Coin Bureau, a crypto analyst, also known as Guy, released a detailed report on Polygon’s updates and progress in the blockchain industry. According to him, MATIC’s circulating supply could sabotage Polygon’s future due to the selling pressure.
MATIC has been on the rise in the crypto world for many years. Its success comes from Polygon’s various purchases and projects in the past four months to further its scaling solution technology.
It acquired Mir; a crypto startup, launched ZK scaling solution called TestNet, partnered with a VC firm, and signed a deal with Opera to enable their users to interact with dapps. More massive events resulted in MATIC thriving in the crypto market.
This rise was cut short when Polygon revealed they found a bug in MATIC that risked their position in the market.
From then on, Polygon went through many ups and downs by taking on new projects and doing partnerships with various NFT companies and decentralized websites, including its attempt to launch a decentralized social media platform on Web3.
“Despite various Polygon’s developments, updates, and announcements, MATIC’s price hasn’t gone up since when I last covered the project in early December. MATIC’s percentage remains the same since last year.”
The Coin Bureau explained that the reason for MATIC’s status in the market is due to its supply. “Historical data from CoinMarketCap suggests that MATIC’s circulating supply has increased by around 600 million over the last four months.”
However, this supply is decreasing day by day over the last four months. The main sell pressure for the early token holders is coming from Polygon’s foundation. A huge chunk of MATIC’s treasury has been vested in this foundation. Thus, sabotaging Polygon’s position in the market.
Guy says, “…the number of new wallet addresses on Polygon’s PoS chain seems to have plateaued.” MATIC’S demand in the market is declining, and so are the daily transactions in Polygon’s PoS chain.
“…It’s alarming to see the Polygon foundation selling off its MATIC against this backdrop. With another vesting cliff coming up, we could see some more price suppression for MATIC.”
Guy concluded by saying that there is a potential for MATIC’s decline in the upcoming years unless Polygon comes up with new strategies to approach their concerns and face the market competition in terms of scaling solutions.
Currently, MATIC is $1.67 in the crypto market, as of 4th April 2022.