In the fourth quarter of 2024, Polygon (formerly MATIC) experienced a significant mixed performance in key metrics, primarily driven by the testnet launch of its interoperability protocol, Agglayer. This new initiative aims to facilitate cross-chain token transfers and message-passing, enhancing the functionality and integration of various blockchain networks. Polygon Market Cap Rebounds To $3.8 Billion According to market intelligence firm Messari, by leveraging zero-knowledge (ZK) proofs, Agglayer promises secure communication and asset transfers, positioning itself as an innovative development akin to the introduction of TCP/IP in the early days of the internet.
However, as market conditions began to stabilize in Q4, the migration of MATIC tokens—1.38 billion in total—into POL resulted in a 31% QoQ increase in POL’s market capitalization, which reached $3.8 billion by the end of the quarter. Notably, 88.1% of the total supply had transitioned to POL, solidifying its position as the largest Ethereum Layer-2 token by market cap.
After achieving an all-time high market capitalization of $12.9 billion in Q1, the subsequent quarters saw a sharp decline, with the market cap plummeting to $2.9 billion by the end of Q3, marking a 47.2% quarter-over-quarter (QoQ) drop. This downturn was partly due to the ongoing transition from MATIC to POL, which temporarily split market capitalization between the two tokens.
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