Polygon (MATIC) has gained significance with the rise of the Layer-2 network, Arbitrum (ARB), highlighted by its trading volume reaching nearly $435 million at the end of December, marking the second-highest of the year. However, a recent decline in Polygon’s Total Value Locked (TVL) contrasts with Arbitrum’s consistent growth, with its TVL exceeding $2 billion.
In March 2023, Polygon’s volume peaked at approximately $669 million, a figure only surpassed in 2021 when it exceeded $2 billion. At the time of writing, Polygon’s TVL had dropped to around $845 million, while Arbitrum had maintained a dominant position in the Layer-2 market with a TVL of over $9.8 billion, claiming nearly 50% market share.
Arbitrum’s 24-hour trading volume exceeded $405 million, with notable spikes reaching $1.8 billion twice in the new year. In contrast, Polygon’s more modest performance placed it at 12th with a TVL of $111 million, holding less than 1% of the market share, indicating a significant shift in the Layer-2 landscape.
Polygon’s price experienced a significant drop of about 11.8% on January 3rd, struggling to recover from a pre-crash trading price of around $1 to approximately $0.8. Meanwhile, Arbitrum demonstrated resilience during market downturns, gaining over 8% amidst a broader market decline, although it faced a subsequent drop.
Overall, while Arbitrum continues to attract a larger user base and higher volumes, indicating a growing market presence, Polygon faces challenges in maintaining its position in the competitive Layer-2 market.