Polygon has a small DeFi application ecosystem, and these applications have been tested on Ethereum. The growth of transactions on the Polygon chain is stable and organic.
Written by: Joel John, director of Ledger Prime, a blockchain investment agency Translator: Lu Jiangfei
Overall situation: The number of transactions on Polygon is stable and organic
In the past few quarters, Polygon, the Ethereum side chain expansion solution, has developed very rapidly. This situation has not unexpectedly surprised too many people. If we compare some macro indicators, we will find that Polygon has been able to level with Ethereum in terms of transaction volume. The reason for this situation may also be related to some of Ethereum’s own problems. For example, the capacity of the Ethereum network is still low, and the gas fee has risen too fast, resulting in a lower frequency of individual users participating in the DeFi application on the Ethereum mainnet.
On the other hand, these problems of Ethereum also give the Binance Smart Chain an opportunity to shine. The Binance Smart Chain network transaction volume has increased from less than 1 million transactions per day to 1100 at its peak. Thousands of pens. Although Polygon’s growth rate was once slow in comparison, it is more stable and organic.
The picture above is from Nansen.ai
Basically, projects based on Polygon have been deployed on Ethereum before. Unlike the many forks and some blanket attacks on the Binance Smart Chain, Polygon has a smaller DeFi application ecosystem, and These applications have also been tested on Ethereum.
The number of users of the core DApp on Polygon
The picture above is from Nansen.ai
QuickSwap is a variant of Uniswap on the Polygon network, and Sushiswap, Zapper, Curve, and 1inch are all well-known DeFi protocols on Ethereum, which already support Polygon.
For those users who transition to the Polygon network, they choose to do so for two main purposes:
- 1. In order to avoid the high transaction costs on the Ethereum network;
- 2. In order to seek a similar experience with Ethereum.
Compared with the millions of dollars in gas transaction costs on the Ethereum network, the total daily transaction cost of Polygon may be only a few thousand dollars. However, there may also need to be weighed against security issues. But for now, with the attraction of low transaction fees, users seem to be willing to take this risk.
For me personally, data analysis shows that in a low-cost trading environment, the role of DeFi can play a role. Although applications like NFT are novel and large-scale B2C use cases can also be found, as long as the transaction processing speed can meet the needs of users, DeFi can still dominate the transaction volume.
Transaction share of core DApps
The picture above is from Nansen.ai
The image above shows the source of transactions on Polygon. I have excluded transactions from “unknown entities” to better understand how users use Polygon.
We found that when the crypto asset market soared to a record high, Aavegotchi’s trading volume also rose sharply. This trading situation may be an extension of risky behavior. After all, at that time, only digital assets were needed to make a profit. However, if we exclude this situation, we will find that with the rise of Sushiswap and Quickswap, the dominance of automated market makers (AMM) has become very obvious. In addition, the recent integration of Aave and Polygon has also contributed a lot to the transaction share.
How did Aave perform when deployed on Polygon?
The picture above is from Covalent
In early April, Aave announced its deployment to Polygon. Although it has been less than three months, the growth rate is very impressive. At the time of writing, the average user who implements Aave on Polygon can execute about 5 transactions per day.
It is worth mentioning that as of early June, more than 4,000 users have processed transactions through Polygon, and the total gas cost is less than $15.
With the reduction of borrowing and token exchange costs, the second-tier solution of the lending platform may bring about completely different user behaviors from today. One of the reasons why we have this judgment may be the performance of Quickswap-let us continue to analyze.
The rise of Quickswap
The picture above is from Covalent
The rapid growth of Quickswap may be related to the rise of other decentralized financial projects, but there are two things that are worth paying attention to:
- (1) At the time of writing this article, Quickswap has maintained the ability to support more than 10,000 exchange transactions-this indicates that users may take full advantage of its lower transaction fees;
- (2) More importantly, with the passage of time, the average value of token exchange has also continued to rise, rising from US$186 to a peak of US$30,000. Although the recent decline in the cryptocurrency market may have affected user behavior, it is safe to say that as a DeFi infrastructure, Polygon is fully capable of supporting whale-scale transactions.
Source link: ournetwork.substack.com
Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views, and have nothing to do with the position of ChainNews. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.
