Polygon (MATIC) seems to be showing some negative performance compared to its crypto rivals. In the last 12 months, in fact, MATIC is down -32%, while other layer-2 coins rivals, such as IMX, OP and SKL are all up in price.

Polygon (MATIC) and its negative performance compared to rival layer-2 cryptos

According to what observed, it seems that Polygon (MATIC) is showing a rather negative price performance compared to its rival layer-2 cryptos.

And indeed, the price chart of MATIC shows a dump of -32% in the last 12 months. At the time of writing, MATIC is worth $0.95, compared to $1.38 a year ago. 

As is well known, Polygon is the layer-2 of Ethereum, known for its low costs and higher scalability compared to Ethereum’s main blockchain. However, some argue that the crypto MATIC was overvalued during the 2021 bull run and that these are the real results. 

Not only that, compared to Polygon, there are also other layer-2 cryptos that seem to be experiencing price pumps in the last 12 months. An example is the cryptos IMX, OP, and SKL, which have increased by +216%, +46%, and +50% respectively.

MATIC, which remains in 14th place for market capitalization, is not even following the general trend of cryptocurrencies anymore. In fact, the price of Bitcoin (BTC) is now up +108% compared to a year ago, and Ethereum (ETH) itself is up +75%. 

Polygon (MATIC): the crypto loses market share and interest compared to its 2021

The loss of interest in Polygon by traders compared to the trend of 2021, could be based on the effect of the Ethereum Dencun update, scheduled for March 12th.

This upgrade favors ZK-rollup technology, but will not allow Polygon to reduce costs, unlike the other L2 solutions Arbitrum and Optimism. 

In this regard, Katie Talati, research director at the digital asset management company Arca, emphasized the reasons why Polygon is underperforming:

The upcoming Ethereum Dencun update will reduce costs for Layer 2 to send data to the Ethereum mainnet. Although Polygon will benefit from the update, other L2s like Arbitrum and Optimism, which use optimistic rollups, will see more significant cost reductions, causing a rally in these L2s. Most of the costs for optimistic rollups come from forwarding transaction data to Ethereum (which is what Dencun will reduce), but they hardly publish fraud proofs. On the other hand, Zk rollups publish fraud proofs much more frequently and therefore would not see the benefits of reduced transaction data costs. The second reason for underperformance is that Ryan Wyatt, the former president of Polygon, left last year to become Head of Business Development at Optimism. Many believe Wyatt was responsible for Polygon’s major partnerships and his departure was a blow to Polygon’s growth efforts”

Staying on the topic of competitors, for Kenny Hearn, chief investment officer of SwissOne Capital, MATIC is in dump also due to the emergence of Arbitrum (ARB), especially in DeFi trading. 

Partnerships will continue even in 2024

Despite MATIC crypto not performing for over a year, Polygon Labs continues to forge new partnerships even in this 2024. Here are some. 

At the beginning of the year, Polygon announced its collaboration with Fox Corporation to introduce Verify, an innovative multimedia platform based on blockchain. This is a solution that tracks multimedia content and facilitates the negotiation of licensing agreements with AI companies.

Not only that, the famous crypto company Immutable launched at the end of January, a new ZkEVM network based on Polygon, which aims to be the only blockchain designed and developed for Web3 gaming.

Even Friendzone, a promising social market, is getting ready to start its operations on the Polygon PoS blockchain from February 26th. In practice, here, Polygon will serve to build social apps. Friendzone has also announced its intention to expand its scope to Polygon zkEVM.