Introduction

After the YTD run in alts, MATIC stands out to us as somewhat left behind. To put this in context, here are the major L1/L2s YTD. MATIC is in the mid-low end of the pack and admittedly this makes sense – large cap, liquid, one the top performers in 2022 and not particularly ‘degen’. Whilst MATIC is up 12% today post FOMC, it has significantly lagged its main L2 peer OP (up +197% YTD) despite the fact that OP’s on chain KPIs have recently taken a dive following what appears to be aggressive farming as part of Optimism’s quests ahead of upcoming airdrop rewards, and excitement around the Bedrock upgrade. As this rally matures, we think it is likely that we see some capital rotation out of alts that have rallied 2-4x into...