Even though decentralized finance [DeFi] saw a brief hiccup last month, with transaction numbers and trading volumes falling, it was now making a strong recovery. The project that grabbed more interest than others was layer 2 solution, Polygon.
Polygon vs. Ethereum
There have been multiple facets of the project that attracted traders like cheap transaction costs and faster block time. These two notable features facilitated Polygon’s adoption in recent months. According to research by DappRadar, SushiSwap and Aave have been the major drivers of interest within the Polygon ecosystem.
Polygon ecosystem has been providing similar products to clients that are available on Ethereum but was more cost-effective. For instance, SushiSwap has been on Ethereum for almost a year and was among the largest Ethereum-based DeFi solutions. Whereas, it has been only a few months since Sushi appeared on Polygon and has over 15,000 unique active wallets compared to 4,194 on Ethereum.
The number of transactions on the Polygon network (MATIC) is 600% higher than on the Ethereum network. Users have made 7 million recent transactions against 1.18 million, respectively.#polygon #matic #ethereum $MATIC $ETH pic.twitter.com/cL6GPxtjR0
— PHOENIX (@pnxgrp) June 15, 2021
Thus, it can be said that there were more users on the Polygon chain.
Aave, on the other hand, noted an average daily transaction count of 9,224 on Polygon, while that transaction count was limited to 1,560 on Ethereum. Similarly, it logged a daily average of $6.75 billion in transaction volume on Polygon compared to $2.48 billion and $2.28 billion for Aave and Aave V2 on Ethereum
Sushi still served on Ethereum
Despite higher user traffic on Polygon, Sushi has been witnessing higher trading volume on Ethereum. On 14 June, it hit $200 million in transaction volume on Ethereum, while the volume remained low on Polygon with $47 million.
This indicated that the users on Polygon chain were transacting in small volumes and the high volume transactions were still taking place on Ethereum.
Who will take the lead in June?
June has just begun and the two blockchains were up for a challenge. As the market remained volatile,the activity on Polygon was rising, but Ethereum remained close to its average displayed during May.
As of June 15th, Polygon's TVL has exceeded $10billion, and it is currently $10.23billion, an increase of 57.9% in the past three days, AAVE accounting for 37.14%. Polygon's average daily trading volume is 614.2% of Ethereum. pic.twitter.com/wJFmp218vk
— Wu Blockchain (@WuBlockchain) June 15, 2021
It might be too early to guess the results of this race yet, but given Polygon’s push to dominate the DeFi market, Ethereum might have to work harder.
With Polygon already taking a lead, holders of MATIC may also want to shift their attention to the spot market. After falling as low as $1.15 over the weekend, MATIC has recovered and was currently trading at $1.39. This could suggest that MATIC’s growth was driven by the strong Polygon ecosystem.