- Polymarket now accounts for 6% of transaction fees on the Polygon network
- However, MATIC’s price action is still unaffected by its recent growth.
Prediction platform Polymarket is now one of the main drivers of Polygons Proof of Stake (POS) network transaction fees. According to recent data from Blockworks, the prediction site now accounts for 6% of transaction fees on the Ethereum L2 Polygon network.
“The app is now responsible for 6% of total transaction fees on Polygon PoS.”
Source: Blockworks
In fact, Blockworks on-chain analyst Dan Smith claimed that the increase in transaction fees follows a recent surge in users and translation volumes on Polymarket. The platform hit a record $100 million in June, thanks to larger bets on the U.S. election.
Interestingly, the prediction site beat mainstream media to the punch when it predicted that Joe Biden would drop out of the presidential race. Its real-time odds feature has made it a darling of speculators in sports, politics, and everything in between.
However, the big question is: can MATIC benefit from this traction?
Will Polymarket’s success help MATIC?
According to the venture capitalist Evan LutherThe prediction category is still relevant, unlike other sectors of the cryptocurrency market.
“While other rhetoric has cooled, prediction markets are in full swing. Total value locked across major platforms is up nearly 70% so far in 2024, including over 40% for PolyMarket.”
However, despite Polymarket’s strong performance in June, MATIC lost 19% of its value in the rankings. This decline is not unique to MATIC, however, especially since the market as a whole has also suffered declines.
On the network front, MATIC saw an increase in the number of daily active addresses in July compared to June. The July increase, which occurred on the 19th, coincided with the Trial test for assets tokenized on the network by the ECB (European Central Bank).
Source: Santiment
In short, MATIC network effects have increased thanks to speculation on tokenized assets, compared to Polymarket’s record trading volume in June.
At press time, there appeared to be a further increase in daily users, perhaps to capitalize on the recent relief rally, as Bitcoin [BTC] retested at $67,000.
In other words, Polymarket’s traction might help boost Polygon’s network revenue, but it has little impact on MATIC prices.
Source: MATIC/USDT, TradingView
On the price chart, the recent bounce met resistance at $0.5. The weak buying pressure, as shown by the below-average RSI (Relative Strength Index) reading, meant that $0.51 was a crucial hurdle.
The weak CMF (Chaikin Money Flow), indicating weak capital inflows, further reinforced the fact that breaking above the 20-day Simple Moving Average (SMA) could be a problem on the 4-hour chart.
Thus, a slowdown in the relief bounce at the hedge could drag MATIC to $0.49.
However, should bulls break through the hurdle amid Bitcoin-backed bullish momentum? [BTC] Upon reaching $70,000, MATIC could then see a further 8% recovery to $0.56.