Increasing use of Ethereum, leading to extremely high fees on the network, has been resulting in BSC and Solana (SOL) getting traction. But it is not only layer 1 chains that are gaining support, but layer 2 solutions are getting just as much usage. Polygon, previously known as Matic, is one such project that is working on transforming Ethereum (ETH) into a multi-chain ecosystem with secured Layer 2 chains and standalone chains. Currently, the side chain has $3.88 billion of value locked in it, the highest among any other side chain. Next in line is ZKSwap, with under $600 million in value locked. Sidechain xDAi has under $200 million, while Optimism has just under $100 million locked on it.
Polygon’s Proof of Stake sidechain also sees a significant increase in its transaction volume, so much so that it is exceeding Ethereum’s transaction count by nearly 20%. “Polygon is currently doing ~1M daily txs and has onboarded numerous DeFi blue chip projects, including AaveAave, which has >$2B in liquidity there — disproving the “Ethereum can’t scale” narrative,” noted Spencer Noon, general partner at Variant. Compared to Ethereum’s 150 million unique addresses and BSC’s 61 million, Polygon still has only about 400k unique addresses. And top 3 addresses sent 573,000 transactions last week, with arbitrage trades making up a large majority of it, as per Nansen. Also, only 25% of all Polygon addresses ever sent transactions on Ethereum. One of the primary reasons for the growth in transactions can be attributed to its native DEX Quickswap, which is accounting for half of those transactions. A big increase was seen at the end of last month, seeing as much as $260 million in volume and over half a billion dollars in liquidity on QuickSwap.
As a result of this growth, the tokens are also enjoying an uptrend. Quick is currently trading at $1,053, near its all-time high of $1,590 hit on Friday, presenting a 500% gain in the last week. The same day, Matic hit a new ATH of $0.937. Currently, at $0.8118, MATIC is up from $0.3 at the beginning of last month and $0.0176 at the start of the year.