Polymarket announces the launch of its own L2, is Polygon's ace gone?

Original Title: The Economic Calculation Behind Polymarket's Departure from Polygon

Original Author: Azuma, Odaily Planet Daily

On December 22, a development regarding the leading prediction market Polymarket drew widespread attention in the market—Polymarket team member Mustafa confirmed in the Discord community that Polymarket plans to migrate from Polygon and launch an Ethereum Layer 2 network called POLY, which is currently the project's top priority.

An Unexpected "Breakup"

Polymarket's decision to leave Polygon is not surprising; one is a hot application layer representative, while the other is a gradually declining old layer, and the market enthusiasm and value expectations between the two have always been somewhat mismatched. As Polymarket gradually grows into a new giant, Polygon's unstable network performance (the latest failure occurred on December 18) and relatively weak ecosystem have objectively restricted the former.

For Polymarket, building its own portal means a win-win choice in both product and economic dimensions.

In terms of product, besides seeking a more stable operating environment, building its own Layer 2 network can help Polymarket customize the underlying features according to its platform needs, allowing for more flexible adaptation to future upgrades and iterations of the platform.

The more significant meaning lies in the economic aspect. Building its own network means Polymarket can consolidate the economic activities and surrounding services derived from its platform into its own system, preventing related value from spilling over to external networks and instead gradually solidifying into its own systemic advantages.

Explicit and Implicit Economic Contributions

As an application layer, Polymarket's explosive growth has brought objective direct economic contributions to Polygon. Data compiled by analyst dash on Dune shows:

• Polymarket's active users this month are 419,309, with a historical total of 1,766,193 users;
• The total number of transactions this month is 19.63 million, with a historical total of 115 million transactions;
• The total transaction volume this month is $1.538 billion, with a historical total transaction volume of $14.3 billion.

As for how to assess Polymarket's contribution to the economic ecosystem of Polygon, Odaily Planet Daily found a rather coincidental ratio while compiling data for both.

• First, regarding the capital locked, Defillama data shows that the total value of positions across the Polymarket platform is approximately $326 million, accounting for about a quarter of Polygon's total locked value of $1.19 billion;
• Secondly, regarding gas consumption, Coin Metrics reported last October that transactions related to Polymarket were expected to consume 25% of the gas on the entire Polygon network;
• Considering that this data is somewhat dated, we checked recent changes, and data analyst petertherock's statistics on Dune show that transactions related to Polymarket consumed approximately $216,000 in gas in November, while Token Terminal reported that the total gas consumption on the Polygon network that month was about $939,000, with a similar proportion of nearly a quarter (about 23%).

While there may be coincidences due to statistical criteria and time windows, the cross-dimensional similar results can also serve as a reference for estimating Polymarket's economic significance to Polygon.

In addition to quantifiable indicators such as active users, locked capital, transaction volume, and gas contributions, Polymarket's economic significance to Polygon also lies in a series of more difficult-to-measure yet equally real implicit contributions.

First is the activation of stablecoin liquidity. All transactions on Polymarket are settled in USDC, and its high-frequency, continuous trading behavior has significantly increased the demand for circulation and use cases of USDC on the Polygon network; second is the ancillary behavioral value of retained users. Beyond the prediction market itself, these users may also turn to use other products in the Polygon ecosystem, such as DeFi, for convenience, thereby enhancing the overall ecological value of the Polygon network. These contributions are difficult to quantify with specific data but constitute the "real demand" that the underlying network values most and is most scarce.

Why Now? The Answer is Not Hard to Guess

In fact, based solely on user scale, data performance, and market voice, Polymarket has fully established the confidence to stand on its own. This is no longer a question of "whether to leave," but rather "when to leave."

The choice to begin the migration at this moment **is primarily due to the approaching Polymarket TGE. On one hand, once Polymarket completes its token issuance, its governance structure, incentive system, and economic model will become relatively fixed, making subsequent underlying migrations significantly more costly and complex; on the other hand, upgrading from a "single application" to a "full-stack system of application + underlying" inherently means a change in valuation logic, and *building its own Layer 2 undoubtedly opens a higher ceiling for Polymarket in terms of narrative and capital.*

In summary, Polymarket's departure from Polygon is fundamentally not just a simple underlying migration but a microcosm of structural changes in the crypto industry. When top applications begin to possess the ability to independently carry users, traffic, and economic activities, if the underlying network cannot provide additional value, it will inevitably be "stabbed in the back."

Nothing more, just profit-seeking.

Recommended Reading:

In-Depth Insights: How to Build a GTM Strategy for Crypto Products Using Distribution Advantages

The Hidden Concerns Behind Web3 Super Unicorn Phantom

Why Doesn't Asia's Largest Bitcoin Treasury Company Metaplanet Buy the Dip?