Key details:
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Polygon turned all the trend throughout the “DeFi Spring” of 2021 after which misplaced momentum.
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With this rebranding, the Polygon group seeks to “resurrect” the token.
The Polygon community’s native token, MATIC, will likely be rebranded to POL tomorrow, September 4, marking a milestone within the evolution of the ecosystem. This ‘re-branding’ This happens in a context the place Polygon, which shone throughout the “DeFi spring” of 2021, has misplaced a lot of its market momentum.
Two weeks in the past, the token value climbed to $0.53. Nonetheless, This value was not capable of maintain and has now fallen to $0.40..
This decline isn’t a surprise, since, from 2022, MATIC has proven poor efficiency available in the market.
After hitting its all-time excessive of $2.92 in 2022, its value started to fall, dealing with stable resistance on the $1 mark, a stage it has solely surpassed thrice since then, because the TradingView chart exhibits.
Market psychology, defined in CriptoNoticias’ Cryptopedia, signifies that these historic resistances, corresponding to $1 within the case of MATIC, are shaped when a monetary asset has recurring difficulties in overcoming a selected value.
This phenomenon, coupled with low exercise on the Polygon community, has influenced the weak spot of MATIC’s value.
Polygon community exercise is declining
The symptoms on-chain Additionally they replicate a discouraging outlook for the Polygon community.In accordance with analytics website Artemis, the variety of every day energetic addresses on the community peaked in June 2023 at 1.6 million, however has since fallen sharply to the present 633 thousand energetic addresses.
Equally, every day transactions have declined, from a excessive of 16 million in November 2023 to simply 2.9 million at presentas seen within the following graph.
The entire worth locked (TVL) on the community additionally noticed a major drop, from $5.3 billion to $885 million over the previous three years.
Confronted with this situation, Polygon Labs, the corporate issuing the token, determined to exchange MATIC with POLdescribing this transformation as “a completely community-driven replace,” as reported by CriptoNoticias.
POL is designed to be the next-generation native token within the Polygon ecosystem, offering governance rights and enhancing community scalability.
This can enable a decentralized group of PoS (Proof of Stake) validators to offer safety, resilience, and neutrality to each community throughout the Polygon ecosystem.
Moreover, MATIC customers won’t must do something to have their tokens upgraded to POL, as the change will likely be made routinely.
The MATIC group doesn’t count on any will increase within the asset value
Regardless of these enhancements, the MATIC group doesn’t anticipate a major enhance within the asset’s value. Customers of the token have expressed their reservations about the way forward for POL on the social community Reddit.
Some, like robertsa901, identified that, If a powerful reversal doesn’t happen now, the worth may fall even additional.“MATIC was my #1 coin, however even now I’ve doubts and offered all of mine,” he commented.
“I purchased 5,500 MATIC in 2020 and 2021, which allowed me to make a pleasant revenue. Possibly that was its solely bull run. I can’t see it going up like that once more.”
One other person, Tall_Run_2814, stated that Polygon not has the identical person and market exercise as in 2021one thing talked about beforehand on this article. Nonetheless, he nonetheless believes that it’s a “nice undertaking.”
Moreover, some customers, corresponding to Materials-Emotion1245, have identified that the Polygon Basis has been promoting its property, which could possibly be affecting the token value.
“The Polygon Basis has a big portion of its property as an establishment, so in the event that they wished to, they may most likely enhance the worth quite a bit. They won’t need the worth to be excessive to maintain prices down,” he stated.
Updates don’t assure a value enhance
Lastly, you will need to spotlight that Title or picture updates don’t at all times assure a value enhance of a digital asset.
The dealer who identifies himself as Daan Crypto on social community X talked about that, in 2017, these methods may enhance the worth of a coin by as much as 100%. Nonetheless, The market has developed and at present the success of a undertaking is dependent upon extra advanced elements..
A current instance is the Cardano (ADA) cryptocurrency, which activated the Chang hardfork. This improve decentralizes the governance of the community, beforehand managed by IOHK, the corporate based by Charles Hoskinson.
Nonetheless, the market didn’t react as anticipated and the worth of ADA remained at $0.32. Up to now in 2024, the cryptocurrency has registered an increase of 28%, however it’s nonetheless 89% beneath its historic most.
Whereas the change from MATIC to POL represents a brand new stage for Polygon, the way forward for POL’s value will rely upon a number of elements, together with the market’s response to those modifications and the community’s potential to regain the exercise it as soon as had.