Polygon DeFi Gas Usage Surges, While Transactions Decline
Recently, Polygon (MATIC) has seen a surge in a crucial metric indicating increased usage of its network. Artemis noted that gas usage on Polygon spiked over the last week. Thanks to this, the network was able to generate more fees and revenue, as evident from Token Terminal’s data.
A Closer Look at Polygon’s DeFi Space
Further investigation by Artemis found that most of the gas usage was coming from DeFi applications. As per the chart, XEN was the main player that catered to the increase in Polygon’s gas usage, followed by others like Matcha, Aave [AAVE], Balancer [BAL], etc. However, despite the increased gas usage, it was not reflected in the network’s value. According to Artemis, Polygon’s TVL has been losing momentum since April 19th and, at press time, stood at just over $1 billion. Dune’s data revealed another concerning metric; a similar declining trend was also noted in the number of transactions on Polygon’s DeFi ecosystem.
This Can Be Helpful
Polygon had another interesting update that could help increase transactions over the coming days. Phantom, a crypto wallet built for DeFi and NFT, announced its launch on multiple chains, including Polygon. The launch will allow users to access Polygon NFTs and connect to dApps automatically. The wallet also provides multiple features such as transaction previews, automated blocklists, etc.
MATIC Continues to Suffer
MATIC’s suffering does not seem to end anytime soon as its price has again fallen victim to a correction. According to CoinMarketCap, MATIC’s price declined by over 2% in the last 24 hours. At press time, it was trading at $0.9586 with a market capitalization of over $8.8 billion. A look at MATIC’s on-chain metrics gives us an idea of what went wrong. CryptoQuant’s data revealed that MATIC’s exchange reserve was increasing, suggesting higher selling pressure. MATIC’s supply on exchanges also shot up on May 1st, indicating that investors were selling the asset. The token’s demand in the futures market fell, as evident from its Binance funding rate.
What to Expect from Polygon
MATIC investors can expect more days of price drops as market indicators remain in favor of bears. For example, the Exponential Moving Average (EMA) Ribbon displayed that the bears were leading the market, as the 55-day EMA was well above the 20-day EMA. MATIC’s Chaikin Money Flow (CMF) registered a downtick, which was a development in the sellers’ favor. Additionally, the Money Flow Index (MFI) was also moving downward, further increasing the chances of a continued downtrend.
Polygon’s DeFi gas usage has seen a surge over the last week, but the number of transactions declined, and market indicators remain bearish for MATIC. However, the launch of Phantom on multiple chains, including Polygon, can help increase transactions in the coming days.