Polygon (MATIC) Rally About to End as Competitors Devour Market Share

The native MATIC token of the Ethereum scaling platform Polygon rallied 16.4%, coinciding with the launch of the hotly anticipated Polygon 2.0 test network

On October 4, the highly anticipated Polygon 2.0 test network Goreli launched, and this coincided with a 16.4% increase in the native MATIC token of the Ethereum scaling platform Polygon. Thoughts about the delayed acceptance of zkEVM and the departure of a founding team member quickly stifled the good energy.

After the Goreli test net launch, MATIC lost its gains by dropping 10.6% up to Monday, wiping out its profits. The reversal eliminated the optimism that was initially created by version 2.0 expectations.

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To make Ethereum transactions substantially quicker and more affordable, Polygon 2.0 uses zero-knowledge (ZK) rollup technology. The update has been hailed as the solution to Ethereum scaling problems. In contrast to rivals, however, activity on Polygon’s first ZK solution, the zkEVM subnet, has been extraordinarily high thus far. Lackluster zkEVM adoption raises questions about the feasibility of scaling goals.

Despite the fact that the Goreli test net release was a significant accomplishment, traders might now be realizing that the deployment is still some time off. Getting ecosystems to adopt the new solutions involves many execution risks. As interest dwindles, MATIC trades at almost its pre-announcement level right now. With more than 7,000 decentralized apps, Polygon has strong developer traction.

The layer 2 developments may be able to bring user activity closer to Ethereum levels, which would be advantageous for MATIC. The group’s capacity to perform, though, is still in doubt. Between bullish scaling potential and the realities of blockchain rollout, MATIC appears to be stuck. If Polygon can take advantage of advancements, it will likely remain one of the most intriguing Ethereum sidechain tales.

The 16% increase was overly optimistic, and this caused MATIC’s price to overshoot. In advance of announcements, the developments were probably already factored in.

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