Speculation mounts over Polygon’s foray into zero-knowledge proofs.

As cryptocurrencies continued to recover Tuesday from last weekend’s massive sell-off, Ethereum scaling solution Polygon was among the biggest gainers.

MATIC, the native token of the Polygon blockchain, surged from $1.79 on Monday morning to $2.50 over the ensuing 24 hours, a nearly 40% gain. At the time of publication, the price had since dipped to $2.32.

The increase occurred as more users have become aware of Polygon’s lower costs and greater efficiency and scalability. Speculation has also mounted over what the firm has called an “exciting announcement,” scheduled for Dec. 9 at Polygon virtual “zk day.”

The event will center around the applications of zk-STARKs and zero-knowledge (ZK) proofs, a type of cryptography that can verify whether a given statement is true without revealing the data that proves it.

“I think investors are finally waking up to the fact that Polygon is essentially an index fund of Ethereum scaling solutions and the 800-lb gorilla in the [zero-knowledge] space,” Polygon Global Head of Institutional Capital Dean Thomas said.

Polygon is a protocol and framework for building and connecting Ethereum-compatible blockchain networks, offering an ecosystem with lower transaction costs and faster speeds than Ethereum.

Zero knowledge

ZK-rollups are a technology that helps Ethereum scale without compromising the blockchain’s decentralization and security.

Matter Labs’ zkSync and StarkWare’s StarkNet are both examples of ZK-based Ethereum scaling solutions. Both projects also closed $50 million funding rounds in November, with zkSync’s led by Andreessen Horowitz and StarkNet’s led by Sequoia Capital.

This past August, Polygon merged with ZK protocol Hermez in a $250 million deal, introducing ZK rollup capabilities to Polygon for the first time. Polygon followed up in September with a partnership with audit giant Ernst & Young to build Polygon Nightfall, a privacy-focused ZK-rollup geared towards enterprise use.

“[Polygon’s] priority is to help scale Ethereum and ZK is the biggest bet to achieve it,” a spokesperson for Polygon told CoinDesk.

User growth

Over the past several weeks, Polygon has also attracted interest from venture capitalists and institutional investors as Ethereum’s soaring gas fees have sent projects fleeing to cheaper blockchains.

In a newsletter sent to the community this morning, Polygon reported all-time high network revenue for November and reached over 300,000 active addresses.

Polygon also saw record monthly volume of nearly $60 million on non-fungible token (NFT) marketplace OpenSea last month.

“We are significantly undervalued by any metric be it daily active users, transaction volume, or number of dapps being built on our platform,” Thomas told CoinDesk.

Earlier this month, decentralized exchange IDEX launched its v3 on Polygon, aiming to combat high fees and failed transactions that have plagued users of Ethereum’s Uniswap.

Projects related to NFTs or the metaverse are also moving over to Polygon due to high minting and transfer costs on Ethereum.

Polygon’s MATIC token is currently the 14th largest cryptocurrency with a market cap of $16.2 billion, according to data from CoinGecko.

MATIC is still trading below its all-time high price of $2.62 in May.

All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Dogecoin is a security and will be regulated, says Jim Cramer

The host of Mad Money, a CNBC show, issued a warning to Dogecoin holders. Cramer believes that Dogecoin is a security and it will be regulated soon. Analysts believe that the Dogecoin price could start an uptrend. 

More Dogecoin News

Shiba Inu price set to crash by 70% as critical support weakens

Shiba Inu (SHIB) price continues to be controlled by bears after the dead-cat bounce in stock markets yesterday evening. With the Nasdaq closing sharply lower, giving up earlier gains, cryptocurrencies are being dragged into a selloff on its coattails, and bearish headwinds  persist.

More Shiba Inu News

Chainlink price at make-or-break point while global markets tumble

Chainlink price has seen a massive collapse over the past five days, resulting in a retest of a crucial barrier. This downswing is not localized to the crypto markets and seems to originate on Wall Street after the Fed tightens the interest rates.

More Chainlink News

Bitcoin Weekly Forecast: BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

More Bitcoin News

Bitcoin: BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read full analysis