• Polygon recorded positive momentum amid migration from MATIC to POL.
  • The L2 network plans to enhance productivity through the AggLayer launch this year.

Polygon’s Q4 report , released by Messari Research, highlighted the blockchain’s key achievements in the quarter. Specifically, Q4 brought recovery for Polygon’s native token, POL, following its transition from MATIC. Building on its latest achievements, the Polygon network is set for a transformative 2025, with several developments on the horizon.

Polygon’s Key Milestones in Q4, 2024

A major shift in the Polygon ecosystem in the fourth quarter of 2024 is the migration from MATIC to POL. As noted in our earlier post, the migration introduces the POL token to the Polygon network. Thus, POL now serves as the native gas and staking token for all transactions on Polygon’s Proof-of-Stake (PoS) network.

POL (formerly MATIC) hit an all-time high market capitalization of $12.9 billion in Q1 2024. However, POL saw huge declines in subsequent quarters, coinciding with a broader market downturn. The market soon improved in Q4 2024, as users migrated 1.38 billion MATIC tokens to POL. Consequently, the token’s market capitalization skyrocketed 31% over the previous quarters to $3.8 billion.

By the end of Q4, 88.1% of the supply had transitioned to POL, while 11.9% remained in MATIC. With a current market cap of $2.8 billion, POL ranks as the largest Ethereum Layer-2 token.

Meanwhile, Polygon transaction activity showcased contrasting trends in Q4 2024. The Polygon total transactions decreased by 2% QoQ, but the average transaction fee increased by 56.7%. This surge increased total transaction fees by 53.2% from the previous quarter to $2.9 million.

In Q4 2024, Polygon PoS saw a decline in active addresses. The average daily active addresses decreased by 39.4% to 523,000 QoQ. Much of this decrease is largely attributed to a reduction in gaming activity, a major driver of user engagement on Polygon.

Meanwhile, Polymarket emerged as Polygon’s biggest winner in Q4 2024. Polymarket, a Polygon-based predictions market, gained global recognition for facilitating almost $3 billion in bets on the 2024 US elections. 

What to Expect for Polygon in 2025

Polygon is set for a major transformation in 2025, as highlighted by plans for the AggLayer mainnet launch in February. AggLayer is designed as an interoperability protocol to enable seamless transactions across blockchains and expand the Polygon Miden Beta testnet.

AggLayer leverages ZK proofs to ensure secure cross-chain communication, asset transfers, data sharing, and unified liquidity across diverse chains.

Polygon Labs recently integrated AUSD as the stablecoin for AggLayer to expand its functionalities, as CNF mentioned earlier. AUSD provides a unified liquidity solution, allowing for smoother, more efficient transactions across connected networks.

Furthermore, it could expand further into the tokenization sector, especially considering its institutional collaborations with HSBC and BlackRock. Intriguingly, Lumia, a blockchain-based project, has announced plans to tokenize $220 million in Istanbul real estate using Polygon’s technology.

In addition, Polygon seeks to maintain leadership in Web3 infrastructure, capitalizing on the ZK technology and cross-chain liquidity. 

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