- Polygon price has bounced back modestly in the past few days.
- There are concerns about Polygon and other layer 2 networks after The Merge.
Layer 2 networks have been doing well in the past few months. For example, GameStop selected Loopring for its NFT marketplace while Telefonica partnered with Polygon for its web3 business. Still, the Polygon price remains under pressure considering it is over 40% below its all-time high.
What next for Layer 2 after The Merge
Layer 2 networks like Polygon, Loopring, and Immutable X were developed with a specific goal in mind. They were created with the main goal of supercharging existing blockchain networks like Ethereum.
These platforms help to solve the challenges that Ethereum has. For example, it is widely known that Ethereum transactions are not the fastest and their prices are substantially high. For example, since Ethereum’s transaction per second is below 20, Polygon supercharges this to over 2,000.
Therefore, these networks face a major challenge as The Merge nears. For starters, this is an event that will marry the existing Ethereum with the new version. As a result, it will help transition the network from a proof-of-work (PoW) to a proof-of-stake (PoS).
The end goal of the merge will be to make Ethereum much faster and then lower the total transaction costs. Also, it will make it more scalable in the future. One way it will achieve this is through a technology known as sharding that subdivides blocks into smaller ones.
Therefore, there are concerns about how Polygon will perform after this happens. For one, developers will not need to use its platform to accelerate the speed of their apps.
At the same time, the Polygon price has dropped because activity in its network has been a bit limited. For example, the total value locked (TVL) has dropped from over $10 billion to about $4.17 billion.
Therefore, I suspect that Polygon will struggle to boost its market share in the future. Besides, there is also rising competition from the likes of Solana, Terra, and even Cardano.
Polygon price prediction
The MATIC price has done well in the past few days. It has managed to rise from a low of 1.3175, where it found substantial support to the current $1.6962. It has also crossed the 25-day and 50-day moving averages while the Relative Strength Index has tilted upwards.
Therefore, the coin will likely keep rising as bulls target the next key resistance level at $2. This performance will be because of the ongoing crypto bull run.
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