- Polygon introduced zkEVM amid initial criticism
- Despite setbacks, MATIC may be in for a potential uptrend
Polygon has emerged as a prominent player, particularly as a top layer-2 (L2) scaling solution for Ethereum. Through its advanced technology and dedication to enhancing Ethereum’s scalability, Polygon provides various solutions such as sidechains, zk-rollups, and optimistic roll-ups. This underscores Polygon’s capability to tackle Ethereum’s scalability issues and facilitate wider acceptance of dApps and DeFi.
However, on 22 March, Polygon’s zkEVM witnessed a network outage caused by a reorganization (reorg) on the underlying Layer-1 (L1) Ethereum network. The reorg caused network discrepancies, leading to transaction errors and invalid nonce returns. Additionally, emergency measures were needed for resolution, emphasizing the necessity of robust security mechanisms.
Addressing the aforementioned episode, Brendan Farme, co-founder of Polygon, in a recent edition of the Unchained podcast claimed,
“There were decisions that were made in the Polygon ZKM rollup, specifically around the client and using a custom client that has led to technical debt that we’re currently addressing.”
A question of resilience
Here, it’s worth noting that MATIC depreciated by 4.30% in the last 24 hours alone. However, recent updates would suggest that it’s ready for a potential uptrend on the charts. In fact, according to some analysts, MATIC recently broke out of a symmetrical triangle pattern – A sign of bullish sentiment.
Echoing similar sentiments, @Defiwayapp noted,
“Meet the new top of the most bridged blockchains for 9th of April by #defiway – 1) #Polygon 18%…”
Additionally, an X user @three2four7 also added,
“On Chain, TVL may not be the perfect indicator but it does seem like L2 are dominating the chart now. #ARB #BLAST #BASE #MATIC #OP. Last Bullrun #MATIC went parabolic with 10000% up. Which L2 will do this bull run?”
This is a sign that despite the recent bearish trend over the last 2-3 weeks, MATIC has consistently looked north since October 2023. Additionally, despite short-term setbacks, Polygon remains optimistic about the future of its ZKM roll-up, anticipating sustained development and maturity over longer timeframes.
Remarking on the same, Farme added,
“This is like a move that I think Arbitrum and Optimism both went through..and we’re sort of mirroring that process. But I’m optimistic and I feel really positive about the long-term health of the ZKM rollup.”
Market trends and the roadmap ahead
Finally, AMBCrypto’s analysis indicated that MATIC’s Market Value to Realized Value (MVRV) ratio had a reading of -6.54% – A sign of potential loss if tokens are sold immediately. However, historical patterns suggest that negative MVRV ratios have preceded notable price surges. What this implies is that there may be a possible accumulation opportunity before the next rally.
As far as the short-term roadmap is concerned, Farme noted,
“I think in the short-term upgrading, the proving tech, moving to EIP-4844, I think that we will see between a 10 and 20x reduction in proving cost as we move away from the existing proving tech and so I think that’s something that’s really exciting.”
Polygon Labs CEO Marc Boiro went on to add,
“I think that bringing Polygon POS to the EigenLayer is going to be very important for other chains in the EigenLayer.”
This indicates a step towards addressing the inefficiencies in L2 ecosystems, such as the need for extensive token games and liquidity bootstrapping. Ergo, by joining EigenLayer, Polygon aims to simplify liquidity access for developers, allowing them to focus more on product development. All in all, this shift is expected to reduce inefficiencies and speculative activities, resulting in the growth of more significant projects.
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