In a significant development, Polygon, the leading layer-2 scaling solution for Ethereum, has completed the final unlock of its native token dubbed MATIC.
For beginners, token unlock involves releasing tokens previously locked or restricted from circulation into the market. This activity usually leads to increased trading activities for the token as investors now have the ability to buy or sell it.
96.18% MATIC Now in Circulation
On-chain data shows that on Wednesday, February 21st, 273 million MATIC (valued at approximately $253 million at the time of the transaction) were transferred from the Matic vesting contract to the Matic Foundation address.
This transfer marks the culmination of the token distribution process and brings 96.18% of allocated MATIC tokens into full circulation.
It is important to note that the remaining portion of the circulating supply, roughly 3.82%, is being allocated for staking rewards. Polygon runs a proof-of-stake (POS), which allows users to earn rewards by contributing their MATIC tokens to secure the network. So, not all tokens have entered full circulation despite the final unlock.
Meanwhile, the latest unlock could be followed by increased selling pressure as more MATIC tokens have entered the market and are now freely tradable.
MATIC Performance Post-Unlock
While the MATIC’s price has seen gains in recent weeks, it tanked by nearly 9% post-unlock. This can be attributed to the selling pressure that followed the unlocking activity. However, since then, the token has recovered a small portion of its losses.
MATIC traded at $0.97 at press time, representing a 2.52% increase in the last 24 hours.
Despite this performance, analysts believe there is an underlying bullish momentum in the price of MATIC.
According to crypto analyst Ali Martinez, MATIC shows a promising sign from a long-term perspective and if the token can maintain a close above $0.96 (a key level within a multi-year symmetrical triangle), it could trigger a bull run toward $1.73.
#Polygon shows promising signs from a long-term perspective. The prevailing pattern appears to be a multi-year symmetrical triangle.
If $MATIC can maintain a close above $0.96, it could signal the start of a bull rally, with a potential target of $1.73! pic.twitter.com/qjgn6sN1oV
— Ali (@ali_charts) February 21, 2024
This article was updated to reflect the correct data.
