Polymarket announces its own L2, does Polygon lose its advantage?

Original Title: Polymarket’s Escape from Polygon: The Economic Account Behind the Move

Original Author: Azuma, Odaily Planet Daily

On December 22, a development regarding the leading prediction market Polymarket drew widespread market attention—Mustafa, a team member of Polymarket, confirmed within the Discord community that Polymarket plans to migrate from Polygon and launch an Ethereum Layer2 network called POLY, which is currently the project’s top priority.

An Unsurprising “Breakup”

Polymarket’s decision to step away from Polygon is not unexpected. One is a popular application-layer representative, while the other is a declining underlying layer; 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 most recent outage occurred on December 18) and its relatively weak ecosystem have objectively become limitations for the former.

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

In terms of product, besides seeking a more stable operating environment, building a self-managed Layer2 network can help Polymarket customize underlying features based on its platform needs, allowing for more flexible adaptation to future upgrades and iterations.

More importantly, this move has significant economic implications. Building its own network means Polymarket can consolidate the economic activities and peripheral services generated around its platform into its own system, preventing related value from spilling over into external networks, and gradually accumulating a systemic advantage.

Explicit and Implicit Economic Contributions

As an application layer, Polymarket’s explosive popularity once brought tangible direct economic contributions to Polygon. Data analyst dash compiled historical data from Dune showing:

· Polymarket’s active users this month: 419,309; total users historically: 1,766,193;

· Total transactions this month: 19.63 million; total transactions historically: 115 million;

· Total transaction volume this month: $1.538 billion; total transaction volume historically: $14.3 billion.

Regarding how to evaluate Polymarket’s contribution to Polygon’s ecosystem economy, Odaily Planet Daily found an interesting coincidence in the data comparison.

· First, in terms of capital locked, Defillama data shows that Polymarket’s total platform position is approximately $326 million, about a quarter of Polygon’s total locked value of $1.19 billion;

· Second, in terms of gas consumption, Coin Metrics estimated last October that transactions related to Polymarket consumed about 25% of Polygon’s total gas;

· Considering that this data is somewhat outdated, we checked recent changes. Data analyst petertherock’s statistics on Dune show that in November, transactions related to Polymarket consumed about $216,000 worth of gas, while Token Terminal’s data indicates that Polygon’s total gas consumption for that month was approximately $939,000, also close to a quarter (about 23%).

While there may be some coincidence caused by differences in statistical methods and timeframes, the similar results across dimensions can serve as a rough estimate of Polymarket’s economic significance to Polygon.

Beyond quantifiable indicators like active users, capital locked, transaction volume, and gas contribution, Polymarket’s economic significance to Polygon also manifests in a series of more intangible but equally real contributions.

First is the activation of stablecoin liquidity. All Polymarket transactions are settled in USDC, and its high-frequency, continuous trading behavior objectively enhances the circulation demand and usage scenarios of USDC on the Polygon network; second is the value of retained users’ ancillary behaviors. Beyond the prediction markets themselves, these users may also turn to other Polygon-based DeFi products for convenience, thereby increasing the overall ecosystem value of Polygon. These contributions are difficult to quantify with specific data but form the most valued and scarce “real demand” that the underlying network cares about.

Why Now? The Answer Is Not Hard to Guess

In fact, judging solely by user scale, data performance, and market volume, Polymarket already has the confidence to stand alone. This is no longer a question of “whether to move” but “when to move.”

The main reason for choosing to migrate at this moment likely relates to the upcoming 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 layer” inherently involves a change in valuation logic. Building its own Layer2 undoubtedly opens a higher ceiling for Polymarket in terms of narrative and capital.

In summary, Polymarket’s departure from Polygon is not just a simple underlying migration but a microcosm of the structural changes in the crypto industry. When top-tier applications begin to have the capacity to independently host users, traffic, and economic activities, if the underlying network cannot provide additional value, it will inevitably be “backstabbed.”

It’s simply about profit-seeking.

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