Matic known as polygon exist as a sidechain in helping ethereum to scale. Matic Network is a Layer 2 scaling solution that achieves scale by utilizing sidechains for off-chain computation while ensuring asset security using the Plasma framework and a decentralized network of Proof-of-Stake (PoS) validators.
Matic had gone up 3x since march 2021. Some catalyst including listing on coinbase pro, aavegotchi and aave launch on matic network. Do we still see potential to 3x from current price (0.80cent) ?
First let’s go through their tokenomics. We will be comparing between the total circulating supply versus in staking ratio.
From the chart above we can see the current staking ratio is 25%. A quarter of matic token already being staked in the matic network. Remaining 75% on the market. Since the minimum staking requirement is only 1 matic, literally anyone can become the delegator and stake on matic netwokr. The APR in staking on matic wallet is quite encouraging sitting at around 18% APR. By more matic staking into matic network. Eventually the APR will decrease to minimum of 5% which is still considered a good return.
Next we will be looking into on-chain data to determine the number of matic token on exchange.
We all know less supply equal to more demand. More demand will eventually push up the price. Since matic has a fix supply, if demand increased, the price increased. From the chart above we can observe the overall balance of matic token on exchange is decreasing and the price is increasing in parabolic. From here we can see the user is withdrawing all the matic token to be used on some where else. (Quickswap, curve,aave,…)
Top 3 CEX of matic token
- Binance — 0.24 billion matic token
- huobi — 6.9 million matic token
- FTX — 5.5 million matic token
The largest DEX that provide liquidity for matic is uniswap. However it only comprised around 10 million matic token, which is less than 1% of matic token in circulating supply.
Current total circulating supply ~ 6 billion
Currently staking ~ 1.5 billion (25%)
Currently on exchange ~ 0.5 billion ( 8.3%)
Remaining matic token = 4 billion
Current price ~ $0.80
Since the supply will keep decreasing, we expect the price will keep increasing. Let’s see why.
We all know matic has the largest trading volume among all L2s. Matic has a better user experience with smoother and faster transaction speed compared with ethereum. Transactions fee on matic also is zero-gas which enable all retail investor to be affordable to trade and farm on matic network.
The chart shown us the amount of eth bridge to matic network. There is a spike on april 26 which is correlated with the spike of price in matic. Matic as a L2 chain are supporting ethereum in all the way it can. You can compare the price of ethereum with the chart above. On april 27, price of both ethereum and matic is increasing. (Matic is supporting the price of ethereum!)
Total value locked on matic network also growing exponentially with the launching of aave, curve, quickswap, mstable, paraswap and many others( too much to count).
Total market size of aave had achieved more than 2 billion on matic network. The key highlight is it’s just launch about 2 weeks ago.
Curve aave pool has already more than 200 million in less than a week.
Matic is exploding with new partnership almost everyday including defi, nft and gaming, trading and many others. There is too many project launch on matic which i had lost count of.
Final thoughts
Always remember, the matic token has a fix supply.
What will happen when there is increasing project and partnership launch on matic network?
(You yourself know the answer)
All the data is taking from flipside crypto
Source: https://app.flipsidecrypto.com/dashboard/matic-deep-analysis-5wYZlh
