The Real Reason Behind Polygon (MATIC) Pump

By Bfab | Good vibes | 19 Jul 2022

MATIC pumped from $0.4 to $0.9 in less than a month. As Ethereum (ETH) has announced a date for the Merge, you might think it is the main reason behind MATIC pump. However, MATIC is currently pumping faster to ETH due to a specific reason...

What is the real reason behind MATIC pump?

Polygon team announced in a tweet on July 13 that they will launch a ZK (Zero Knowledge) EVM (Ethereum Virtual Machine) roll-up.

In the meantime, a date has been announced: the ZK EVM will be launched on July 21.

Why Polygon ZK EVM is of importance

Despite the Merge, layer-2 chains are still needed to deploy decentralized applications on Ethereum with reasonable gas fees. There are currently mainly 3 options:

Layer-2 optimistic roll-ups like Optimism or Arbitrum
Layer-2 ZK roll-ups like zkSync or Starknet
Sidechains like Polygon

From a practical point of view, Polygon is the most convenient option, since it allows to make transactions with low gas fees by using MATIC and to easily transfer the MATIC token from and to centralized exchanges.

However, Polygon is not really decentralized and it does not fully benefit from Ethereum security since it is not a real layer-2 chain.

By launching a ZK EVM, Polygon will offer a real layer-2 solution benefiting from Ethereum security while its MATIC token allows to use decentralized applications with low gas fees.

What's next?

MATIC may continue to pump during the deployment of the first DeFi protocols, for instance Aave, on its new ZK EVM chain.

In the longer term, there might be a fierce competition between this solution and the other layer-2 chains like Optimism which launched it OP token, or Arbitrum which might launch its token soon - like Starknet.

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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