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Crypto market wrap: Polygon rises as developers say goodbye to Terra

By Monte Stewart


Updated

Illustration of coin and images
Unlike most altcoin prices, Polygon rose Monday after cryptocurrency developers decided to say goodbye to the troubled Terra blockchain. - Photo: Shutterstock

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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MATIC to USD

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

Photo of ManAlex 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].”

XRP/USD

0.60 Price
+3.590% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

67,438.20 Price
+0.720% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.14 Price
+8.170% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

175.29 Price
+2.890% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

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%.

 

Markets in this article

MATIC/USD
MATIC/USD
0.56288 USD
0.01139 +2.150%
UNI/USD
Uniswap / USD
8.06120 USD
0.05396 +0.680%
AVAX/USD
Avalanche / USD
29.1382 USD
0.6005 +2.120%
BTC/USD
Bitcoin / USD
67438.20 USD
479.45 +0.720%
ETH/USD
Ethereum / USD
3532.03 USD
23.54 +0.670%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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