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Polygon (MATIC) Faces a Severe Profitability Crisis

polygon matic

TL;DR

  • Only 5.63% of Polygon (MATIC) addresses are in profit or at breakeven, according to IntoTheBlock.
  • MATIC has fallen 3.9% in the last 24 hours, now trading at $0.5535, with a 23.5% decline over the last month.
  • Other Ethereum layer 2 protocols like Arbitrum report over 97% of addresses in losses.

Amidst crypto market volatility, Polygon (MATIC) has raised concerns due to alarming data about the profitability of its addresses on the network. According to a recent report from IntoTheBlock (ITB), just a small 5.63% of MATIC addresses are in profit or at the breakeven point. This sharply contrasts with other cryptocurrencies like Bitcoin, where the percentage of profitable addresses is significantly higher, reaching 86.81%.

Polygon, known for being an Ethereum-based layer 2 scaling solution, is going through a very challenging period. Despite its technological innovations, including Polygon CDK and zkEVM adopted by major platforms like Flipkart and OKX, MATIC has experienced a 3.9% drop in the last 24 hours, currently trading at $0.5535. The bearish trend has intensified over the past month, with a decrease of 23.5%, severely impacting the profitability of addresses associated with its ecosystem.

Polygon Joins Ethereum L2 Troubles List

The data revealed by ITB underscores a worrying situation for users and developers within the Polygon network, who are facing significant financial losses on their investments. Despite efforts to maintain a leadership position in Web3.0, widespread negative profitability raises questions about the long-term sustainability of investments on the platform.

Polygon (MATIC)

The downward trend in address profitability on Polygon is not an isolated phenomenon. Other Ethereum layer 2 protocols, such as Arbitrum, have also reported a high proportion of addresses in loss, exceeding 97%. A pattern indicating a clear disconnect compared to profitability observed in Bitcoin and other cryptocurrencies. Projects focused on Ethereum scalability are facing a tough challenge ahead.

Polygon continues to innovate and expand its technology to empower decentralized applications and the digital economy. However, the current reality of its profitability poses challenges. Investors and developers will need to closely monitor their capital and adjust their strategies accordingly.

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