As cryptocurrencies continued to recover Tuesday from last weekendâ€™s massive sell-off, Ethereum scaling solution Polygon was among the biggest gainers.
MATIC, the native token of the Polygon blockchain, surged from $1.79 on Monday morning to $2.50 over the ensuing 24 hours, a nearly 40% gain. At the time of publication, the price had since dipped to $2.32.
The increase occurred as more users have become aware of Polygonâ€™s lower costs and greater efficiency and scalability. Speculation has also mounted over what the firm has called an â€œexciting announcement,â€ scheduled for Dec. 9 at Polygon virtual â€œzk day.â€
The event will center around the applications of zk-STARKs and zero-knowledge (ZK) proofs, a type of cryptography that can verify whether a given statement is true without revealing the data that proves it.
â€œI think investors are finally waking up to the fact that Polygon is essentially an index fund of Ethereum scaling solutions and the 800-lb gorilla in the [zero-knowledge] space,â€ Polygon Global Head of Institutional Capital Dean Thomas said.
âŒ›ï¸ 2 days to go…
ðŸ¤© 5.9K+ members have registered for #polygonzkday already!
âž¡ï¸ Book your slot now: https://t.co/nYLpkmKDIx https://t.co/QTMmcJ5Mpt
â€” Polygon | $MATIC – We’re hiring! (@0xPolygon) December 7, 2021
Polygon is a protocol and framework for building and connecting Ethereum-compatible blockchain networks, offering an ecosystem with lower transaction costs and faster speeds than Ethereum.
ZK-rollups are a technology that helps Ethereum scale without compromising the blockchainâ€™s decentralization and security.
Matter Labsâ€™ zkSync and StarkWareâ€™s StarkNet are both examples of ZK-based Ethereum scaling solutions. Both projects also closed $50 million funding rounds in November, with zkSyncâ€™s led by Andreessen Horowitz and StarkNetâ€™s led by Sequoia Capital.
This past August, Polygon merged with ZK protocol Hermez in a $250 million deal, introducing ZK rollup capabilities to Polygon for the first time. Polygon followed up in September with a partnership with audit giant Ernst & Young to build Polygon Nightfall, a privacy-focused ZK-rollup geared towards enterprise use.
â€œ[Polygonâ€™s] priority is to help scale Ethereum and ZK is the biggest bet to achieve it,â€ a spokesperson for Polygon told CoinDesk.
Over the past several weeks, Polygon has also attracted interest from venture capitalists and institutional investors as Ethereumâ€™s soaring gas fees have sent projects fleeing to cheaper blockchains.
In a newsletter sent to the community this morning, Polygon reported all-time high network revenue for November and reached over 300,000 active addresses.
What @0xPolygon projects are you following? ðŸ§ pic.twitter.com/qVkv9EJ83x
â€” Token Terminal (@tokenterminal) December 7, 2021
Polygon also saw record monthly volume of nearly $60 million on non-fungible token (NFT) marketplace OpenSea last month.
â€œWe are significantly undervalued by any metric be it daily active users, transaction volume, or number of dapps being built on our platform,â€ Thomas told CoinDesk.
Earlier this month, decentralized exchange IDEX launched its v3 on Polygon, aiming to combat high fees and failed transactions that have plagued users of Ethereumâ€™s Uniswap.
Projects related to NFTs or the metaverse are also moving over to Polygon due to high minting and transfer costs on Ethereum.
Oh man I found a game! You can pay 50 MANA ($150 USD) to jump into a volcano! Except, it’s temporarily closed because gas fees are too high, they’re waiting to launch on Polygon to reopen. Guess metaverse is also facing supply chain issues pic.twitter.com/S82tpc0zCz
â€” Anthony Lee Zhang (@AnthonyLeeZhang) December 5, 2021
Polygonâ€™s MATIC token is currently the 14th largest cryptocurrency with a market cap of $16.2 billion, according to data from CoinGecko.
MATIC is still trading below its all-time high price of $2.62 in May.