Fleeing Polygon, Building an Ethereum L2 In-House
The Economic Logic Behind Polymarket’s Strategic Pivot
▪ Polymarket plans to migrate from Polygon and launch its own Ethereum Layer 2, POLY, marking a shift from application to full-stack infrastructure
▪ Polygon’s recurring outages and weaker ecosystem have increasingly constrained a fast-scaling, high-throughput prediction market
▪ Polymarket now represents a systemically important app, no longer dependent on external base layers for growth
Why Polygon Is Losing a Power User
▪ ~25% of Polygon’s TVL tied to Polymarket (~$326M of ~$1.19B)
▪ ~23–25% of total Polygon gas usage attributed to Polymarket trades
▪ $14.3B historical trading volume, all settled in USDC, driving stablecoin velocity on Polygon
▪ High user retention spillover into DeFi and other Polygon-native applications
Why Build an In-House L2?
▪ Full control over execution environment and protocol upgrades
▪ Internalization of gas fees, MEV, liquidity, and ecosystem services
▪ Prevents economic value leakage to third-party networks
▪ Transforms Polymarket from a product into a self-contained economic system
Why Now?
▪ TGE is approaching — post-token launch migrations become structurally expensive
▪ “App → Appchain/L2” shift expands valuation narratives and capital ceilings
▪ Governance, incentives, and infrastructure can be designed natively from day one
Bottom Line
▪ This is not a breakup driven by ideology — it’s pure economic optimization
▪ As top-tier apps gain gravity, base layers that fail to add incremental value risk being sidelined
▪ Polymarket’s move is a clear signal: traffic owns leverage
#Layer2 #CryptoEconomics