Layer 2 networks have been doing well in the last few months. For example, GameStop has selected Loopring as its NFT marketplace, and Telefonica has partnered with Polygon in its Web3 business. Still, Polygon’s prices are still under pressure given that they are more than 40% below record highs.
The next step in layer 2 after merging
Layer 2 networks such as Polygon, Loopring, and Immutable X were developed with specific goals in mind. They were created primarily to supercharge existing blockchain networks like Ethereum.
These platforms are Ethereum I have it. For example, it is widely known that Ethereum transactions are not the fastest and their prices are quite high. For example, Ethereum has less than 20 transactions per second, so Polygon supercharges it to over 2,000.
Therefore, these networks face major challenges as The Merge approaches. For starters, this is an event to marry an existing Ethereum to a new version. As a result, it helps to move the network from Proof of Work (PoW) to Proof of Stake (PoS).
The ultimate goal of the integration is to make Ethereum much faster and reduce total transaction costs. It will also be more scalable in the future. One way to do this is to use a technique called sharding that breaks the blocks into smaller blocks.
Therefore, there are concerns about how Polygon will work after this happens. First, developers don’t have to use the platform to speed up their apps.
At the same time, Polygon’s price has dropped due to some restrictions on Polygon’s network activity. For example, the locked total value (TVL) Has decreased from more than $ 10 billion to about $ 4.17 billion.
Therefore, I think Polygon will have a hard time expanding its market share in the future. Moreover, competition with Solana, Terra and even Cardano is intensifying.
Polygon price forecast
MATIC prices have been strong in the last few days. It managed to rise from the low of 1.3175 and found substantial support for the current $ 1.6962. It also exceeded the 25th and 50th moving averages while the Relative Strength Index was tilting upwards.
Therefore, the coin may continue to rise as the bull is targeting the next major resistance level, the $ 2. This performance is due to the ongoing cryptocurrency.