MATIC, OP, ARB: Layer 2 tokens play catch up as attention shifts from Solana to Ethereum
- Polygon, Optimism and Arbitrum Layer 2 tokens are on a tear rising alongside their base blockchain, Ethereum.
- The positive outlook seen among L2 tokens comes as capital flows into the Ethereum chain whilethe Solana ecosystem takes a breather.
- The contention revolves around innovation, with enhanced privacy, interoperability, and a rich DeFi ecosystem playing pivotal roles.
Polygon (MATIC), Optimism (OP) and Arbitrum (ARB), among other Layer 2 (L2) tokens are in the limelight currently, following on the heels of their basal blockchain, Ethereum (ETH).
Also Read: Ethereum price eyes $2,500 mark as Solana market takes a breather
Layer 2 tokens on a tear as attention shifts from Solana to Ethereum
Coming on the back of shifted attention from Solana to the Ethereum blockchain, L2 tokens, including MATIC, OP, and ARB are rising. MATIC is up 5% while OP and ARB are up 15%, flanked with tenfold trading volume surges, pointing to increased interest among traders.
As seen in the charts below, the odds continue to favor the bulls, given the strong buyer presence in the respective markets, indicated by the large volumes of green histogram bars in the positive zone. The Relative Strength Index (RSI) positions also suggest a strong price strength, further accentuating the bullish outlook.
MATIC/USDT 1-day chart, OP/USDT 1-day chart, ARB/USDT 1-day chart
It comes amid shifted focus from the Solana to Ethereum blockchains, with the two Layer 1 (L1) platforms, which provided bases for various L2 networks, still subject for debate on metrics of innovation. Specifically, enhanced privacy, interoperability, and a rich decentralized finance (DeFi) ecosystem play pivotal roles in the battle for superiority. Nevertheless, Solana founder Anatoly Yakovenko urged for the dismissal of the ‘Solana is an Ethereum killer’ narrative, saying that he envisions a future where the two projects co-exist.
Don’t bring back last cycle “eth killer” bs. It’s lame. Pareto efficient technologies can have overlapping features and will compete, but that’s all ok. I don’t see a future where solana thrives and somehow eth dies. I am such a techno optimist that I am certain that…
— toly (@aeyakovenko) December 2, 2023
Notwithstanding, the capital flow into the ETH network at the expense of the SOL network is evident, with Ethereum price rising 6% on the day against Solana’s 3% drop. However, on the weekly timeframe, ETH is up 8% while SOL is up 32%.
Among the key drivers for the Solana price, apart from the meme coin fever that continues to fade, is the epic rally in Bonk Inu price. As BONK price surged 1,111%, Solana Saga phones sold out in the US market with traders chasing the 30 million BONK tokens that were being given as a bonus for purchase.
lol. just so everyone is aware, @solanamobile saga sales have >10x'd in the past 48 hours, and are now on track to sell out before the new year.https://t.co/SzKht4DTYL
— raj (@rajgokal) December 14, 2023
It is worth mentioning that there is no guarantee that buyers will make a profit on the Saga phone purchases because the bonus tokens will only be received once the phones are delivered. If BONK price dips, as is characteristic of speculative tokens, the paper gains would evaporate.
At the time of writing, the price of the Solana-based meme coin, BONK, is down 7% on the day, with prospects for more losses as technicals such as the RSI and the AO indicator flash bearish. This also reiterates the shifted interest away from Solana.
BONK/USDT 1-day chart
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
