March 29, 2023
Polygon News

DeFi on Polygon Faces Turbulent Times

Despite the 25% increase in the value of MATIC over the last two months, DeFi on the Polygon blockchain doesn’t seem to be performing at its best. The Polygon blockchain has introduced top projects such as SushiSwap, Aave, and QuickSwap, but this has not been enough to boost the DeFi sector. The Polygon DeFi sector experienced a drop from $4.84 billion recorded in late July to $3.16 billion in mid-September.

The Polygon blockchain DeFi sector enjoyed a tremendous boost in investors in the spring of 2021 because of the outrageous gas fee on the Ethereum blockchain. This pushed many investors to look for a new and effective blockchain with a lower gas fee; the Polygon blockchain happens to provide just that. The Polygon DeFi network peaked at over $7 billion in Total Value Locked (TVL) in June. However, despite the sharp drop in the TVL of DeFi in the Polygon ecosystem, the value of the native token, MATIC, has been stable.

With the stable price of MATIC, there is still enough room for growth in the Polygon DeFi sector. Also, a larger part of the drop was attributed to more activity focusing more on gaming in recent times. We expect the sector to recover soon with forthcoming updates to DApps on the network.