Polygon Ecosystem Report

Introduction

Founded in 2017, Polygon is one of the original Ethereum scaling chains that has become a major player in the stablecoins and payments space in 2026. In this report, we cover the network’s current health, latest developments, and future plans.

Key Insights

• Year of Upgrades: 2025 and 2026 saw Polygon completing six network upgrades, with its most recent upgrade completed on March 4, 2026. This boosts their network capacity to over 2600 Transactions Per Second (TPS).

• Strategic Movement: Co-founder Sandeep Nailwal was appointed CEO of the Polygon Foundation in June 2025, marking Polygon's evolution toward becoming a payments blockchain. The network’s full commitment was showcased in the recent $250M acquisition of payment rails Coinme and Sequence.

• Payment Metrics: Polygon is the second most active blockchain by USDC addresses, and recently most active blockchain by stablecoin transaction counts. Payment processor volumes also grew massively, quadrupling in 2025.

• Transaction Count and Monthly Active Users (MAUs):  Transactions and MAUs held steady for most of 2025 but have since experienced an activity surge since Q4 2025. Monthly transactions climbed from 116M, reaching an ATH of 204M in February 2026.

• Total Value Locked (TVL): TVL remained strong in 2025, growing 40.1% Year-on-Year, the bulk of the growth is attributed to Polymarket, the market leader in prediction markets and now holds $375M in TVL.

• MATIC-to-POL Migration: Polygon achieved 99% completion of the MATIC-to-POL migration in September 2025, a year after its initial migration announcement.

• Staking Annual Percentage Rate (APR):  Legacy MATIC emissions ended in July 2025, network validators have since transitioned to the new POL reward schedule, which brings down staking APRs to the ranges of 2.5% - 3%.

Latest Developments in the Polygon Ecosystem

Between September 2024 and March 2026, Polygon executed six major technical upgrades and two strategic acquisitions that fundamentally repositioned the network from a general-purpose scaling solution to specialized payments infrastructure. The month of February 2026 saw Polygon vastly increase its network gas limits, raising it from 65M to 110M, allowing the network to reach a maximum capacity of 2,600 TPS.

The pivot was further exemplified when Polygon announced its planned shut down of its zkEVM network in 2026 and named co-founder Sandeep Nailwal as its new CEO of Polygon Foundation as part of its leadership team. Overall, these upgrades and acquisitions culminated in the announcement of Polygon’s new vision, the “Open Money Stack” that seeks to revolutionize and power borderless stablecoin payments.

The Open Money Stack Initiative

The Open Money Stack announcement on January 8, 2026, marked the network’s formal transition from a prominent Ethereum side-chain to a full-stack payments ecosystem. The Open Money Stack is a modular, vertically integrated system designed to be a convenient solution for enterprises, fintechs, and payments apps to build onchain. Historically, fintech firms would have to individually stitch together the various components of an onchain payments platform. This would typically require coordination between wallet SDKs, fiat on/off-ramps, compliance layers and more, involving multiple parties at a time. Under this new initiative, Polygon becomes an attractive choice for these fintech/payments builders, as they no longer have to co-mingle and coordinate between multiple separate parties at a time to build their onchain solution. Overall, the initiative had one goal, to be the payments hub and “move all money onchain”.

The announcement had an immediate positive reaction, with the POL token surging ~38%, rising from $0.13 to $0.18. The bullish reaction was supported by Polygon’s prior partnership announcements with major payment processors — Revolut (Europe's largest fintech processing up to $1.2B on Polygon), Flutterwave (Africa's leading cross-border payments platform), and Shift4 (processing over $200 billion annually).

Polygon Payment Metrics

Polygon established itself as the second-most active blockchain for USDC transfers and third for USDT throughout 2025. This puts Polygon as the most active EVM blockchain for USDC, ahead of Base and even Ethereum. 

Payment processor volumes on Polygon had an impressive growth in 2025, growing 409% from $389M in total monthly volume to $1.98B by January 2026. New entrant Tazapay cemented itself as the payment processing leader on Polygon as they continue to make transaction volume records, most recently processing $687M in February 2026.

Polygon Stablecoin Supply

Polygon’s stablecoin supply grew 99.8%, outpacing the global market average of 45.2% and reaching an ATH supply of $3.28B in February 2026 and most recently another ATH in March 2026. USDC is the dominant stablecoin on Polygon with a 51.1% market share followed by USDT (27.8%%) and USDS (19.5%), formerly known as DAI.

Despite being one of the chains with the most active stablecoin users, Polygon only holds 2.21% of the total supply of USDC and 0.5% of total supply of USDT. This reflects the velocity of its stablecoins, as ~$2B in transactions were processed by payment processors vs ~$3.28B in stablecoin supply in February 2026.

Polygon Network Total Value Locked (TVL)

Despite Polygon Lab’s shift away from DeFi to payments, Polygon’s DeFi sector continued to thrive with TVL growing 40.1% Year-on-Year, reaching $1.17B at the end of January 2026. A bulk of this growth can be attributed to the rise and continued growth of the prediction markets space helmed by the market leader, Polymarket. 2025 saw Polymarket increasing its TVL from ~$172M at the beginning of January 2025 to $375M by the end of January 2026, now representing 24.3% of the network’s TVL.

