Polygon (MATIC) is currently on the rise despite the broader crypto market moving sideways. Its price has rallied over 15% in the last 24 hours to trade at $2.20 extending its weekly gain to more than 20%.
However, this price rally comes against the backdrop of diverse factors. Let’s see what the hike is all about.
What is Polygon (MATIC)?
Before delving into what is causing the current MATIC bullish rally, let’s first take a look at what Polygon (MATIC) is.
In a nutshell, Polygon (MATIC) is an Ethereum token that powers the polygon Network, in other words, it’s a scaling solution for Ethereum.
Polygon aims to provide faster and cheaper transactions on Ethereum using layer 2 sidechains that run alongside the Ethereum main chain. Polygon users can deposit Ethereum tokens to its smart contract, interact with these tokens and later withdraw them back to the Ethereum main chain.
The MATIC token is used to pay transaction fees and participate in proof-of-stake consensus.
Why is the MATIC price rising?
The most recent announcements that are contributing to the current include the recent announcement by 21Shares to launch Polygon ETP and the announcement by IDEX decentralized exchange to launch a Hybrid Liquidity DEX on Polygon.
Besides the two, Polygon also announced that it will be hosting ZK Summit next week on December 9. The summit will focus on ZK cryptography as one of the most promising solutions for Ethereum. There will also be live demos of the technology during the summit.
21Shares Polygon ETP
On Wednesday, December 1, 21Shares announced that it will be launching Polygon ETP on Euronext exchanges in Paris and Amsterdam.
Currently, 21Shares boasts of twenty crypto ETPs and will also be tracking the performance of Polygon’s native cryptocurrency MATIC.
Earlier this year, 21Shares had also an announcement on crypto ETPs that will track the performance of Ethereum-killer Solana (SOL).
To launch polygon (MATIC) ETP, 21Shares partnered with U.K-based infrastructure provider Copper to offer custodial and staking requirements.
IDEX’s Hybrid Liquidity DEX on Polygon
IDEX, a San Francisco-based decentralized exchange, will be launching a new V3 Hybrid Liquidity DEX on Polygon. This hybrid model will merge the traditional order book functionality along with other automated market makers’ (AMM) liquidity pools.
The merging will help introduce typical investing tools and higher financial returns for liquidity providers. However, the main reason for IDEX to choose Polygon is its lower transaction cost which is typically tens to hundreds of thousands times cheaper than Layer 1 Ethereum blockchain.
In the announcement, IDEX CEO Alex Wearn said:
“DeFi has been hamstrung by issues like gas prices, front-running and slippage since its inception, yet few solutions have truly offered answers to these problems. The novel Hybrid Liquidity design protects users from these pain points, while simultaneously generating higher returns for liquidity providers to boost the scalability of the wider decentralized economy.”