Onchain Ethereum Fees Remain Low Ahead of the Merge, 4 L2 Networks Offer Transfers Below a Nickel

August 28, 2022 Bitcoin.com

L2 Scaling Solution Arbitrum Schedules Nitro Rollup Stack Upgrade for August 31

August 7, 2022 Bitcoin.com

Polygon gains 83% in a month, but data show project has been losing traction

August 1, 2022 Coin Telegraph

Coin Telegraph

MATIC's market cap is 69% below its all-time high, and the network's TVL and DApp data haven't picked up recently.

Polygon (MATIC) had a promising July, gaining an impressive 83% in 30 days. The smart contract platform uses layer-2 scaling and aims to become an essential Web3 infrastructure solution. However, investors question whether the recovery is sustainable, considering lackluster deposits and active addresses data.

According to Cointelegraph, Polygon rallied after being selected for the Walt Disney Company's accelerator program to build augmented reality, nonfungible token (NFT) and artificial intelligence solutions.

Polygon announced on July 20 plans to implement a zero-knowledge Ethereum Virtual Machine (zkEVM), which bundles multiple transactions before relaying them to the Ethereum (ETH) blockchain. In a recent interview with Cointelegraph, Polygon co-founder Mihailo Bjelic stated this solution would slash Ethereum fees by 90% and boost throughput to 40–50 transactions per second.

Another reason for Polygon's rally was the growing number of platforms that started to offer liquid staking for MATIC tokens, which enabled holders to earn additional rewards. Examples include Lido Finance, Balancer, Meshswap and Ankr Staking, according to DeFi Pulse.

Despite currently being 69% below its -time high, Polygon remains a top-12 token by capitalization rank. Moreover, the network holds $1.72 billion worth of deposits locked on smart contracts, known in the industry as total value locked, or TVL.

Polygon's Ethereum-compatible scaling is fully functional, hosting decentralized applications (DApps) that vary from decentralized exchanges (DEXs), collateralized loan services, yield aggregators, NFT marketplaces and games.

Polygon smart contracts deposits dropped 42%

Despite Polygon's 83% rally in 30 days, the network's TVL measured in MATIC tokens dropped by 42% in the same period. As a comparison, Fantom (FTM) scaling solution declined by 14% in 30 days and Klaytn (KLAY) increased by 11%.

*Polygon Total Value Locked, MATIC. Source: DefiLlama*

In dollar terms, Polygon's current TVL of $1.42 billion is 67% lower year-to-date. Still, such a number is not distant from Solana's (SOL) $2.08 billion, or Avalanche's (AVAX) $2.52 billion, according to DeFi Llama data.

To confirm whether Polygon's TVL decline is caused by fading adoption, one should analyze DApp usage metrics. Nevertheless, some DApps, such as games and NFT marketplaces, do not require large deposits, so the TVL metric is irrelevant in those cases.

*Polygon DApps 30-day usage metrics. Source: DappRadar*

As shown by DappRadar, on August 1, on average, the number of Polygon network addresses interacting with decentralized applications decreased by 19% versus the previous month.

Considering Polygon's TVL has declined by 42%, the network lacks a more substantial user base growth to support further MATIC token price momentum. Still, Quickswap, the leading DApp, presented 138,530 active addresses over the past 30 days. As a comparison, the leading Ethereum application OpenSea held 299,910 users in the same period.

The above data suggest that Polygon has lost some of its traction in the market for scaling solutions. However, the project's recently announced zero-knowledge is yet to be implemented, but its benefits could drive MATIC above $1.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Avalanche (AVAX) price drops 45% in a month and data points to further downside

June 21, 2022 Coin Telegraph

Coin Telegraph

AVAX is testing support at $14.80 and the network’s DApp use is underperforming its competitors, suggesting that the easiest path forward is down.

Avalanche (AVAX) is down 45% in 30 days and in the same time the cryptocurrencies' total market capitalization shrank by 29%.

Despite the recent downturn, this decentralized application (DApp) platform remains a top contender in the layer1 and layer2 race and it ranks high in terms of smart contract deposits and active addresses. Yet, the lackluster token price is still causing investors to rethink whether the network remains a “serious” competitor.

*AVAX token/USD at FTX. Source: TradingView*

The brutal sell-off on risk assets caused AVAX to test the $14.80 support multiple times, while the current market capitalization stands at $4.8 billion. It’s important to also note that the network's total value locked (TVL) holds an impressive $3.2 billion.

As a comparison, Solana (SOL) offers incredibly low network fees and holds a $2.1 billion TVL. Yet, SOL token's market cap stands at $12.9 billion, which is almost 3 times larger than Avalanche's valuation at the $14.8 price level.

The TVL indicator is extremely relevant because it measures the deposits on the network's smart contracts. If we use Polygon (MATIC), an Ethereum layer-2 solution, as a proxy, the network holds a $1.8 billion TVL while the token's market capitalization stands at $3.5 billion.

In short, Avalanche looks heavily discounted considering how similar networks’ market capitalization vastly exceed their respective TVL.

