- Polygon saw a decline in DEX volume and network growth despite reaching a milestone in DEX volume.
- Growing NFT market and ongoing zkEVM developments were positive for Polygon’s long-term potential despite the current setbacks.
Polygon [MATIC] recently reached a new milestone in terms of decentralized exchange (DEX) volume. It crossed $50 billion in DEX volume over the last 12 months, according to a tweet on 11 January.
$50B+ in DEX volume on @0xPolygon over the last 12 months🤌 pic.twitter.com/ZSDnEvwcrj
— Narb (@NarbTrading) January 10, 2023
Read Polygon’s [MATIC] Price Prediction 2023-2024
However, despite reaching this watershed number, DEX volume on Polygon declined over the last few months, according to data from Dune Analytics. This decline in volume could be due to a variety of factors, such as increased competition from other platforms or a general decline in trading activity in the crypto market.
This decline in volume suggested that even though Polygon reached a new milestone, in terms of DEX volume, the growth of Polygon in this area decelerated.
Source: Dune Analytics
Not all hope is lost for Polygon
The declining DEX activity, however, did not affect Polygon’s NFT market.
Polygon’s growing NFT marketplaces showed positivity, with a spike in NFT volume as reported by Dune Analytics data. One likely reason for this spike would be the recent launch of the Donald Trump NFT collection.
Furthermore, Polygon’s recent collaboration with social media giants such as Reddit and Instagram could also be factored in. These collaborations have helped bring more attention and exposure to the Polygon ecosystem.
Source: Dune Analytics
Talking about MATIC
Moving on to the MATIC token – simply put, the network growth and velocity for the token declined, along with daily active addresses. The latter is evidence of fewer active users on the network.
Source: Santiment
This aforementioned decline impacted MATIC holders’ profitability as well, which was showcased by the MVRV ratio, which declined over the past month.
This suggested that most MATIC holders would lose money if they sold their holdings at press time. Moreover, the positive long/short difference implied a majority of long-term holders were experiencing losses at press time.
Are your MATIC holdings flashing green? Check the MATIC profit calculator
Source: Santiment
Despite these short-term setbacks, Polygon continued to push forward with its ongoing developments in zk-EVM, which aims to make it easier to build and deploy zk-rollup dApps on the platform. The platform’s focus on scalability and performance is expected to help attract more developers and users in the long run.
At press time, the price of the MATIC token was $0.859, but it grew by 1.41% in the last 24 hours, according to CoinMarketCap.
