $197 million, according to CoinGecko <a href="https://www.coingecko.com/en/coins/polygon" target="_blank" rel="noopener nofollow">data</a>. All of this has resulted in an 82% difference to MATIC’s all-time high of $2.91, which was set during the 2021 bull run.&nbsp; 
Featured image from Shutterstock, chart from TradingView.com

Polygon Ecosystem On Fire: Daily Active Addresses And Transactions Soar, MATIC Gains 5%

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