Ethereum’s Merge date is days away and the countdown has many individuals questioning concerning the destiny of layer-2 scaling options.
You will have seen Ethereum-associated cryptocurrencies and tokens reminiscent of MATIC are up considerably in the previous couple of weeks.
Nevertheless, the transfer to proof of stake will clear up a number of the scalability points related to Ethereum, thus the curiosity about the way forward for L2s.
Polygon is among the layer-2 options whose future could be at stake because of the Merge.
Nevertheless, that can almost definitely not be the case.
Right here’s why
Though one in all Polygon’s advantages is the fast transaction depend which is miles forward of the Ethereum mainnet. Even so, Polygon additionally gives considerably decrease charges.
Congestion and excessive ETH costs are the primary causes for costly mainnet charges.
ETH’s worth has gone up forward of the Merge and can possible proceed rallying. This implies the transition to the PoS (Proof of Stake) consensus mechanism will do little to decrease fuel charges.
Polygon and different layer-2 options will proceed working to supply decrease charges, therefore MATIC will nonetheless be in demand.
Nonetheless, there may be extra to Polygon than meets the attention.
Partnerships with main enterprises reminiscent of Disney and Mercedes Benz are simply the tip of the proverbial iceberg.
Polygon plans to turn out to be the bridge for the switch of liquidity from conventional finance to crypto.
These developments would possibly set off an exponential improve within the demand for MATIC. Thus, aiding its long-term worth motion.
MATIC’s worth motion
MATIC was up by 163% at press time on 4 August, from its backside in June. It has been ascending inside a assist and resistance vary, which is at present approaching the assist line.
Supply: TradingView
MATIC’s worth motion was headed upwards in the direction of the top of final week.
Nevertheless, its worth motion noticed a big pullback which kicked off on the finish of July.
That is according to sudden and heavy outflows from the provision held by prime addresses.
Supply: Santiment
These outflows had been arguably attributable to panic promoting courtesy of the promoting stress within the final three days and because of MATIC’s vesting schedule.
There was additionally a pointy spike in MATIC’s lively addresses within the final 24 hours of 4 August.
That is possible because of the return of buyers who beforehand cashed out in anticipation of the promote stress from the vesting schedule.
Buyers are actually shopping for in decrease, now that the vesting has already taken place.
Even the highest addresses have elevated their balances within the final two days.
Supply: Santiment
The fast re-accumulation simply days later means that buyers count on MATIC to proceed rallying forward of the merge.
Though MATIC at present appears bullish, buyers ought to contemplate future vesting schedules which can suppress the worth as extra tokens are launched into the market.
