Polygon (MATIC) has seen a substantial surge in its price on July 13, driven by several significant factors. These factors include a recent court ruling in favor of XRP, increasing activity of decentralized applications (Dapps) on the Polygon Network, and the highly anticipated launch of Polygon 2.0. Within just 12 hours, MATIC experienced an impressive 24% rally, pushing its price to $0.89, its highest level in five weeks. Although the initial excitement subsided, the token managed to maintain a daily gain of 15%, indicating a growing demand from traders and investors.
The United States District Court for the Southern District of New York ruled on July 13 that XRP is not a security. This court decision could have significant implications for other alternative cryptocurrencies, especially after MATIC was specifically classified as a security by the U.S. Securities and Exchange Commission (SEC) during its legal battle against Coinbase on June 6. The SEC’s classification led to a 37% drop in MATIC’s price over the next five days, reaching its lowest point in 11 months on June 10.
The court ruling stated that XRP holders do not have a reasonable expectation of earning profits from the efforts of others. This outcome is seen as a positive development for the entire cryptocurrency industry. Apart from its immediate impact on MATIC due to its initial coin offering (ICO) in 2019, the court decision also affects Ethereum, which serves as the infrastructure for the Polygon network. Ethereum faced a similar risk of being considered a security, particularly during its ICO phase.
The activity of Dapps on the Polygon Network has also experienced significant growth in recent weeks. This growth is promising for MATIC as it suggests that the network is becoming a preferred scalability solution for the Ethereum network. According to data from DappRadar, the number of active Dapps on Polygon has increased by 47% in the past 30 days. These Dapps span various sectors, including interoperability, NFT platforms, Web3, DEX exchanges, and games.
On July 13, the Polygon development team proposed a token upgrade that would allow holders to validate multiple chains. This proposal is awaiting community approval and, if successful, will result in a rebranding from MATIC to POL. The Polygon 2.0 upgrade aims to support multiple chains without compromising security and introduce incentive streams for validators, including zero-knowledge proof generation. Once launched, this upgrade has the potential to further drive up the price of MATIC.
With a total value locked (TVL) of $1 billion on the Polygon Network, this second-layer scaling solution has found its niche among users of decentralized applications. Importantly, the TVL has grown from $878 million in the previous month, indicating a growing demand for the network’s processing capabilities. While it may be too early to predict the timing and impact of the proposed Polygon 2.0 upgrade, other competing solutions like Arbirtrum (ARB) and Optimism (OP) are also experiencing growth. Privacy implementations utilizing zero-knowledge proofs may also gain significant market share due to their unique features not currently matched by the Polygon Network.
In summary, there are no apparent barriers preventing MATIC from reclaiming the $0.90 support level observed before the SEC’s action against Coinbase on June 6. However, investors are likely to wait for further confirmation of developments before expecting a more consistent bullish momentum for MATIC.