📝 Editor’s Note: Setting the Scene

Welcome to the latest edition of our Ecosystem Mega Issue Series – where we showcase the overall health & growth of emerging ecosystems with data-driven, onchain coverage.

Today we’re covering Polygon —a network well-known in crypto—but one that many may not know with the degree of clarity that onchain data allows. Launched on mainnet in 2017, Polygon protocols have evolved tremendously as they endured three cycles to remain a technical pioneer in the space. There are multiple layers in the Polygon stack that supports maturing DeFi, gaming, DePIN, and mainstream consumer ecosystems, as well as key technologies geared to solve the deep-rooted fragmentation of the web3 space:

• Polygon PoS: An EVM-compatible, proof-of-stake Layer 2 that is the primary chain for dApp builders and users in the Polygon ecosystem.
• Polygon zkEVM: An EVM-compatible zero-knowledge Layer 2 aimed at facilitating lower cost, higher throughput, and secure transactions.
• Polygon CDK: The Chain Development Kit (CDK) enables developers to build their own custom-fitted zero-knowledge-powered Layer 2.
• AggLayer: Aims to help solve blockchain fragmentation by letting any sovereign L1/L2 connect to a network and securely share liquidity, users, and state.

With that, let's check the chain and bring you the data-driven story behind Polygon and its ecosystem!

– ON Editorial Team

• Polygon is averaging 660k Daily Active Addresses (DAAs) and 3M Daily Transactions over the 1st 10 days of September. On Sept. 4, the MATIC ➡ POL migration took place — users upgraded over 66% of MATIC into POL within 6 days. In place of MATIC, POL introduces the concept of a 'hyperproductive token', where it can be used to provide valuable services to any chain in the Polygon network, including the AggLayer itself.

• Polygon's stablecoin market cap had almost doubled from $1.1B to $2.1B within 10 months. This is largely due to increases in both USDC and USDT market cap. In particular, Polygon's USDT market cap doubled from $473M to $945M in the 10 month span.

• Polygon has facilitated over $7.8B of NFT sales volume through 28M trades. At $1.3B and $1.2B in July and August, their last two months worth of NFT sales volume were also at all-time high for the year 2024.

• Polygon has attracted $2.8B of inflows to its chain year-to-date, with 92% ($2.57M) coming from Ethereum mainnet, 1.77% from Arbitrum ($49.34M), and 1.36% ($37.79M) from Solana. The chain experienced $2.5B in outflows which bring year-to-date net inflows to Polygon to +$300M. These net positive inflows over an extended period of time are a strong indicator of real demand for the services in the Polygon ecosystem.

• Polygon is a major home for infrastructure projects like DePIN and AI. Its DePIN landscape hosts 19 projects across various categories, accounting for a market cap of $432M. The DePIN sector on Polygon shows considerable diversity, encompassing 7 projects in the sensor space, 3 in wireless, and 3 in energy, among others. DePIN transactions have also increased by over 500% from May 2023 to May 2024.

• One key infrastructure on Polygon PoS is Fox Verify, a search engine designed to allow users to authenticate ownership of content on the internet. Fox currently has over 670K pieces of content stored on its protocol, with over 1.1M uniform resource identifier (URI) updates made so far.

• Immutable zkEVM, a dedicated gaming blockchain powered by Polygon technology, is a key piece of infrastructure in the Web3 gaming ecosystem. Since its launch, it has attracted 6.8M active wallets that have conducted a total of 73M transactions. Its Total Value Locked (TVL) has risen to $14.3M, representing a 178% increase over the past 90 days

💡 Polygon PoS at a Glance

With more than 2M weekly active addresses, 20M weekly transactions, and $887M TVL, Polygon PoS (proof-of-stake) chain remains the premier destination for builders and users in the Polygon ecosystem.

Polygon PoS is also the home to many of the industries most utilized applications, spanning DePIN (DIMO), gaming (Anichess), entertainment (Fox Verify, Courtyard), prediction markets (Polymarket, Azuro) – one of the industry's few mainstream breakout use cases of the year – which we'll be exploring below.