Total value locked increased, but the number of users declined

Avalanche's primary decentralized application metric strengthened in the last 60 days as the network's TVL jumped to 184 million AVAX tokens. This suggests that even as AVAX price crashed, investors did not withdraw tokens from its decentralized applications.

*Avalanche network total value locked, AVAX. Source: DefiLlama*

In terms of AVAX tokens, the network's TVL has effectively grown by 35% in two months. As a comparison, Ethereum’s TVL increased by 10% in Ether terms, while BNB Chain faced a 14% reduction in the same period.

To confirm whether the TVL increase in Avalanche is encouraging, traders should analyze DApp usage metrics. Some applications, such as games and marketplaces, do not require large deposits, so the metric is irrelevant in those cases.

*Avalanche DApps 30-day data. Source: DappRadar*

As shown by DappRadar, on June 21, the number of Avalanche network addresses interacting with decentralized applications declined by 42% versus the previous month. In comparison, the BNB Chain faced a 16% user decrease, while Polygon declined by 29%.

Price follows fundamentals, which have gone down

Even though Avalanche's TVL has outperformed competing Dapp networks, the decrease in network use is concerning. For instance, Trader Joe's 93,130 active addresses are smaller than Polygon's leading DeFi application, QuickSwap, which holds 161,040 active users.

The above data suggest Avalanche is in troubled waters and might explain why the AVAX price plunged 45% in 30 days. Investors will likely remain skeptical of the $14.80 support until the network usage metrics improve, especially the number of active addresses in DeFi.

Circle Announces the Stablecoin USDC Is Now Supported by the Polygon Network

June 8, 2022 Bitcoin.com

$72M Illuvium NFT Land Dutch auction saves buyers thousands on gas fees

June 8, 2022 Coin Telegraph

Coin Telegraph

The use of a Dutch auction on its own chain may be two major factors that contributed to the sale’s success in selling out the Land plots and keeping gas fees low.

Open-world blockchain game Illuvium managed to keep the average transaction fee for its nonfungible token (NFT) Land at about $20 by holding the Dutch auction on the Illuvium X Layer-2 scaling solution.

The price to mint the NFTs was a fraction of the cost users paid to mint in Yuga Labs’ Otherside sale. Illuvium reports that users spent only $350,000 in fees in total to mint nearly 20,000 plots of Land worth about $72 million, all without any reported network errors.

By contrast, the Otherside sale was plagued with issues. Users paid an average of $6,000 in gas fees and some as high as $14,000. Ethereum became congested as buyers attempted to get their orders filled as quickly as possible.

The 19,969 plots of Land were sold mainly to ILV holders using a Dutch auction format, where the price per unit decreases over time based on how many are sold ahead of it. This allowed potential buyers to wait for a more desirable price range to place an order.

Co-Founder of Illuvium Kieran Warwick said the sale had been designed as an antidote to Ethereum NFT sales that result in wasteful bids that reward miners and cost the buyer.

The 4,018 ETH raised in the sale, valued at about $7.4 million, will be redistributed to holders of Illuvium’s native ILV token. However buyers mostly used ILV tokens to make their purchases. The 239,388 sILV2, a staked version of ILV tokens, will be burned.

It was a fairly impressive effort considering the NFT bear market which has suffered a major decline in volume over the past 30 days. Sales volume topped $137 million on May 6 and has fallen 78% to $31 million as of June 5 according to NFT market tracker CryptoSlam.

Illuvium is a decentralized fantasy RPG of epic scope based on massive battles of creatures called Illuvials.

Illuvium NFT Land plots are a pivotal aspect of the game’s ecosystem. Land generates FUEL, which is used to capture game characters called Illuvials or sold for Ether (ETH). There will also be utility for Land on the upcoming Illuvium Zero game.

The Illuvium Land Sale is officially over!

All Land Plots Sold Out
$72M+ in Total Sales
239,388 sILV2 to be burned
4,018 ETH to be redistributed
NO GAS WARS

MASSIVE thank you to all participants and partners that helped make this a historic success ♊️ pic.twitter.com/adMTq6PpKe
— Illuvium (@illuviumio) June 5, 2022

Warwick believes Illuvium’s game design and tokenomics set it apart from other gaming finance (GameFi) competitors. But he told Cointelegraph that Illuvium is free to play for casual gamers who aren’t yet willing to stump up some cash. “It wasn't an option to not have a free to play version,” he said.

The game combines collectibility and built in rarity. Warwick said each in-game character NFT, called an Illuvial, is unique and the supply is deflationary. One method to deflate the supply is that to level up an Illuvial requires burning three others.

Each Illuvial also comes in a set that only remains available for six months. Warwick said, “Every six months we produce a new set and you can never collect those Illuvials ever again.”

“So people can play for free as much as they want. Using the tier zero Illuvials and shards. But if they want to explore further with higher level characters is when they start paying.”

Illuvium will have its work cut out to gain traction in the current conditions with the NFT gaming industry seeing a troubling 82% drop off in daily sales volume. Daily volume hit $70.3 million on Jan 1, 2022, but clocked in at just $13.7 million on June 6 according to decentralized app (Dapp) tracker DappRadar.

Related: Could GameFi and carbon currencies reverse blockchain’s climate stigma?

Scaling