Polygon’s native token MATIC has experienced notable disparity compared to the broader cryptocurrency market. Unlike the main cryptocurrencies that have been published double-digit earnings Year-to-date, MATIC has failed to deliver a positive performance in every period since the 2021 bull run.
To add to the concern, the price of MATIC has recorded losses of 16.5% in the last seven days. This downward trend has seen the token test a crucial macro support level, raising questions about its future trajectory.
Amid these developments, Polygon announced a strategic partnership with Aragon, a developer of decentralized autonomous organizations, to introduce a “governance hub” for the Polygon community.
Simplified governance center for Polygon?
According to a recent blog post Per the Layer 2 solution protocol, the governance center is “designed to empower” users and builders by allowing them to influence the core development of Polygon’s technology. The hub will be developed in phases in collaboration with Aragon to ensure community feedback is incorporated to create a decentralized platform that aligns with community values.
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The governance center will feature a unified interface for “two essential pillars” of Polygon governance: protocol and system smart contract governance.
![MATIC Price Tests 8-Month Support as Polygon Unveils New Governance Center 1 MATIC](https://thegurumedia.com/wp-content/uploads/2024/06/Screenshot_185.jpg)
The center seeks to increase transparency and encourage greater community participation in the governance of the protocol. As for the system’s smart contract governance, it introduces an updated framework that prioritizes structured decision-making processes while maintaining transparency and security.
Additionally, Aragon will leverage its expertise to build the Polygon Governance Hub using Aragon OSx. This tool allows the construction of customized on-chain governance solutions which can be adapted over time through a modular architecture based on plugins. Polygon stated in its announcement:
Polygon and all related network architecture need flexible, transparent, and future-proof governance mechanisms and tools. The Polygon Governance Hub is critical to achieving this.
MATIC market capitalization drops sharply
Despite developers’ focus on community governance within the Polygon ecosystem, key metrics indicate a consistent decline in the price of the MATIC token over the past year.
For example, the token market capitalization suffered a significant drop, dropping almost 50% in just three months. In March, it was valued at $9.9 billion, while it is currently valued at $5.6 billion. This decline suggests a potential shift of capital to other large-cap tokens or for-profit activities.
Furthermore, MATIC’s trading volume has also seen a notable drop of approximately 18% in the last 24 hours, according to CoinGecko. data. Trading volume is now just $293 million. Furthermore, MATIC has witnessed a substantial decline of 80% from its all-time high of $2.92 in December 2021.
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The token is currently facing a critical test at an 8-month support level, as shown on the MATIC/USD daily chart below, with its current trading price at $0.5982. If the price continues to fall without a significant catalyst to drive a upward trend and price recovery, attention should be paid to the next support level at $0.5700.
The future trajectory of the MATIC price remains uncertain and it remains to be seen whether a further downward move is anticipated or whether a rebound at the current support level will materialize, offering potential opportunities for bullish investors.
Featured image of DALL-E, chart from TradingView.com