This past week also marked the migration of the Polygon PoS native token from MATIC to POL. Since this event began on Sept 4, over 66.8% of MATIC has been migrated.

• Polymarket is a decentralized betting platform on Polygon for real-world events. Polymarket's trading volume catapulted to $859M in July and August, a 44x leap from pre-2024 averages. As political tensions simmer and crypto milestones loom, users are flocking to venue for betting — Polymarket's TVL in August shattered the $100M ceiling, climbing to $103.9M by Aug. 22. That's a $32M surge in just 12 days. Polymarket's TVL makes up 83% of the overall prediction markets TVL.

• The "Presidential Election Winner 2024" market reigns supreme, drawing $84.1M in August alone while amassing an eye-popping $606.10M in total bets. Clearly, politics is the name of the game in 2024's prediction markets with both recent and long-term data highlighting the domain’s popularity among bettors.

• Polymarket's user base has grown exponentially in 2024. New user acquisition surged from 646 in the first week of January to 5,200 in mid-August. The total user base expanded from 42,445 to 128,393 in just over 7 months — a 202% increase. While the most popular, Polymarket is only one of many emerging prediction markets running on Polygon PoS.

• Courtyard is an onchain collectible trading platform. Daily transactions surged to over 3,000 by mid-2024, with a peak of 9,509 on Aug. 7. This exponential growth can be found from December 2023 onwards, with minted NFTs increasing from about 2.7K monthly to over 30K by July. Pokémon cards dominate trading as August alone 33K sales worth $1.6M happened in August alone, bringing the cumulative Pokémon card sales to over $6.1M.

• Courtyard's cumulative user base is now over 6,200. More notably, the platform has attracted 14,601 unique minters (originators) as of the latest data. This substantial growth in both overall users and content creators demonstrates Courtyard's strong appeal to both collectors and artists.

• With Pokémon accounting for 71% of traded assets, the collectible “pocket monsters” dominate Courtyard's market. While Pokémon cards lead, the platform offers basketball collectibles along with other sports. Secondary market activity has reached up to $80,000 on peak days, suggesting increasing liquidity.

• Anichess, a chess-based strategy game blending traditional gameplay with magical elements, has 283.8k total users with cyclical growth patterns. The platform had a 700% increase in weekly active wallets, reaching over 120K in Q3 2024 with a 5.6% new user rate and a 3.2% daily active user ratio. This was, alongside transaction spikes of 5-8x above baseline. This volatility, coupled with a 28-fold increase in daily trading volume from $50 to $1.4K, suggests a game design that drives intense periodic engagement.

• Anichess shows a diverse user base with high engagement: Out of 484K unique holders, 22.7% of wallets hold either 20+ NFTs, 5.9% of wallets hold 11 through 20, and 5.4% hold 7 through 10. Interestingly, 22% of holders own exactly 3 Anichess NFTs. This distribution indicates power users and newcomers, with periodic catalysts driving mass participation.

• Anichess maintains growth despite volatile transaction costs: Despite fee spikes, the platform grew to 283.8k total users with a 5.59% new user rate and 3.189% daily active user ratio. This suggests a value proposition stronger than network costs, potentially due to its unique gameplay mechanics.

• DIMO, an open connected vehicle platform leveraging data for driver benefits, has attracted over 20 vehicle brands. Tesla leads with a 20.2% market share, having recently enabled direct integration as the first automaker to officially support DIMO. Following Tesla are Kia (15.6%), Chevrolet (10.0%), and Ford (9.7%). This broad appeal across automotive segments underscores DIMO's potential for widespread adoption and valuable cross-brand data aggregation.

• Manufacturer earnings vary. Tesla leads the electric vehicle market with 22.7K minted vehicles and $17.6M in earnings. Luxury brands like Porsche show high earnings on low volume ($2.1K/vehicle), while mass-market brands like Kia (17.5K units, $115/vehicle) prioritize volume over per-unit profit.

