PrimeXBT analyst Kim Chua: Undervalued Polygon (MATIC) is expected to trade close to $ 3,00 now

PrimeXBT analyst Kim Chua: Undervalued Polygon (MATIC) is expected to trade close to $ 3,00 now - primexbt2 1

Altcoin's performance has increased recently, with many taking turns to significantly increase based on milestones, development updates, or an increase in user numbers. While many currencies such as ADA, SOL, XRP, DOGE have made headlines due to their phenomenal price increases, an old treasure seems to be lagging behind but should bounce into an explosive run once investors realize how undervalued it is. This token is MATIC, the native token of the Layer-2 protocol, Polygon Network.

In its heyday in May, MATIC climbed to $ 2,80 ATH after famed investor Mark Cuban said he bought MATIC as an investment behind its low transaction cost, increased total value locked (TVL ) and a large natural network effect made possible by leveraging ETH, the most widely used smart contract blockchain.

Although Polygon's TVL fell from its peak due to the market-wide correction from May to July, its valuation appears to be overcompensated against its peers in the smart contract category.

While TVL may not necessarily be the best metric for determining the value of a network, it is one of the most widely used adoption and sentiment indicators today.
Although the price has recently rebounded due to the positive news flow, Polygon is still one of the most underrated protocols compared to its other peers in the smart contract category.

According to DeFi Llama's TVL data, Polygon's current TVL is around $ 5,3 billion, while its market cap is around $ 10 billion, which gives it a valuation multiple of less than 2 times. Other protocols of the same category are exchanged at much higher multiples.

To illustrate, consider ETH and Binance Smart Chain, two of the most commonly used smart contract protocols. ETH has a TVL of $ 113 billion and is valued at around $ 380 billion with a multiple of 3,4x, while Binance Smart Chain has a TVL of $ 18 billion and trades around $ 77 billion with a multiple of 4,3. , XNUMXx. Other newer and smaller protocols have even higher TVL rating multiples and therefore will not be included in this comparison.

So, conservatively, if we were to take the ETH valuation multiple as a guide, Polygon would have to be valued at around 3,4x TVL, which would give it a valuation of $ 180 billion. With an ongoing offering of 6,46 billion MATIC, this would result in a price of approximately $ 2,78 for each MATIC token. Following the Binance Smart Chain 4,3x multiple would result in a price of $ 3,53 per MATIC.

In other words, trading between $ 2,78 and $ 3,53 would put MATIC on par with its peers, implying that MATIC's current fair value could be at least $ 2,78, over 90% valuation. where it is currently trading. This makes MATIC look very underrated and a fantastic candidate for a catch-up move.

While some may argue that the growth of TVL for MATIC has been stagnant over the past couple of months, while that of other protocols has seen strong increases, the main point to note is that while it is not growing at the rate of other newer protocols, MATIC has not. however saw an unusual drop in its TVL, still remaining the protocol with the third largest TVL, only behind ETH and Binance Smart Chain, with TVL constantly fluctuating between $ 4,5 billion and $ 6,5 billion. The MATIC price will eventually have to reflect this position.

Plus, there's a hive of value-added activities taking place within the MATIC ecosystem, with the Polygon team busy aligning collaborations, linkages, and even mergers. Just two weeks ago, the team announced the first token exchange deal, buying competitor Hermez Network in a $ 250 million deal.

The positive news doesn't stop there as another exciting development was unveiled Thursday, with the team disclosing that it will use $ 100 million from its DeFiForAll fund, launched in April to build an autonomous decentralized organization (DAO) to encourage DeFi interoperability and adoption. Several big names in the DeFi industry have been called upon to establish it together.

They include chainlink orcal blockchain, DeFi Aave lending platform and popular DEX such as SushiSwap and QuickSwap, all currently running or existing Polygon partners.

The team believes this new initiative can bridge the currently disparate DeFi platforms by offering shared services to create connections between DeFi platforms, build ramps for encrypted institutions and wallets, and much more. Ultimately, the goal of this project is to attract 100 million users to the MATIC ecosystem. This will also allow the MATIC community to have a say in its continued development of DeFi, which will certainly further accelerate adoption and put TVL in Polygon back on its previous skyrocketing trajectory in the future.

With a new DAO in place, a new governance token will certainly be available and MATIC holders will be pleased to hear that DAO will distribute their governance token to MATIC holders via an airdrop in the near future. Although the details have not been finalized yet, this gives market participants a very compelling reason to buy MATIC and hodl for the airdrop, which is one of the reasons why the price of MATIC has risen in recent days, coming out of the wrong head. and neckline of the shoulder training below $ 1,50 and after, its price is even higher.

Despite having risen quite significantly in the past few days, the price of MATIC is still undervalued based on my comparison of relative point-to-point value and I anticipate a trend from its fair value of $ 2,78 soon, which will also change to be your ATH.

With positive fundamental developments like the new DAO (and in particular the airdrop) as an additional catalyst, I wouldn't be surprised to see MATIC surpass $ 2,78 in the near future, if the current positive sentiment of the market should continue. Even a price of $ 3,53 per token would put MATIC on par with its peers in terms of valuation, which I believe Polygon Network deserves, without even taking into account the extra value the new DAO and its airdrop would provide. So, in my humble opinion, MATIC could also trade above $ 3,53 once the DAO details have been finalized and announced in due course.

About Kim Chua, a market analyst at PrimeXBT:

PrimeXBT analyst Kim Chua: Undervalued Polygon (MATIC) is expected to trade close to $ 3,00 now - kim chua

Kim Chua is an institutional trading specialist with a successful track record spanning major banks including Deutsche Bank, China Merchants Bank, and others. Over time, Chua has launched a hedge fund that has consistently produced triple-digit returns for seven years.

Chua is also an educator at heart who has developed her trading curriculum to pass her knowledge on to a new generation of analysts.

Kim Chua closely follows traditional and cryptocurrency markets and is eager to find future investment and trading opportunities as the two very different asset classes begin to converge.