Crypto market wrap: Polygon rises as developers say goodbye to Terra
Updated
Polygon’s MATIC coin rose on Monday after cryptocurrency project developers decided to say goodbye to the troubled Terra blockchain.
MATIC was up about 2.2% around the time that conventional markets closed in North America, standing out on an otherwise hit-and-miss trading day. (All figures based on CoinMarketCap data.) The increase came after Terra users migrated their projects to the Polygon blockchain that backs MATIC.
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Many projects on move
Polygon Studios CEO Ryan Watt said Friday on Twitter that more than 48 Terra projects – and counting – are part of the migration. Projects that have moved to Polygon include the OnePlanet non-fungible token (NFT) marketplace and the Derby Stars metaverse horseracing play-to-earn game that awards cryptocurrency as prizes.
Polygon is a layer-two blockchain built on top of the Ethereum blockchain.
“As far as projects migrating to the Polygon network, I am not surprised,” Weiss Ratings analyst Alex Benfield told Capital.com. “Polygon has been a very popular platform for developers over the last year or so, as the network is significantly cheaper than [Ethereum] but is still [Ether Virtual Machine] compatible.
“Polygon is also currently working on zk-rollups which could attract some additional projects looking to develop on cutting-edge tech.”
Zk-rollups refer to zero-knowledge roll-ups which, according to CoinMarketCap, enable transactions to be completed faster while keeping gas, or transaction, fees to a minimum.
Popular dApp spells higher prices
Alex Benfield, Weiss Ratings analyst (Courtesy of Alex Benfield)The more projects that are built on Polygon, the greater the chances that it hosts a strong decentralized app (dApp).
“A highly popular dApp can boost network activity, which inevitably ends in higher token prices,” said Benfield.
Polygon, he added, has also been “making waves” because, as a proof-of-stake blockchain, it is friendly to the environmental and social governance (ESG) cause. The network recently achieved carbon neutrality, meaning that it emits and absorbs an equal amount of carbon-dioxide, and is working on becoming carbon-negative.
Under that a carbon-negative scenario, an organization removes more carbon-dioxide than it emits, according to EY.
OnePlanet is spearheading the migration through its project dubbed Ark One.
“The sudden collapse of the Terra ecosystem left a plethora of innovative NFT projects and their communities stranded in the wreckage,” said OnePlanet in a blog post.
“In search of light within the abyss, OnePlanet has taken the lead and built its own version of Noah’s Ark to rescue Terra’s burgeoning NFT biodiversity and take it to a new home [i.e. Polygon].”
UNI to USD
Troubles linked to collapsed coins
Terra is the blockchain behind the related luna and terraUSD coins collapsed in May and were rendered virtually worthless. The nosedives, which caused a crypto market crash, occurred when terraUSD, a stablecoin, lost its peg to the US dollar.
OnePlanet said Ark One has become much more than a salvage operation because the NFT universe is “in dire need” of a fully decentralized and NFT launchpad like the one that the organization operates. A total of 48 NFT projects encompassing 90 NFT collections applied for the migration to Polygon under an application process that ended 15 June.
“This represents a large proportion of Terra projects, including some that did not launch on OnePlanet before the cataclysmic de-peg event,” said OnePlanet in the blog post.
IOTA to USD
OnePlanet aims to add value
OnePlanet said its “vision” is to add value to the NFT universe by giving the best Terra NFT projects “a lifeline” while bringing its decentralized launchpad and marketplace into Polygon.
The OnePlanet NFT marketplace is slated to launch on Polygon in mid-August. OnePlanet said Terra crypto wallets with a Polygon address can migrate eligible NFTS to projects that joined Ark One.
However, Benfield said MATIC, which was trading between $0.56 and $0.60 needs to establish more price stability before it can post steady gains.
“MATIC appears to be channel trading like most other cryptocurrencies at the moment,” he said. “It needs to reclaim $0.60 as strong support before it has any chance of turning bullish in the medium term.”
No other top coins shine
Otherwise, no top 100 coins shined Monday as new financial troubles like those that have hit crypto hedge fund Three Arrows and digital coin lenders Celsius Network and Voyager Digital did not emerge. Most leading coins were down, but declines were relatively modest and in line with usual market fluctuations.
Uniswap and Avalanche fall
In the largest drops, Uniswap (UNI) declined about 8.5%, while IOTA descended 7.5% and avalanche (AVAX) fell approximately 4.5%.
Bitcoin (BTC) and ether (ETH), the coin backed by the Ethereum blockchain, were both down about 2%.
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