Polygon plays an important role in solving the scalability issues of blockchain technology. As researched from BeInCrypto, this Layer 2 scaling solution has lost 53% of its TVL since the beginning of 2022. The $5.44 billion of Polygon TVL on January 1 has tumbled to $2.55 billion on May 29.
Polygon is a decentralized Ethereum scaling platform that enables developers to build scalable user-friendly dApps with low transaction fees without ever sacrificing security. The platform has found a solution to the blockchain trio (scalability, security, and decentralization) and uses scaling solutions (Pos, Hermez, Avail, Edge, Nightfall, Miden, and Zero) to improve the performance of several Ethereum dApps.
Besides being a “big player” in DeFi, Polygon is also one of the largest NFT blockchains in trading volume.
What makes Polygon TVL plunge?
Polygon’s TVL is down due to the dropping of the dApps TVL in its ecosystem.
The open-source liquidity protocol, Aave, lost more than 41% last month. The Stablecoin exchange, Curve, dropped above 30% of its TVL in the same period. Decentralized exchanges, Quickswap and SushiSwap, have been locked for 41% and 44% of their total value, respectively.
Other dApps that have made a significant contribution to TVL’s collapse include Uniswap, Meshswap, Stargate, QiDao, Beefy Finance, Balancer, Klima DAO, and Arrakis Finance.
However, after losing over $2 billion in TVL, Polygon is still ahead of other ecosystems such as Cronos, Fantom, Near, Waves, Bitcoin, EOS, Cardano, Algorand, and Terra.
On May 27, Tether announced that their stablecoin, USDT, is now available on the Polygon blockchain. With over 19,000 dApps running on Polygon, users will be able to use USDT to transfer money in its large ecosystem and make profits. In addition to Polygon, USDT is also popular on TRON and Ethereum.
Polygon price volatility
Polygon (MATIC) kicked off 2022 with $2.53, then hit a 52-week low of $0.5084 on May 12, and is currently trading around $0.6285 at the time of this writing. Overall, this means MATIC’s price has lost 75% of its value since the start of the year.
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