Assessing Polygon zkEVM as it attempts a recovery

• Polygon zkEVM’s network activity declined last month, along with its TVL. 
• Meanwhile, MATIC’s price gained bullish momentum as it surged by 13%.

Polygon [MATIC] zkEVM’s performance has been on the decline over the last few weeks. However, the L2 does have a new trick up its sleeve, which can help turn the situation around in zkEVM’s favor. In the meantime, Polygon’s native token, MATIC, registered a double-digit price growth.

A look at Polygon zkEVM’s future plan

AMBCrypto’s look at Artemis’ data revealed that the rollup’s Total Value Locked (TVL) dropped sharply last month. This meant that the rollup’s DeFi performance was not up to par.

Source: Artemis

Apart from TVL, zkEVM’s fees and revenue also sank during the same time period. The rollup’s network activity remained low last month. This seemed to be the case as its daily active addresses dipped. The rollup’s daily number of transactions also fell during the same period.

Source: Artemis

Nonetheless, zkEVM has an event planned for February 2024, which can help it grow in the DeFi space.

Polygon recently posted a tweet mentioning that DeFi projects were coming to Polygon zkEVM in partnership with Layer 3. The event will have a prize pool of $50,000. This might lure new projects and users onboard and, in turn, lift zkEVM’s metrics.

The DeFi projects are coming to Polygon zkEVM 👀

Get a taste on Feb 1st with @layer3xyz and the ecosystem projects bringing the heat. pic.twitter.com/jLQQ2gl12l

— Polygon DeFi | zkEVM Mainnet Beta (@0xPolygonDeFi) January 29, 2024

Apart from that, AMBCrypto reported a few weeks ago that zkEVM had entered its second phase of development.

The rollup’s second stage is dedicated to fostering the growth of decentralized applications (dApps) on the network, which might help the rollup grow in the months to come.

zkEVM is still way behind its competitors 

Though these projects and development activity boasted future growth, at press time, zkEVM was well behind its top competitors like zkSync Era and Base on multiple fronts.

AMBCypro’s analysis of Artemis’ data revealed that both its active addresses and daily transactions were substantially lower than the rest. Things only looked in zkEVM’s favor in terms of revenue, as charts for all three rollups were closely knit.

Source: Artemis

MATIC investors are rejoicing

Amidst all this, MATIC’s price gained bullish momentum as its value shot up by more than 13% in the last seven days alone. At the time of writing, MATIC was trading at $0.8248 with a market capitalization of over $7.9 billion. 

Read Polygon’s [MATIC] Price Prediction 2024-25

Thanks to the price uptick, positive sentiment around the token remained high last week, which was evident from the spike in its weighted sentiment.

Its social volume was also up last week, meaning that Polygon remained a popular topic of discussion in the crypto community.

Source: Santiment