Polygon’s MATIC Price Rises After NFT Integrations and Ethereum Upgrade

• Polygon’s native token MATIC saw a 8% increase in price at the start of 2022 despite dropping 64% the previous year.
• Ethereum’s upcoming Shanghai upgrade could present a challenge for Polygon’s Layer 2 offering of low gas fees.
• DeGods and y00ts bridging their collections to Polygon and Ethereum in Q1 2023 could bring more interest in the NFT market, pushing the price of MATIC upwards.

Polygon, a Layer 2 scaling solution, has seen an increase in usage since its launch in 2021. The network has attracted the attention of the crypto-verse with its promise of low gas fees and faster transaction speeds compared to Ethereum. The native token of the network, MATIC, saw a 64% drop in value in the year 2022, but it started this year on a positive note with its price shooting up 8% according to the charts.

The Layer 2 ecosystem has been seeing on-chain developments grow, with Polygon’s first prediction market Bhavish Finance making several records that brought Polygon in the spotlight. Uniswap, a decentralized exchange in the ecosystem, ended 2022 with a $28 billion annual volume, which was surprisingly accomplished with a sub-$100 million TVL. As of writing, Uniswap’s TVL on Polygon is at $111.21 million, according to the DEX’s public dashboard.

The bullish developments are preceded by big news on Polygon’s NFT arm. DeGods and y00ts, two of the biggest names on Solana, will bridge their collections on Polygon and Ethereum on Q1 of 2023. This would inevitably bring interest on Polygon’s NFT market, pushing the price of MATIC upwards.

However, the nearing timeline of the ‚Shanghai‘ network upgrade of Ethereum could present a challenge for Polygon’s main offering, which is low gas fees due to a better roll-up protocol. The upgrade could prove to be a double-edged sword, as it could potentially make Ethereum more competitive in terms of fees and transaction speed, making Polygon’s offering less attractive. In addition, the network upgrade could also bring more attention to other Layer 2 protocols, such as Optimism and Matic, and divert some of the attention away from Polygon.

It remains to be seen what developments on-chain would differentiate Polygon from Ethereum’s upgrade and other Layer 2 protocols. Crypto FUD could also strengthen the bears in the long-term and potentially cause the MATIC price to drop. However, if the network can continue to attract attention and provide a compelling offering, its native token could continue to grow and increase in value.