Polygon NFT Volume Hits 6-Month High, Igniting Renewed Interest in Layer-2 Scaling Solution

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Trent Alan

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Trent Alan

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Trent has a background and education in journalism and communications, with two decades of experience editing and writing on a diverse array of topics. In recent years, however, he has shifted his...

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January 8, 2024 13:01 EST

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The NFT market on the Polygon blockchain network saw considerable growth and renewed interest in December 2023, according to data from market trackers CryptoSlam and DappRadar.

Polygon’s daily NFT sales volume spiked to nearly $10 million on December 6—the highest single-day volume seen in over six months—making Polygon the third-largest NFT market behind Ethereum and Bitcoin for that day.

MATIC Bulls Charge Ahead Amid Volume Explosion

The increase in NFT trading volume brought about a rise in the MATIC price as well. MATIC gained over 3% in the past 24 hours to trade around $0.83, buoyed by the upbeat Polygon NFT metrics.

Polygon’s surge also enabled it to flip Solana in terms of NFT sales volume. The takeover started when Solana NFT volume declined 17% to $4.1 million in a day, while Polygon saw its volume jump 42% to hit the $10 million milestone, according to data from CryptoSlam.

DappRadar shows that popular Polygon NFTs driving growth include Genesis WildPass, Collect Trump, The Sandbox, and Gas Hero Coupon. Trade volume for these collections has been steadily rising over the past month.

Polygon’s NFT sales volume is continuing its growth with nearly $40 million in January already.

NEW:

Polygon nears $40M in NFT sales volume for the month of January only 8 days into the month. pic.twitter.com/zaklYAoPkN

— Today In Polygon (@TodayInPolygon) January 8, 2024

Concerns Remain Despite Volume Comeback

Some areas of concern are still present within Polygon’s ecosystem, however. The number of unique addresses and transaction count declined after peaking on Christmas day, hinting at potential weaknesses.

The rise in wash trading is also problematic, with reported wash volume exceeding $850,000 on Polygon. But this pales compared to the $10 million in organic volume, easing some concerns.

Overall, Polygon’s resurgence signals renewed investor interest in Layer-2 scaling solutions for Ethereum. With high Ethereum gas fees, traders are flocking to cheaper alternatives to mint and trade NFTs.

Saw a Matic Whale performing similar patterns on at least 14 wallets.

The process:
withdraw the same amount of $MATIC ($53.53k) from Coinbase to multiple wallets, send it through the Polygon Plasma Bridge, and then back to Coinbase. pic.twitter.com/TJ7tTjQjUP

— Cryptocondom Intern (@intern_cc) January 3, 2024

MATIC Outperforms Overall Bearish Market

The crypto markets have suffered heavy declines in 2023, weighed down by macroeconomic headwinds. Yet Polygon and MATIC have showcased relative strength amidst the carnage.

MATIC saw prices go up over 35% in the past three months and much of these gains came in December, fueled by the surge in NFT volume and optimism around scaling solutions.

The Q4 performance set MATIC up for an intriguing 2024 as investors bet on winners emerging from the crypto rubble. With NFT and metaverse projects relying on scaling solutions, MATIC and Polygon appear set for further upside.