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Is Polygon’s strengthening presence in DeFi likely to overshadow Binance Smart Chain

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Source : Pexels

In the constantly growing Decentralized Finance (DeFi) space, the emergence of Polygon is not surprising. The network has been making efforts to become more efficient and the work has been paying off. While the top players like Ethereum and Binance Smart Chain continue to bank on their pre-established user base, Polygon is looking to attract more every day.

Polygon beating Ethereum, Binance…

… doesn’t sound very convincing. Both Ethereum and Binance Smart Chain have higher values locked (TVL) in the chains. In fact, Polygon’s closest competitor BSC still has almost half the size more protocols than that of Polygon. But participation is equally important and seems like BSC could be left behind there. 

Over the past few months, Polygon’s presence in the DeFi space has only gotten stronger. 

Participation in Ethereum and BSC around the same time has been relatively static. Polygon on the other hand has been gaining 1.3 million new wallets every day. At this pace, it can potentially surpass BSC in the next 2 weeks in terms of total addresses. 

Total addresses | Source: Coin98

In addition to that, just yesterday for the first time ever, Polygon’s daily active addresses surpassed Ethereum’s. 

Interestingly, the fight for dominating the DeFi transactions space has been ongoing for almost a month and a half now. Between BSC and Polygon, with both averaging at 6.3 million, so it’ll only be a while before we find out who’ll come out on top.

Daily transactions | Source: Coin98

But how?

The reason behind this rise goes back to the hottest asset in the market right now, that is the NFTs. Since its launch in June, NFTs on the network saw stunning growth. Traders were up by 82% and the total NFTs sold increased by over 130% sitting at 838k at the moment. While September was slightly sore for the DeFi space, the network continued to attract new investors. 

Polygon’s user base | Source: Polygon

This can be attributed to the latitude offered by Polygon which allows you to mint an NFT for pennies and take it back to Ethereum. This option of bridging helps investors due to the high fees associated with Ethereum. 

As a result, today, 50% of all NFTs sold on Ethereum are traded on Polygon through OpenSea. 

50% of all NFTs sold on Ethereum are traded on Polygon | Source: Polygon

However, even though BSC holds more value, users are what always makes anything successful. And Polygon has the upper hand there so it might gain higher values too in the long term. But as of now, it doesn’t serve as an immediate threat to BSC.

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Aaryamann is a full-time journalist at AMBCrypto. He is a recent journalism graduate, currently investing his time in the crypto-space. He has a keen interest in DeFi, the ever-expanding possibilities of blockchain technology, as well as the political impact they would have.