Polymarket and Web3 Apps Drive Stablecoin Growth on Polygon

Stablecoin usage on Polygon remains high with retail customers. This type of action has kept the chain viable. It is one of the oldest L2 chains, supporting both its legacy chain and the new Polygon ZK EVM.  

Polygon is one of the principal chains for stablecoin transfers. The L2 is considered a legacy device, owing primarily to its app and game library. VISA's stablecoin statistics show that it remains a strong venue for stablecoin users.

However, the current migration to newer L2 chains has had an impact on the original Polygon chain's reputation as an established Web3 tool. Stablecoin balances have fluctuated, with TRON, Solana, and BNB Smart Chain seeing the most activity.

L2 chains lagged, primarily serving specialized markets for DeFi exchanges or loans. In terms of activity, Ethereum lags behind USDT and other stablecoins. Liquidity on L2 is frequently compartmentalized; therefore, stablecoins on Polygon are unlikely to be withdrawn from other networks after bridging.

Notably, most exchanges and brokerages accept Polygon stablecoins.

The network also receives a large amount of bridged ETH, worth $1.27 billion. It remains one of the top five most active chains in terms of inflows and outflows, alongside Ethereum.

Stablecoin Activity Continues to Thrive on Polygon

For Polygon, it was an opportunity to shine as the most active L2 for payments, trading, and opening positions on Polymarket. Over the last year, the network has processed over 82 million organic transactions, with an average of 4.5 million monthly active users. The chain supported almost 19 million USDT sender wallets and approximately 14.4 million USDC addresses.

These addresses combined are nearly equal to the number of stablecoin wallets interacting on Ethereum and outnumber those on Solana. More than 25 million wallets on the network receive USDT, while 17.3 million are signed up to receive USDC. The balance shows that certain users may receive remittances or payments.

Polymarket was a substantial contributor to USDC adoption, albeit with a lesser number of retail wallets. According to a VISA study, Polymarket also handles retail traffic and serves as a payment gateway. Polymarket's dominance reflects the longer history of some of the big Web3 chains. Despite Aave's request to exit the chain, the network's POS retains the majority of its top DeFi and DEX apps.

The majority of stablecoins on Polygon are still on the legacy proof-of-stake network. That chain contains $1.76 billion in stablecoin liquidity, with USDT accounting for around $426 million. In comparison, Polygon ZK EVM has only $2.1 million in stablecoin liquidity since the chain is still fighting with other new L2.

Polygon also carries USDC, which is used on some of its DeFi protocols. For the main proof-of-stake chain, Aave and Polymarket make up the busiest apps with the largest value locked. The network also carries versions of DEX apps and liquidity protocols. The chain hosts some of the RWA tokens by BBlackRock'sBUIDL project, as well as Franklin Templeton's assets. 

Polygon Aims for Revival with AI-Powered Initiatives

Polygon hopes to reclaim its relevance after losing traction with play-to-earn games and NFTs. The chain still lags behind newer platforms that emerged following the 2022 bear market. It still sees some activity from its top games, such as Sunflower Land, Galxe, and Planet IX.

The next step for Polygon is to host an AI agent launchpad. It announced that it will now host AI16Z's ELIZA framework.

In addition to integrating ELIZA, Polygon announced the start of its Season 2 community grant. This time, the supported projects will have two AI tracks as their major theme, with supplementary incentives for AI infrastructure.

Polygon will accept applications until April 15 and distribute 35 million POL tokens provided by the top ten ecosystem donors. The monies will be used for new or transitioning projects.

Despite its tremendous liquidity and innovative use cases, the native POL coin continues to demonstrate weakness. POL was trading at $0.45, close to its previous month's low. POL is a utility token used to pay activity fees, while the network also accepts stablecoins.