POLYGON

Polygon is trying to making an attempt a chain of chains bigger than ever and in doing so digesting many ideas at a same time which includes imitating parachains from polkadot using Polygon subnets(AVAX), using It’s own ZK CDK for launching Appchains just like Optimism Superchain narrative, using Polygon ID for interconnecting all the chains and someone said that Polygon don’t have a good bridge, so now they are making their own L2 called Miden which is second L2 after Eclipse to bring Parallel VM to ETH

Defi

DEfi yield dead

In Defi most projects are dead/stagnant as not much yield is being produced compared to other chains, just averaging at 7-10% wrt to 30-40% on other chains

Most of the liquidity flowed is in Top LP’s(Uniswap,Quickswap,Instadapp), bridges and staking that also through Polygon itself

USDT and USDC are on par in distribution and not natively minted as compared to base wher USDC is printed natively

Some good projects are there like Gamma which gives the highest yield on Polygon with decent size and other project is Polymarkets

There is not a single good perp DEX on Polygon, it is very strange

Without Pendle, Athena, Gearbox and a good perp DEX, the DeFi is most probably gonna be dry

And no good RWA projects onchain and no other new Defi instruments

Validators

Validator are limited upto 100 only and the top 4 Validators own more than 33% stake(Nakamoto Coefficient), so it’s not good and one of them is Binance Labs and lots of money is submitted to DEX from Polygon Contracts

Active address

Daily Address increase after Dec 2023, due Account Abstraction wallet increase after partenership with Bybit, Galxe uses it as native chain

The number of transactions increases may be due to new protocol launches for new incentive testnets etc.(Supernets -- zkEVM -- Miden -- ID)

After Blobs - other L2’s got on par with the Polygon in fee and speed and base is the clear winner matching Polygon’s transaction count and active wallets

Internal Money Flow

All the money is distributed in LPs, bridge, staking but no increase in defi TVL and no much Bridged money either apart from minting of USDT, USDC, MATIC tokens on ETH and bridging  them over

I came across a wallet of Polygon team named Polygon Foundation Wallet(0xb316fa9Fa91700D7084D377bfdC81Eb9F232f5Ff) which was established to acquire ZK companies and funding startups in the same space of around 4b MATIC tokens but only 400m of it was transferred to the other founder’s wallet.

At start the wallet seemed to send MATIC tokens to founders only but sortly after it started to send majority of it’s fund to CEX, market makers(Wintermute) and staking back in Polygon, and that’s the case of the MATIC held by the Polygon team but they are back with POL with infinite Supply!!

Integrated Future

Polygon is trying to become a superchain itself and has done various partnerships with different protocols such as Aptos,IMX etc. which are given below

• Lens - alternate to Farcaster maybe but good enough(now moved to zkSync sed)

• Superchain Narrative - IMX, Astar, Canto, Flipkart all are building their appchains on top of Polygon man chain

• zkWasm - Polygon is also gonna provide native support to other Data Availibility layers such NEAR DA, Celestia through it’s zkWASM SDK but no need as it is cheaper alone

• APTOS - STM Engine - Parallelization of Polygon main chain happened by borrowing the VM from Aptos

NFT And Gaming

Majority of the Polygon transaction for the past year was due different games and NFT drops done by various partnerships but none lived up and the spce is quite stagnant at the moment

Polygon wooing the retail category through games and NFts but short-lived hype only and the base has Coinbase the retail facing frontend and secretly making the narrative of Superchain through ‘’ Farcaster will be the front-end of the superchain”  cause everything will move through farcaster first without doing any other using onchain dapp or protocol. It would help together so great that any service, app can be made upon it and will be accessed by farcaster once it becomes damn fast and less outages.

Tokenomics

Full Supply of MATIC is in circulation(10b) and most of the staked supply(33%) is staked by the Polygon foundation and majority of tokens are held in different LP Pools

But the new token POL removes the supply cap from 10b, already around 4-5b of new tokens are minted and the supply cap has reached 15b tokens, this is not good maybe.

Some of the newly minted POL is bridged into new ZkEVM chain

Community focus

It is trying to imitate many things at once and trying to attract new devs, new partnerships but most of them didn’t come organically

And the community on Twitter and other social platform is not good apart from their hold in Indian Dev Community

PartnershipsParternships

Franklin Templeton - FOBXX - it quite a big partnership

With many governments and will be the number 1 contender in bridging all India’s infra onchain including Identity(AADHAR), payment(CBDC) etc.

Summary

Matic is trying to woo all the narratives at once and they can only work id they gel together so well that it doesn’t take more than 1 transaction to jump between subnets, chains, etc. and to do that Polygon is doing partnerships all across the space but not much liquidity is flowing in the chain, so they decided to make a new token POL which removes the upper limit of MATIC and can be used to hold the diminishing Ecospace.