The price of Ethereum reaches an all-time high: what does the Polygon have to do with it?

    18 May 2021

    The price of Ethereum reaches a historical maximum, surpassing all expectations, and this is due to the fact that Polygon flips Ethereum in daily transactions

    Layer-2 solution Polygon (MATIC) turned some heads as it has surpassed Ethereum (ETH) in the number of transactions, and is now being discussed as a possible competitor to Binance Smart Chain (BSC).

    Per, the number of daily transactions on Ethereum hit nearly 1.64m on May 11 – its all-time high (ATH), dropping to 1.43m by May 18. Per Polygon explorer, yesterday, there were more than 4m transactions facilitated by this protocol and framework for building and connecting Ethereum-compatible blockchain networks.

    Also, according to Richard Galvin, co-founder and CEO of Digital Asset Capital Management, citing blockchain analytics platform Nansen, it has flipped Ethereum and its transaction count accelerated since. “It’s achieving this with only ~5% of the daily active users of [Ethereum]. [Polygon] users up around 5 – 10x since April,” he said.

    Messari Crypto’s Mira Christanto also noted this rise, adding to it the gas fee difference as “most of the Polygon transactions are due to bots able to function with low gas fees.” At 12:36 UTC, MATIC, ranked 16th by market capitalization, trades at USD 2.08, after it hit an ATH just today of USD 2.18 (per Coingecko). It’s up 25% in a day and 413% in a month. In a year, it appreciated a whopping 10,194%.

    Also, Per Coingecko’s categories, the whole Polygon ecosystem of 155 cryptoassets is up by 9% today.

    According to Galvin, it is “reassuring to see fundamental growth where there is strong price growth.” And as Ethereum continues to face gas and scaling challenges, some, like Chief Investment Officer of the crypto hedge fund outfit Arcane Assets Eric Wall, wonder if Polygon is “winning” over BSC – another platform that’s been gaining traction among developers, particularly those in the decentralized finance (Defi).

    The answer to Wall’s questions for some depends on the metric, arguing that BSC is winning in the number of projects, while Polygon is winning in the quality of projects, writes Cryptonews.

    Total value locked (TVL) in Polygon, per DeFi Pulse, is USD 6.5bn, seeing a massive rise from USD 40m recorded on January 1. Per Defistation, TVL on BSC dropped to USD 41.4bn today.

    Meanwhile, Wall also discussed the possibility of Polygon being more decentralized than BSC, ultimately stating that Polygon’s connection to Ethereum may be “a bit artificial.”

    Ethereum network average fees drop 74% in five days. On May 12, the transaction fee on the altcoin blockchain set an all-time high of $ 37.8. To date, the indicator has dropped to $ 9.8.

    Leave a Reply

    Your email address will not be published. Required fields are marked *