Layer-two (L2) options for the Ethereum community have grow to be a preferred matter of dialogue and hypothesis on their related tokens backed the large rally seen in most of the protocols this yr. The parabolic development of the decentralized finance (DeFi) and nonfungible token (NFT) sectors additionally led to a surge in the price of finishing up easy transfers and this prompted builders and buyers emigrate to L2-supportive platforms.

One L2 answer that noticed its token worth rise to new highs earlier within the yr and now appears poised to make one other breakout increased is Polygon (MATIC), a proof-of-stake blockchain protocol that aggregates scalable options on Ethereum to help a multi-chain ecosystem.

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Information from Cointelegraph Markets Pro and TradingView reveals that MATIC hit a low at $1.01 on Sept. 21, and over the previous few months, the worth has been in a gentle uptrend, bringing the altcoin above the $2 mark on Dec. 1. 

MATIC/USDT 1-day chart. Supply: TradingView

Polygon’s ecosystem is increasing and proof of this may be seen within the improve in protocol launches, cross-chain migrations, the launch of a Polygon-focused exchange-traded product (ETP) and a gentle uptick in person exercise.

Ecosystem growth

One of many greatest drivers of MATIC worth and on-chain exercise has been the addition of latest protocols to the Polygon community throproject launches and cross-chain migrations.

Most just lately, IDEX decentralized trade introduced that it might launching v3 of its trade on the Polygon community, making it the primary hybrid liquidity DEX on Polygon.

The Polygon community has seen mission launches from NFT initiatives just like the OpenBiSea NFT market and gaming/DeFi platforms like Rainmaker Video games, Harvest Finance and Jarvis Community.

Presently, the Uniswap group is within the technique of voting on whether or not so as to add Polygon help for Uniswap v3 and after a majority sure Part 1 vote on Nov. 25, the method has shifted into Part 2.

Rising institutional help

Another excuse for the bullish worth motion for Polygon has been elevated curiosity from institutional buyers. A number of exchange-traded merchandise (ETPs) for Polygon have been listed in current months, together with the Osprey Polygon Belief in September and the 21Shares Polygon ETP in November.

Polygon can be included on the checklist of belongings being explored by the Grayscale Investments as a possible Belief candidate.

The community has additionally benefited from a $20 million funding fund launched by Wintermute, a digital asset market maker centered on serving to to bootstrap the event of decentralized purposes on Polygon.

Presently, the Polygon community is receiving elevated consideration because it prepares to host a ZK Summit on Dec. 9 the place builders will focus on the “present state and way forward for zk-STARKs and purposes of zero-knowledge proofs.”

Associated: IDEX to launch hybrid liquidity decentralized exchange on Polygon

Improve in energetic customers and wallets

A 3rd cause for the bullish worth motion seen in MATIC has been the regular improve of customers on the community as evidenced by the rise in pockets addresses holding a stability.

Polygon addresses with a stability vs. MATIC worth. Supply: Intotheblock

As proven within the graph above, the variety of Polygon wallets holding a stability has steadily elevated all through 2021 and is at present at an all-time excessive of 282,760.

Proof of the elevated exercise may also be found within the knowledge for whole income generated from charges on the community, which has been steadily rising over the second half of 2021.

Polygon worth vs. whole income. Supply: Token Terminal

As new protocols proceed to checklist on the Polygon community, these stats are more likely to rise if new customers proceed to make use of the platform to flee the excessive charges seen on the Ethereum community.

VORTECS™ knowledge from Cointelegraph Markets Pro started to detect a bullish outlook for MATIC on Oct. 15, previous to the current worth rise.

The VORTECS™ Rating, unique to Cointelegraph, is an algorithmic comparability of historic and present market circumstances derived from a mixture of knowledge factors together with market sentiment, buying and selling quantity, current worth actions and Twitter exercise.

VORTECS™ Rating (inexperienced) vs. MATIC worth. Supply: Cointelegraph Markets Pro

As seen within the chart above, the VORTECS™ Rating for MATIC spiked into the inexperienced zone on Oct. 15 and reached a excessive of 94 round 48 hours earlier than the worth started to extend by 57% over the subsequent six weeks.

The views and opinions expressed listed below are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer entails threat, it’s best to conduct your individual analysis when making a choice.