Has Polygon Found the Key to Success with Polymarket?

Polygon, a prominent Layer 2 blockchain network, may have struck a key to broader success through Polymarket, a decentralized prediction marketplace. This platform has garnered significant user interest, with participants placing bets on events ranging from the U.S. presidential election to the conclusion of a popular HBO documentary. However, despite Polymarket’s success, Polygon’s native tokens have struggled, with values falling by 65% this year. Many wonder if Polymarket’s triumph could benefit Polygon token holders amid this challenging period.

Polymarket's Rapid Rise

Polymarket has gained remarkable traction among mainstream users, allowing them to wager on upcoming events like the U.S. presidential election. Users have collectively staked approximately $2.4 billion on high-profile predictions, such as whether Donald Trump or Kamala Harris will win November’s election. Another popular topic involves speculation on the identity of Bitcoin’s creator, Satoshi Nakamoto, as highlighted in a recent HBO documentary.

Polymarket’s Value Lies in Attention, Not Revenue

Unlike other applications, Polymarket’s primary value to the Polygon network isn’t based on revenue but on attention and engagement. Built on the Polygon PoS blockchain, Polymarket represents one of the network’s first major organic successes. This is significant for a team previously known for its paid collaborations with brands like Starbucks to boost network adoption. Despite Polymarket’s popularity, financial gains remain minimal, with Token Terminal data from October 23 indicating only around $27,000 in transaction fees generated for Polygon PoS in 2024.

Affordable Fees and Network Load Management

Transaction fees on the Polygon PoS chain remain highly affordable, with average fees recorded at just $0.007 as of October 23. This low-cost structure splits transaction fees into a base fee and a priority fee. The base fee, which is burned rather than paid to validators, theoretically benefits token holders by reducing supply. During high network traffic, base fees increase to control congestion, while the priority fee incentivizes validators to expedite transactions.

Although Polymarket users generate substantial transaction volume, it still pales compared to high-intensity applications like decentralized exchanges (DEXs). So far, Polymarket accounts for about 5.2% of Polygon PoS chain transactions this month, while Chainlink contributes 10.38%, and USDT stablecoin transfers make up 4.89%.

Conclusion

On October 23, Polymarket accounted for roughly 8% of the Polygon PoS chain’s gas usage, according to PolygonScan blockchain research. Although this is impressive, it might not fully capture Polygon’s goals. The team continues to pursue mainstream adoption, investing millions in partnerships with companies like Starbucks and Meta to push Web3 technology to broader audiences. Though limited success has followed, Polymarket’s mainstream appeal may be the breakthrough Polygon needs to reach the masses. With a highly popular application operating smoothly on the Polygon PoS chain, the network might finally achieve mass adoption.