With rising gas fees, is Polygon (MATIC) the real alternative to Ethereum?

Karthik Subramanian

For the last few months, Polygon (MATIC) has been in the news for all the right reasons as it has been projected as the alternative to Ethereum as it resides on the same network and hence has all the advantages of Ethereum built into it but at the same time, with much lesser fees.

polygon

This has been a very good selling point for the Polygon network and has helped it to gain traction among the developers and users so much so that it has been able to surpass the number of daily transactions that happen on the Ethereum network. We have also been seeing the prices of the MATIC skyrocket over the last few months and the token being listed on multiple exchanges, including Coinbase recently.

The Polygon network does have its share of complaints that include concerns over the security of the network and also the customer support as well. But all this has been sidelined as the gas fees on the network has been very low (by over 1000 times) when compared to the Ethereum network and with Ethereum also having some scaling issues (which are expected to be solved with its version 2.0), the Polygon network was able to grab a lot of attention as the biggest Layer 2 protocol.

But as the number of transactions on the network increases, we are seeing that the gas fees on the Polygon network have also been rising slowly and steadily. Over the last few weeks, we have seen the gas fees increase from $0.0005 to $0.002, a rise of 400% though the gas fees on ethereum have been pretty much steady during this period. Though this continues to be very low as compared to the Ethereum gas fees, we have to see whether it is a precursor to things to come as the traffic increases on the network. To add to the woes, as the price of the MATIC token increases, the gas fees would also be affected as well. Recently, we have also seen Biconomy integrating Chainlink to manage gas fees on Polygon and Ethereum networks.

Ethereum started similar to the Polygon network with low gas fees when the transactions on its network were low, congestion was less and the value of Ethereum was also very low. But with increased traffic comes increasing issues like network congestion, security, and higher gas fees and it remains to be seen whether Polygon would be up to that challenge and what solution it has to control the gas fees when the network traffic increases in due course of time. The answer for this would come with time and the verdict would have to wait till that time.

Read this next

Retail FX

Interactive Brokers adds 680k accounts, daily trades hit two-year high

Interactive Brokers LLC (NASDAQ: IBKR) recorded 2.44 million daily average revenue trades (DARTs) in February 2024, marking a notable increase from the 2.2 million transactions observed in the previous month. This figure represents the highest DARTs reported in two years, indicating an 11 percent monthly surge and a 15 percent year-on-year rise.

Retail FX

Financial Commission adds Ultima Markets to membership roster

Multi-asset brokerage firm Ultima Markets, operating under the trading name Ultima Markets Ltd, has been granted membership of the Financial Commission, marking the most recent inclusion into the ranks of the self-regulatory organization.

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)

Opinion

Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

<