The bright rise of MATIC has been well documented in the past weeks. Its growth has surprised many of the other projects, especially since MATIC has been in space for over 3 years.
While the project has now been renamed Polygon, it's hard to focus on anything else when it comes to the asset. However, credentials continue to differ in terms of both activity and development.
Is MATIC now in a Macro-Economic stage?
Polygon's network leveraged the base set by Ethereum in 2021. Countless DeFi projects are competing to launch their networks on ETH or other platforms, and this has led to increased transaction numbers and high fees. It reached the Ethereum ceiling pretty quickly when fees became unreachable at one point. Binance Smart Chain took the first lead at the top with 11 million transactions per day, with Polygon leading at the time of writing.
In fact, reports indicate that Polygon now has an advantage over BSC as it hosts DeFi implementations already proven on Ethereum.
It's commendable how quickly Polygon built its user base. Take QuickSwap as an example. QuickSwap is what Uniswap is to Ethereum, and while there isn't much confusion surrounding the protocol, the numbers speak for themselves.
QuickSwap already has more users than all-time leading users like Sushiswap and Curve finance, and the app is powered by Polygon and its L2 network.
How does AAVE relate to Polygon?
There is no connection per se, but there is a really productive working condition. AAVE in Polygon has been fast, as the average Polygon user applying AAVE transactions has steadily increased. Unique addresses using AAVE on Polygon have steadily increased, with only a minor setback seen during the most recent market crash.
But what does AAVE offer Polygon in terms of reliability? AAVE is probably one of the largest lending protocols in DeFi and is only behind Compound. In fact, AAVE briefly changed the narrative when the protocol implemented new liquidity incentives, assuming liquidity leadership between the two platforms.
Now, Compound has a higher market size and usage. But AAVE has a higher market capitalization and better token economy with better incentives for users.
Polygon meets AAVE's requirements for faster and more reliable transactions, and in return, AAVE provides greater efficiency and overall reliability. The price assessment of MATIC and AAVE may have reached a saturation point at the time of writing, but it wouldn't be surprising if both tokens achieve a higher price correlation going forward in the market.
Love the data visuals!