Polymarket Drives 6% of Polygon Transaction Fees, But MATIC Price Remains Unaffected

• Polymarket now accounts for 6% of transaction fees on the Polygon network
• However, MATIC’s price action remains relatively unaffected by its recent growth
• Blockworks’ recent analysis highlights Polymarket as a key driver behind these transaction fees

Explore the complexities and impact of rising transaction fees on the Polygon network driven by Polymarket, and understand why this surge isn’t yet reflected in MATIC’s price.

Polymarket’s Rising Influence on Polygon Network

The prediction platform Polymarket has emerged as a crucial component in driving transaction fees on the Polygon Proof of Stake (PoS) network. Blockworks data reveal that Polymarket now contributes to 6% of all transaction fees on Polygon. This increase is largely due to a spike in user engagement and transaction volumes, including a noteworthy $100 million in user bets from June.

Impact of Polymarket’s Growth on MATIC’s Performance

Despite Polymarket’s growth, MATIC, Polygon’s native token, has not experienced a corresponding increase. In fact, while Polymarket saw significant traction in June, MATIC’s value saw a 19% decline. This decline, however, parallels the overall downturn in the crypto market, indicating broader market influences. Interestingly, MATIC’s daily active addresses saw a noticeable uptick in July due to the European Central Bank’s tokenized asset trial on the network.

Current Market Activity and Future Projections for MATIC

In recent price action, MATIC faced significant resistance around the $0.5 mark. The Relative Strength Index (RSI) suggests weak buying pressure, while the Chaikin Money Flow (CMF) indicates insufficient capital inflows to sustain a rally above the 20-day Simple Moving Average (SMA). This current market behavior suggests potential for MATIC to drop to $0.49 unless the bull momentum driven by Bitcoin hitting $70k changes the market dynamics.

Conclusion

While Polymarket’s significant impact on the Polygon network’s transaction fees is clear, it hasn’t yet translated into price gains for MATIC. The token’s future performance might depend more on broader market conditions and significant Bitcoin movements rather than its utility within the Polygon ecosystem.

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