And recent growth in the network's TVL and DApp data has not occurred.
With a rise of an amazing 83 percent in just 30 days, Polygon (MATIC) had a great July. The layer-2 scaling smart contract platform aspires to be a key component of the Web 3 infrastructure. Investors doubt the sustainability of the recovery, meanwhile, given the weak deposits and data on active addresses.
After being chosen for the Walt Disney Company's accelerator programme to develop augmented reality, nonfungible token (NFT), and artificial intelligence solutions, Polygon, according to CoinGabbar, surged.
A zero-knowledge Ethereum Virtual Machine (zkEVM), which aggregates several transactions before sending them to the Ethereum (ETH) network, will be implemented, Polygon said on July 20. This idea, according to Polygon co-founder Mihailo Bjelic in a recent interview with Cointelegraph, will reduce Ethereum fees by 90% and increase throughput to 40–50 transactions per second.
The rise in the number of platforms offering liquid staking for MATIC tokens, which allowed holders to get more incentives, was another factor in Polygon's price increase. According to DeFi Pulse, some examples are Lido Finance, Balancer, Meshswap, and Ankr Staking.
Polygon still ranks among the top 12 tokens by capitalization rank despite being currently 69 percent below its all-time high. Additionally, the network has deposits locked on smart contracts totaling $1.72 billion, or total value locked, or TVL.
The decentralised apps (DApps) hosted by Polygon's Ethereum-compatible scalability range from decentralised exchanges (DEXs), collateralized loan services, yield aggregators, NFT marketplaces, and games.
Deposits for Polygon smart contracts fell by 42%
Despite a 30 day increase of 83 percent in Polygon, the network's TVL as measured in MATIC tokens fell by 42 percent during that time. Comparatively, Klaytn (KLAY) climbed by 11% in 30 days whereas Fantom (FTM) scaling solution decreased by 14%.
The year-to-date TVL for Polygon is currently $1.42 billion, which is a 67 percent decrease. However, according to DeFi Llama data, such a sum is not far from Solana's (SOL) $2.08 billion or Avalanche's (AVAX) $2.52 billion.
Analyzing DApp usage stats will show whether Polygon's TVL drop is due to waning uptake. However, since some DApps, such games and NFT markets, do not need sizable deposits, the TVL statistic is meaningless in those circumstances.
According to DappRadar, on average, on August 1 compared to the previous month, there were 19% fewer Polygon network addresses connecting with decentralised applications.
According to the aforementioned data, Polygon appears to have lost part of its market share for scaling solutions. The project's recently revealed zero-knowledge has not yet been put into practise, but its advantages might push MATIC past $1.