Polygon (MATIC), a prominent Proof-of-Stake (PoS) network, experienced a significant increase in user activity over the past month. According to data provided by Artemis, there was a noticeable fluctuation in daily active users throughout the last year, with a sharp rise in the final weeks of 2023 that continued into early 2024.
The number of daily active addresses peaked on January 11th, reaching 678,000, which represented a 63% increase within a month. This surge also indicated more than a doubling in active user count over the past year. Despite this growth in user activity, there was a visible decline in block space demand since the start of 2024, with a 62% drop in the number of transactions on the PoS network year-to-date (YTD), as reported by Santiment.
Conversely, the number of new addresses continued the positive trend from 2023, suggesting a healthy adoption of the network. In the realm of Non-Fungible Tokens (NFTs), Polygon saw a boost in user engagement in December 2023, potentially kickstarting a second NFT wave. Recent activities in the new year have been largely centered around NFTs, with Polygon achieving the third-highest NFT sales volume in the past week and surpassing Ethereum in 24-hour NFT sales for the first time, marking a historic event.
Despite a market downturn, MATIC’s price saw a 6% increase at the time of writing, benefiting from the rising crypto market alongside spot Bitcoin (BTC) confirmations. However, data from Coinglass indicated a decrease in Open Interest (OI) in MATIC futures, suggesting that short-sellers might be closing their positions and exiting the market, which typically leads to liquidity outflows and potential price drops. Active short positions still outnumbered long positions, with the long/short ratio falling below 1, implying that more investors were betting on a price decline for MATIC.