Is Polygon Nonetheless a Purchase After Ethereum Merge?

Resulting from The Merge, some buyers targeted on polygon (MATIC 1.82%, As a possible beneficiary of main technological upgradation Ethereum (ETH) 2.77%, was about to cross. In spite of everything, Polygon is mostly thought of to be the dominant Layer 2 scaling resolution for Ethereum, so it is smart that Polygon would profit from The Merge as properly. There was a quick spike in the summertime when the worth of Polygon tokens tripled from $0.30 to $1, however they’ve now settled in a buying and selling vary round $0.75.

Does this imply that buyers have cooled down on Polygon’s prospects? Or is it only a realization that it’ll take longer than anticipated for Ethereum to appreciate all of the efficiency enhancements made by the neighborhood? Anyhow, with the completion of the merge behind us, this is likely to be a great time to reevaluate the funding case for Polygon.

Battle of Layer 2 Options

The excellent news is that, even after the merger, Ethereum will proceed to depend on Layer 2 scaling options reminiscent of Polygon to cut back “gasoline charges” and clear up blockchain congestion. Ethereum co-founder Vitalik Buterin has already advised us. Nevertheless, there are many different Layer 2 options on the market, together with optimism (OP 2.45%,, looping (LRC) 2.74%,And arbitrum, So there may be actually no assure that Polygon will keep its place because the dominant Layer 2 scaling resolution for Ethereum.

Business professional working on laptop at night in office building.

Picture Supply: Getty Pictures.

The issue for buyers is that it’s troublesome for any non-blockchain professional to grasp what differentiates all these options. The present dialogue is across the “ZK rollup” that Polygon offers, however this most likely will not make sense to the typical investor who’s unfamiliar with ZK (zero information) proofs. Are you keen to speculate your hard-earned cash in one thing you do not perceive? This may occasionally clarify the explanation why the worth of Polygon hasn’t stayed above $1 since August, regardless of all the joy surrounding The Merge.

new layer 3 resolution

Making issues extra difficult, Buterin just lately stated that he’s taking a look at Layer 3 options, that are one other strategy to cut back charges and congestion on Ethereum. He is not fairly positive what kind these layer 3 options will take, nevertheless it appears just like the layer 2 ecosystem has already matured, so it is time to see what lies forward.

In contrast to Layer 2 options, which sit proper on high of the Ethereum blockchain, says Buterin, Layer 3 options is not going to be stackable. This additional complicates points reminiscent of safety and scalability. Nevertheless, as quickly as the primary Layer 3 resolution seems, buyers could also be tempted to maneuver out of a Layer 2 resolution and right into a Layer 3 resolution as they pursue the following huge factor. What this would possibly imply for polygons is just not clear.

Excessive-Profile Model Partnerships

That is why I am utilizing a easy variable to find out if Polygon continues to be a purchase after The Merge: the variety of high-profile model partnerships the corporate pronounces. There was a quick wave of pleasure after the announcement of the partnership with meta (meta 5.37%, one for non-fungible tokens (NFTs) on Fb and Instagram, and the second following the announcement of a partnership with Disney (dis 3.70%, throughout summer time. Additionally, it has inked partnership offers with a number of different high-profile manufacturers. In September, Polygon introduced a partnership with starbucks (SBUX 3.36%,, I believe these model partnerships are the important thing to unlocking the total worth of Polygon. So long as Polygon continues to announce related varieties of partnerships, I might be bullish on the token.

Is Polygon a Purchase?

Proper now, I believe Polygon is the clear chief within the Layer 2 blockchain enterprise. Nevertheless, it pays to be careful for the opponents. For instance, Arbitrum doesn’t but have a crypto token, however has been broadly hailed as probably the greatest Layer 2 scaling options.

On the finish of the day, Polygon has the very best market cap of any Layer 2, the perfect know-how, and essentially the most high-profile model partnerships. If the world’s high manufacturers are selecting Polygon to assist launch their new NFT and Web3 tasks, that is an enormous issue for me. Even after The Merge Polygon continues to be a purchase, and I wish to add to my place whereas this crypto is buying and selling at costs under $1.

Randy Zuckerberg, former Director of Market Growth and sister of Fb spokesperson and Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of administrators. Dominic Basulto holds positions in Ethereum and Polygon. The Motley Idiot has and recommends places in Ethereum, Meta Platform, Inc., Polygon, Starbucks and Walt Disney. The Motley Idiot recommends the next choices: lengthy January 2024 $145 name at Walt Disney, quick January 2024 $155 name at Walt Disney, and quick October 2022 $85 name at Starbucks. The Motley Idiot has a disclosure coverage.

Supply hyperlink