Polygon’s TVL registered a sudden surge in the past 24 hours in a surprising twist. While that surprised many, upon inspection it was noted that this walk was due to just one of over 200 protocols – Balancer.
The decentralized exchange closed the vote today on a very important proposal, one that affects the governance of the protocol.
Balancer needs some balance
On February 24, a proposal was submitted to renew Balancer’s governance process. One intended to establish the possibility of undue support for a proposal from larger BAL holders.
The proposal in question stated that for the protocol in the future, the Gov Council will have the final say on whether or not the proposal is justified and whether it should be adopted. However, the governing council would not have voting rights.
This proposal may pass with flying colors after today’s vote ends. Currently, the proposal has over 39,000 votes, all 100% in favor of the proposal.
The optimism surrounding the proposal resulted in an astonishing increase in total value on the dApp. Data from DeFi Llama showed that the TVL rose from $2.88 billion to $6.79 billion in 24 hours – a 135% increase.
This was also reflected in Polygon, where the dApp is deployed, as the TVL rose 97%.
Polygon, in particular, is preferred by smaller traders for the decentralized exchange. Especially since on-chain data shows that the number of transactions under $100 exceeded 2.27 million and transactions under $1000 reached 2 million.
Larger cohorts participating in trades valued between $1000 and $100,000, cumulatively, were just over 832k.
Here it is also worth pointing out that Balancer has a problem when it comes to investments as 87.33% of its 36.1k addresses suffer losses.
The protocol’s token, BAL, is down 83% since its all-time high of $72 in May to trade at $12.1. For many, this can be seen as a barrier to attracting new investors. However, new proposals and an increase in TVL may offer a solution.
This post The Lesser Known Reason Behind Polygon’s $3 Billion TVL Increase
was published first on https://ambcrypto.com/the-lesser-known-reason-behind-polygons-tvl-hiking-by-3-billion/