dailyhodl.com
A closely followed crypto analyst says that the layer-2 scaling solution Polygon (MATIC) is poised to rally as Ethereum (ETH) shifts to proof-of-stake.
In a new video, pseudonymous Coin Bureau host Guy tells his 2 million YouTube subscribers that the much-anticipated Ethereum upgrade will spur demand for blockchain scaling platforms like Polygon.
“As Ethereum’s transition to proof-of-stake approaches, many have wondered whether there will be a need for layer- 2 scaling solutions like Polygon. It looks like the merge will have minimal effect on Ethereum’s scalability.
It’s also likely to increase the demand for Ethereum which will make it even harder to use. This means layer-2s might soon be needed more than ever and Polygon is perfectly positioned to profit.”
The analyst says MATIC’s price has not increased much despite its developments, updates and partnerships because of supply issues.
“MATIC hasn’t gone up much in percentage terms over the last year though it is in an uptrend. This means something is suppressing MATIC’s price and the answer seems to be supply.
Historical data from CoinMarketCap suggests that MATIC’s circulating supply has increased by around 600 million over the last four months. Coingecko’s historical data suggests MATIC’s circulating supply hasn’t changed at all, but this is very unlikely given MATIC’s vesting schedule.
As it so happens, the vesting contract for the Polygon Foundation released 600 million MATIC during the same period… The fact that the MATIC balances of the other vesting contracts have barely changed or even stayed the same suggests that most of the sell pressure is coming from the Polygon foundation.
Speculation that the Polygon foundation selling is suppressing MATIC’s price recently made the crypto headlines and it makes sense if you do the maths.”
Guy says that Polygon is lagging behind similar platforms such as Avalanche (AVAX) in terms of wallet and transaction growth, but future developments will influence MATIC’s upside potential.
“MATIC seems to be on the decline. As you can see, the number of new wallet addresses on Polygon’s POS chain seems to have plateaued. What’s worse is the number of daily transactions on Polygons…
This paints a pretty grim picture for MATIC’s price potential but this ultimately depends on the demand that can be created by the upcoming milestones on the Polygon roadmap.”