Despite a significant decline in MATIC’s market cap, Polygon’s network activity surged in Q2 2024, showcasing resilience amid a broader cryptocurrency downturn.
Polygon Maintains Robust Network Activity Amid Crypto Market Downturn
In a recent report by market intelligence platform Messari, Polygon, a prominent Layer 2 scaling solution for Ethereum, has demonstrated strong network activity despite the broader cryptocurrency market experiencing a downturn in the second quarter of 2024. Notably, Polygon’s native token, MATIC, saw a significant dip during this period.
Market Context and Polygon’s Performance
MATIC’s circulating market cap plummeted by 44.3%, settling at $5.5 billion, now positioning it as the 20th largest crypto asset, falling from its previous rank of 26th. This decline stands in contrast to Bitcoin and Ethereum, which experienced relatively smaller drops in market capitalization of 12% and 6%, respectively.
A key factor attributed to Polygon’s robust network performance during this period is the implementation of Ethereum Improvement Proposal (EIP) 4844 on Polygon’s mainnet in the first quarter of 2024. This pivotal upgrade introduced “blobs” to the network, significantly slashing the average transaction fee from $0.017 to $0.01—a reduction of 41.1%.
As a consequence, Polygon’s revenue from network transaction fees fell by 40.6% to $4 million in Q2 2024. However, this fall in revenue doesn’t suggest a decline in user activity. On the contrary, it reflects the reduced fees due to EIP-4844, with user metrics continuing to show remarkable growth.
On-Chain Metrics and Ecosystem Growth
According to the Messari report, average daily active addresses on Polygon surged to 1.2 million in the second quarter, reflecting a 47.6% increase quarter-over-quarter (QoQ). Additionally, average daily returning addresses rose by 50.5% to 1 million, and the number of new addresses added to the network per day increased by 31.7% to 167,800.
Transaction volume held firm, averaging 4.1 million daily transactions, just shy of its all-time high. This volume marks a 3.9% increase from the previous quarter. Polygon’s performance in comparison to other Layer 2 networks like Arbitrum and Base was particularly noteworthy, with these networks seeing average daily active addresses of 545,000 and 528,000, respectively.
The report highlighted that despite DeFi protocols on Polygon experiencing mixed results, with notable decreases in Total Value Locked (TVL)—Aave, Uniswap, SushiSwap, and Quickswap all saw declines—Polygon’s own TVL denominated in MATIC actually rose by 38.1% to 1.8 billion tokens.
Polygon’s non-fungible token (NFT) market also showed resilience. The average daily NFT volume dipped slightly by 5.7% to $1.8 million; however, daily NFT sales increased by 1.8% to 52,000.
At the time of writing, MATIC had recovered slightly, experiencing a 5% increase in trading price to $0.512 after hitting a two-year low of $0.428 on July 5th. Additionally, trading volume decreased by 30%, amounting to $197 million, as per CoinGecko data. These figures represent an 82% difference from MATIC’s all-time high of $2.91 set during the 2021 bull run.
North-East Housing Market Shows Gradual Recovery
New data from the Aberdeen Solicitors Property Centre (ASPC) suggests that the north-east housing market is undergoing a gradual recovery, with property prices in Aberdeen showing upward trends in 2024.
Price Increase in Aberdeen
In the second quarter of 2024, property prices in Aberdeen rose by 3.1% compared to the first quarter of the year. The average sale price of detached homes in Aberdeen climbed almost £10,000 in just three months to reach £325,534. These figures mark the first time since 2022 that property prices have increased across quarterly, yearly, and five-year comparisons.
The price of a standard flat in Aberdeen noted an increment from £122,235 to £123,761 between the first and second quarters of 2024, while semi-detached properties rose from £185,072 to £190,792.
Transaction Volume and Broader Market Sentiment
The second quarter of 2024 saw a significant uptick in transactions, with 1,383 properties sold through ASPC, translating to a 44.1% increase from Q1. ASPC chairman John MacRae attributed this activity to potential external factors such as a new government, easing inflation rates, and a distant prospect of lower interest rates fostering a sense of renewed optimism.
Mr. MacRae remained cautiously optimistic: “We need to be cautious, as the second quarter of the year is, normally, the most active.”
Performance in Surrounding Areas
The housing market in areas surrounding Aberdeen also showed signs of improvement. In Inverurie, the average price of a detached home rose from £314,994 to £322,178, and prices for semi-detached properties climbed from £176,764 to £184,287. Stonehaven saw detached property prices increase from £319,063 to £330,931, while Ellon exhibited similar trends with detached home prices rising from £261,607 to £274,215.
Properties in rural areas also displayed positive trends, with the average price for flats moving from £112,898 to £115,064, semi-detached homes from £180,872 to £186,793, and detached houses from £341,214 to £356,901.
Mr. MacRae remains hopeful for the market’s continued recovery: “While not expecting activity to match the level of the second quarter, we will have further proof of a market in recovery if the second half is correspondingly encouraging.”
These insights indicate stability and positive activity in both the cryptocurrency and real estate markets, despite facing different external challenges. Each sector shows resilience and potential for future growth.