• DIMO's rewards highlight Tesla's dominance: a peak weekly issuance of 353K tokens to 4.1K users. Economy brands like Kia and Chevrolet perform well, while niche & luxury brands have consistent participation. This pattern indicates a growing ecosystem across many vehicle segments within the platform.

• Polygon has established itself as the second-largest blockchain for tokenized RWAs, with its 23 assets trailing only Ethereum's 62. This positions Polygon as a significant player in the  space — the platform’s RWAs have a total market capitalization of $531.58M.

• There are clear industry preferences in the RWA ecosystem: real estate dominates at 56.9% of tokenized value, followed by private funds (30%), commodities (7.3%), and government securities (5.7%). Notable tokens include HLEOVUS ($6M) in private funds, and BENJI ($2.14M) in government securities.

• At the protocol level, Tangible RWA has significant influence with a TVL of $41M and 218 tokenized properties, representing 43% of Polygon's total RWA value. This is followed by Spiko with $36M and Klima DAO with $10M, further illustrating the diverse ecosystem developing on the Polygon blockchain.

💡AggLayer at a Glance:

Polygon is becoming an aggregated blockchain network via the AggLayer, which is an interoperability solution that connects sovereign chains together in a web of unified liquidity and shared state. The solution aims to connect multiple chains through zero-knowledge security for more scalable cross-chain interoperability, including Polygon's PoS chain, which will likely connect to the AggLayer, bringing its TVL and users in direct interoperability with every other connected chain. 

Right now, the AggLayer is in build mode with a recent cross-chain demo showing a working version of what the Polygon Labs team and other core AggLayer contributors plan to speed up in the coming months: chain-to-chain communication. 

Teams from across the industry are working to create a positive-sum web of connected chains. They include contributions by Espresso Systems, OKX, Irreducible, Gateway, Succinct Labs, Nodekit, Movement Labs, Union, and more.

Below we explore some of the data behind popular chains building on the Polygon AggLayer.

• Ronin (an EVM-compatible L1 focused on supporting the gaming sector) is using the Polygon CDK to build a zkEVM L2 that will connect to the AggLayer which you can explore more on here. Ronin is the dedicated gaming blockchain, designed to be the best place to build, grow, and monetize web3 games. Consistently Top 5 DAU in the Layer 1 category, percentage share has grown from 0.6% to 22% due to creative designs for onchain mechanisms like daily check-ins for reward boosts. Ronin is focused on quality addresses that spend onchain. While we have seen 2-3x growth since 2023, offchain spending is not captured — Pixels has reported >100k active VIPs who spend $10 per month.

• Mavis Market is the premier NFT marketplace on Ronin that facilitates primary sales and secondary peer-to-peer trading. Mavis Market has grown 16x, with peak monthly volume from $368k in 2023 to $6.15M in 2024. The NFT Launchpad has seen 5 near-instant sellouts with over 3M $RON raised.

• Lumiterra, a multiplayer, open-world survival crafting game, had a  20-Day Closed Beta which generated 810K $RON in Marketplace Volume from items crucial to player progression. Lumiterra is the latest testament to the Ronin Effect - Ronin’s curation and amplification of high quality games to the community is a proven formula to drive massive growth.

• Movement is building a parallelized Move-EVM Layer 2 solution that will connect to Polygon's AggLayer. Specifically, the integration will connect MoveVM rollups into the AggLayer ecosystem, expanding its capabilities and reach.

• Within four weeks of Parthenon, Movement Labs’ incentivized testnet program, the network processed over 100M transactions and grown to 3.5M wallets. This demonstrates scalability as well as the effective community engagement.

• Some of Movement’s flagship projects, like Echelon, Meridian, and Routex are also growing. Echelon reached 943.9K weekly transactions and 923K weekly deposits, while Meridian facilitated 869K swaps. Routex recorded 12K weekly transactions as well.