Layer-two (L2) solutions for the Ethereum network have become a popular topic of give-and-take and speculation on their associated tokens backed the massive rally seen in many of the protocols this year. The parabolic growth of the decentralized finance (DeFi) and nonfungible token (NFT) sectors besides led to a surge in the cost of conveying out simple transfers and this prompted developers and investors to migrate to L2-supportive platforms.

One L2 solution that saw its token price rising to new highs earlier in the year and now looks poised to make some other breakout higher is Polygon (MATIC), a proof-of-stake blockchain protocol that aggregates scalable solutions on Ethereum to support a multi-chain ecosystem.

Data from Cointelegraph Markets Pro and TradingView shows that MATIC hit a depression at $1.01 on Sept. 21, and over the past few months, the price has been in a steady uptrend, bringing the altcoin in a higher place the $two marker on Dec. 1.

MATIC/USDT 1-day nautical chart. Source: TradingView

Polygon'due south ecosystem is expanding and proof of this can exist seen in the increase in protocol launches, cross-chain migrations, the launch of a Polygon-focused exchange-traded production (ETP) and a steady uptick in user activity.

Ecosystem expansion

One of the biggest drivers of MATIC price and on-concatenation activeness has been the addition of new protocols to the Polygon network throproject launches and cantankerous-concatenation migrations.

Most recently, IDEX decentralized commutation appear that information technology would launching v3 of its exchange on the Polygon network, making it the start hybrid liquidity DEX on Polygon.

The Polygon network has seen projection launches from NFT projects like the OpenBiSea NFT marketplace and gaming/DeFi platforms like Rainmaker Games, Harvest Finance and Jarvis Network.

Currently, the Uniswap community is in the process of voting on whether to add together Polygon support for Uniswap v3 and later on a bulk yes Phase one vote on Nov. 25, the process has shifted into Phase ii.

Ascent institutional support

Another reason for the bullish toll action for Polygon has been increased interest from institutional investors. Several exchange-traded products (ETPs) for Polygon have been listed in recent months, including the Osprey Polygon Trust in September and the 21Shares Polygon ETP in November.

Polygon is also included on the list of avails existence explored by the Grayscale Investments as a potential Trust candidate.

The network has too benefited from a $20 million investment fund launched by Wintermute, a digital asset market maker focused on helping to bootstrap the development of decentralized applications on Polygon.

Currently, the Polygon network is receiving increased attending equally it prepares to host a ZK Summit on Dec. 9 where developers will hash out the "current state and futurity of zk-STARKs and applications of nix-noesis proofs."

Related: IDEX to launch hybrid liquidity decentralized exchange on Polygon

Increase in active users and wallets

A tertiary reason for the bullish price activity seen in MATIC has been the steady increment of users on the network equally evidenced by the increase in wallet addresses holding a balance.

Polygon addresses with a balance vs. MATIC cost. Source: Intotheblock

Equally shown in the graph above, the number of Polygon wallets holding a remainder has steadily increased throughout 2022 and is currently at an all-time high of 282,760.

Evidence of the increased action can also exist found in the data for total revenue generated from fees on the network, which has been steadily increasing over the second one-half of 2022.

Polygon price vs. total revenue. Source: Token Terminal

As new protocols continue to list on the Polygon network, these stats are likely to rise if new users continue to use the platform to escape the loftier fees seen on the Ethereum network.

VORTECS™ data from Cointelegraph Markets Pro began to find a bullish outlook for MATIC on October. xv, prior to the recent price ascent.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparing of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activeness.

VORTECS™ Score (green) vs. MATIC cost. Source: Cointelegraph Markets Pro

As seen in the nautical chart to a higher place, the VORTECS™ Score for MATIC spiked into the greenish zone on October. 15 and reached a high of 94 around 48 hours before the price began to increase by 57% over the adjacent six weeks.

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