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Ethereum’s Merge date is days away and the countdown has many individuals questioning concerning the destiny of layer-2 scaling options.
You’ll have observed Ethereum-associated cryptocurrencies and tokens resembling MATIC are up considerably in the previous couple of weeks.
Nevertheless, the transfer to proof of stake will resolve among the scalability points related to Ethereum, thus the curiosity about the way forward for L2s.
Polygon is without doubt one of the layer-2 options whose future could be at stake as a result of Merge.
Nevertheless, that may most probably not be the case.
Right here’s why
Though one among Polygon’s advantages is the speedy transaction rely which is miles forward of the Ethereum mainnet. Even so, Polygon additionally offers considerably decrease charges.
Congestion and excessive ETH costs are the principle causes for costly mainnet charges.
ETH’s value has gone up forward of the Merge and can doubtless 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 resembling 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 enhance within the demand for MATIC. Thus, aiding its long-term value motion.
MATIC’s value 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 presently approaching the assist line.
Supply: TradingView
MATIC’s value motion was headed upwards in the direction of the top of final week.
Nevertheless, its value motion noticed a big pullback which kicked off on the finish of July.
That is in step with sudden and heavy outflows from the availability held by prime addresses.
Supply: Santiment
These outflows had been arguably attributable to panic promoting courtesy of the promoting strain 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 doubtless as a result of return of buyers who beforehand cashed out in anticipation of the promote strain 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 anticipate MATIC to proceed rallying forward of the merge.
Though MATIC presently seems to be bullish, buyers ought to contemplate future vesting schedules which can suppress the value as extra tokens are launched into the market.