Beyond Polymarket, traditional DeFi remained robust with QuickSwap retaining the largest share at 29.2% ($451M). Spiko, a tokenized money market fund provider that only launched in August 2024, now holds 13.8% ($213M), overtaking Aave, a traditional crypto lender.

Polygon Network Transaction and Revenue Metrics

Polygon demonstrated stable baseline network activity throughout 2025, averaging 119M monthly transactions and 7.4M active users. For the first nine months of the year, transaction counts remained relatively consistent between 85M-110M per month, while MAUs held steady around 6-8M. The network experienced an activity surge in Q4 2025, with transactions climbing from 116M in October to 183M in December. MAUs followed a similar trajectory but interestingly died down in January and February 2026 despite transaction counts remaining elevated. This divergence indicates that transactions per user surged since January 2026. This could be explained by the rise of institutional users such as payment processors whose volumes surged heavily in Q4 2025. Network revenue surged fivefold in January 2026, to its highest monthly levels since February 2023, driven by exploding payment apps usage and Polymarket trading activities.

POL Token Price and Trading Volume

POL experienced significant price erosion throughout 2025, declining from $0.52 in January to a year-low of $0.10 by December. The POL token initially struggled alongside other altcoins until it founds its footing amid a market increasingly dominated by major cryptocurrencies.

September 2025 saw trading volume surge to over $600M as Polygon achieved 99% completion of the MATIC-to-POL migration, with the price briefly rallying from $0.19 to $0.27. POL further had a temporary rally in January 2026 with the Open Money Stack announcement but ultimately trended back down. Despite Vitalik Buterin’s generally positive comments on Polygon, his previous comments discontinuing support of Ethereum Layer 2s has affected the overall market sentiment of Layer 2 governance tokens.

Despite the relative decline in the past year, we could see a turnaround for POL due to a recent sharp increase in POL token burns. Polygon currently employs a burn mechanism correlated to network revenue, resulting in a record 28.2M POL burnt in February 2026. As network revenues surged, POL's deflationary mechanisms may possibly reverse the trend.

Author’s Note

Polygon is technically not a Layer 2 and is instead an Ethereum sidechain. However, the market generally considers their token POL as part of the Layer 2 category together with other Layer 2 tokens such as Optimism, Arbitrum etc.

POL Native Staking Metrics

A notable change in POL native staking this year was the reduction of staking APR from 4% to ~3% starting in July 2025. The final emissions of MATIC were distributed in July as per PIP-26 which means rewards will from then on be derived solely from network fees and POL inflation, immediately lowering yields to the 2.5-3.0% range. Noticeably after the conclusion of MATIC emissions, ~400M POL were unstaked in response to the lowered staking APRs.The staking ratio of POL (Staked POL: Total POL Supply) remained relatively constant throughout 2025 at ~38.0%. 

Polygon Network Total DEX Volume

Compared to 2024, DEX trading volume on Polygon has fallen 32%, down to $39.5B compared to 2024’s $58.1B. In the broader markets, this puts them out of the top 10 chains by DEX volume (they were previously ranked 10th) and is now replaced by new entrants such as Hyperliquid and Unichain.

Polygon's decentralized exchange (DEX) ecosystem exhibited a duopoly structure with extreme concentration of trading volumes limited to just Uniswap and QuickSwap. Collectively, these two DEXs commanded a combined 95%+ market share across all thirteen months. The remaining 5% fragmented across DODO, Balancer, and a long tail of smaller DEXs which collectively never exceeded $150M monthly. 

Counterintuitively, despite Uniswap edging ahead of QuickSwap in monthly volume, QuickSwap held 6x more TVL at $451M compared to Uniswap's $71M. Traders seemingly defaulted to Uniswap, possibly due to brand recognition and cross-chain routing integrations, even though QuickSwap's larger liquidity base theoretically offers tighter spreads for large trades, and thus better swap rates. 

On the side of liquidity providers, QuickSwap generally offered better yields compared to Uniswap, which could be due to token incentives. Liquidity providers also generally preferred to provide liquidity on higher TVL pools due to higher perceived security. Altogether, these factors solidify QuickSwap as the DEX leader in terms of liquidity.

The Future of Polygon

Polygon's 2025 to early 2026 transformation represents one of the most decisive strategic advancements in the Layer-2 space. The $250M acquisitions of Coinme and Sequence, combined with six major network upgrades, delivered the technical performance and regulatory infrastructure required for specialized payments positioning. With the January 2026 Open Money Stack announcement, Polygon is positioning itself to pursue its new goal of "bringing all money onchain".

Currently, their metrics validate early traction with a 409% surge in payment processor volumes and partnerships with Revolut, Flutterwave, and Shift4 prove that enterprises view Polygon as an attractive payments processing platform.

It still remains to be seen whether Polygon can compete with the likes of traditional payment processors and crypto-native alternatives like Solana and Base, which continue expanding their payment capabilities.

Nevertheless, with seven years of operations, established partnerships, and $3.4B in stablecoin liquidity already onchain, Polygon offers institutional investors higher confidence especially against emerging competitors such as Arc and Tempo, which have yet to launch their respective blockchains.