One of the projects expected to benefit from Ethereum’s long-awaited “Merger” is the level-2 scaling solution, Polygon and its token, MATIC. This is the conclusion reached by the excellent cryptocurrency analyst, Coin Bureau.
The popular analyst pointed out that Polygon has achieved partnerships in recent times that create a good foundation for its long-term trajectory, however the MATIC token has not managed to avoid being affected by the cryptocurrency bear market. It also reports on the circulating quantity of the token:
“The MATIC token has been hit hard by the cryptocurrency market and is down about 50% since I last covered the project in March, though it is starting to show some signs of recovery. In addition to the cryptocurrency market, MATIC has also been hit by selling pressure, as suggested by the remarkable increase in its outstanding supply in recent months. Since March, MATIC has increased by around 340 million.”
How it will benefit
According to the analyst, MATIC is poised to significantly increase in value as Ethereum moves from a proof-of-work mechanism to a proof-of-participation mechanism. The Coin Bureau pointed out that Polygon will benefit from the change, as its scaling solutions in general will become more environmentally friendly:
“MATIC is likely to continue its near-term rally regardless of these fundamentals and this is due to Ethereum’s upcoming transition to a proof of participation mechanism. This upgrade will drive tokens like MATIC to the… moon.“
Based on technical analysis, MATIC could rise up to $1.50 in the run up to the Ethereum merger, which is expected in mid-September. This has to do with the price action of ETH itself, which is projected to rise up to 2 times between now and then.
This also makes sense because MATIC will almost certainly benefit from the merger, as it will make its scaling solutions more environmentally friendly. This will increase Polygon’s already high appeal to institutional investors.
In addition, Polygon’s scaling solutions will still be needed post-Merger because the Merger will not affect Ethereum’s transaction speeds or transaction fees as much, if at all.”