Polygon [MATIC]: Can gaming activity improve DeFi woes? Decoding…
- Gaming contributes immensely to Polygon’s activity.
- DeFi and DEX activity on the network declines.
Polygon [MATIC] has shown high activity on its network over the past few months. One reason for the same, as stated by Artemiz on 28 February, would be the increasing gaming interest on the network.
Gaming is the dominant category on Polygon today.
– 32% of fees spent
– 35% of active addy
– 23% of transactions pic.twitter.com/cL3FNsy1pR
— Artemis ➡️ ETH Denver ⛷ (@Artemis__xyz) February 28, 2023
Realistic or not, here’s MATIC’s market cap in BTC’s terms
Let the games begin
According to the data, gaming was responsible for 23% of all transactions made on the Polygon network. Additionally, gaming activity on Polygon contributed to 32% of all fees spent on the Polygon network.
Even though the interest from gamers in the Polygon network increased, there were other areas such as DeFi where Polygon was losing its dominance. As illustrated by Artemiz’s data, gaming activity surpassed DeFi activity on Polygon and started contributing more in terms of fees.
This decline in TVL could have been caused by the decreasing dApp activity on the Polygon network.
According to Dapp Radar’s data, popular dApps on Polygon, such as Balancer [BAL] witnessed a massive decline in activity. The overall number of unique active wallets on the network fell by 16.79% over the last week. Moreover, the volume on the dApp also decreased by 48.13% in that period.
Coupled with that, the overall volume of DEXes on the Polygon network was also impacted. According to Dune Analytics, DEX volume on the network fell from $241 million to $185 million over the last few days.
This impacted the TVL collected by Polygon, which fell from $1.23 billion to $1.16 billion in one week. The decline in TVL also affected the ability of the revenue collected by the network. Based on Token Terminals’ data, it was observed that the revenue generated by Polygon fell by 34.1% over the last week.
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MATIC gets impacted
Along with Polygon’s ecosystem, its native token MATIC faced challenges as well. Data from Santiment suggested that the daily activity of addresses exchanging MATIC fell. Additionally, MATIC’s network growth declined during the same period, suggesting that new addresses were not interested in buying the token during this period.
It remains to be seen whether Polygon can overcome its current challenges and leverage the attention its network is getting through gaming activity.