The leader of the prediction market, Polymarket, has announced its migration from Polygon and the launch of a Layer2 network on Ethereum named POLY. This “separation” reflects a re-evaluation of the underlying network after the rise of the Application Layer, as well as a microcosm of the structural changes in the encryption industry. (Previous summary: Betting on “OpenAI releasing a new model” on Polymarket, the market questions the existence of insider arbitrage) (Background information: Polymarket announces its return to the United States: approved by the CFTC, operating as a “designated contract market” intermediary trading platform)

Table of Contents

• An unexpected “breakup”
• Explicit and implicit economic contributions
• Why now? The answer isn't hard to guess.

A dynamic regarding the prediction market leader Polymarket has sparked widespread attention in the market: Polymarket team member Mustafa confirmed within the Discord community that Polymarket plans to migrate from Polygon and launch an Ethereum Layer2 network named POLY, which is the current top priority of the project.

A breakup that was not unexpected.

It is not surprising that Polymarket chose to jump out of Polygon, one is a popular application layer representative, while the other is a gradually declining old layer, and the market heat and value expectations between the two are 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 imposed limitations on the former.

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

In terms of products, in addition to seeking a more stable operating environment, building a Layer 2 network can help Polymarket customize underlying features based on its platform needs, thus adapting more flexibly to future upgrades and iterations of the platform.

And more importantly, its significance is reflected in the economic aspect. Building its own network means that Polymarket can consolidate the economic activities and peripheral services derived from its platform into its own system, preventing relevant 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, the explosive popularity of Polymarket has brought objective direct economic contributions to Polygon. Data compiled by analyst dash on Dune shows the historical data:

· The number of active users on Polymarket this month is 419,309, with a total historical user count of 1,766,193.

· The total number of transactions this month is 19.63 million, and the historical total number of transactions is 115 million;

· The total trading volume for this month is 1.538 billion USD, and the historical total trading volume is 14.3 billion USD.

As for how to evaluate the contribution ratio of Polymarket to the Polygon ecosystem, Odaily Planet Daily discovered a rather coincidental ratio while organizing the data of the two.

· First, regarding the capital accumulation, Defillama data shows that the current total position value of Polymarket across the platform is approximately $326 million, accounting for about a quarter of the total locked value of $1.19 billion on the Polygon network;

· Secondly, there is the gas consumption situation. Coin Metrics reported last October that transactions related to Polymarket are expected to consume 25% of the gas of the entire Polygon network;

· Considering that the data is somewhat outdated, we also checked the recent changes. Statistics drawn by data analyst petertherock on Dune show that the total trades related to Polymarket in November consumed about $216,000 in gas, while Token Terminal shows that the total gas consumption on the Polygon network for that month was about $939,000, with a similar proportion of nearly one quarter (about 23%).

While there may indeed be coincidences caused by statistical criteria and time windows, the cross-dimensional similar results can also serve as a reference for estimating the economic significance of Polymarket for Polygon to a certain extent.

In addition to quantifiable indicators such as active users, deposited funds, transaction volume, and gas contributions, the economic significance of Polymarket to Polygon is also reflected in a series of less directly measurable, yet equally real, implicit contributions.

First is the activation of liquidity for stablecoins. All trades on Polymarket are settled in USDC, and its high-frequency and continuous trading behavior has objectively significantly increased the demand for USDC and its usage scenarios on the Polygon network; second is the additional behavioral value of retaining users. Aside from 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 can be quantified with specific data, yet they constitute the “real demand” that the underlying network values most and is also the most scarce.

Why now? The answer is not hard to guess.

In fact, based solely on user scale, data performance, and market presence, Polymarket has completely established the confidence to stand on its own. This is no longer a question of “whether to go” but rather a question of “when to go.”

The reason for choosing to start the migration at this point in time 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, and the cost and complexity of subsequent underlying migrations will significantly increase; on the other hand, upgrading from a “single application” to a “application + underlying” full-stack system inherently means a change in valuation logic, and building a Layer2 undoubtedly opens up a higher ceiling for Polymarket in terms of narrative and capital.

In summary, Polymarket's departure from Polygon is not merely a simple underlying migration, but a microcosm of the structural changes in the encryption industry. When top applications begin to possess the ability to independently support users, traffic, and economic activities, if the underlying network cannot provide additional value, it will inevitably be “backstabbed.”

Nothing more, just pursuing profit.