Key Takeaways:
Ethereum is a decentralized, open-source blockchain platform that helps good contracts, whereas Polygon is a Layer 2 scaling resolution for Ethereum.
Regardless of Polygon’s considerably decrease transaction prices and better throughput, Ethereum nonetheless boasts a better whole worth locked (TVL) market cap.
For NFT patrons and sellers, it is considerably cheaper to mint, promote and purchase NFTs on Polygon OpenSea than on Ethereum OpenSea.
If you’re considering of launching a crypto undertaking like a non-fungible token (NFT), one of many crucial selections you’ll make is selecting which chain your undertaking will function on. That is the place evaluating how Polygon stands up in opposition to Ethereum is available in. Bear in mind, your blockchain selection may play a major function in your undertaking’s final success.
Polygon (previously often known as Matic Community) is a decentralized platform that operates on the Ethereum blockchain. It’s designed to offer quick and low-cost transaction charges, making it a lovely possibility for builders who wish to construct decentralized purposes (dApps) on the Ethereum community. However, Ethereum is a decentralized, open-source blockchain platform that allows the creation of good contracts and dApps.
This information offers a side-by-side comparability of Polygon vs. Ethereum. We glance into the 2 blockchains and contact on their whole worth locked, market caps, consensus mechanisms, transaction per second, tokenomics, decentralization, and extra.
What’s Polygon?
Merely put, Polygon is a Layer 2 scaling resolution for Ethereum. It goals to offer quicker and cheaper transactions for Ethereum via sidechains. A sidechain is a separate blockchain linked to the primary blockchain (on this case, Ethereum) via a two-way peg. The peg facilitates the switch of knowledge and belongings – between the primary chain and the aspect chains – whereas sustaining the primary chain’s safety and immutability.
On Polygon, transactions are processed on the aspect chains moderately than the primary chain. This enables for quicker transaction speeds and decrease charges, because the aspect chains should not as closely congested as the primary chain. As well as, Polygon offers for the creation of a number of aspect chains, every with its personal algorithm and governance constructions. This allows builders to create custom-made blockchain environments for his or her particular wants.
Some key options of Polygon embrace:
Scalability: Polygon makes use of a community of aspect chains to dump transactions from the primary Ethereum chain, permitting quicker transaction speeds.
Low transaction prices: Polygon boasts considerably decrease transaction prices than Ethereum.
Compatibility: Polygon is absolutely appropriate with the Ethereum Digital Machine (EVM), which means that builders can use the identical instruments and languages to construct on Polygon as they’d on Ethereum.
Modularity: Polygon is modular, which suggests it may be custom-made to suit totally different wants and use instances.
Some limitations of Polygon embrace:
Centralization: Polygon is partially decentralized because it depends on a set of validators to verify and file transactions. Whereas these validators are chosen via a democratic course of, it’s nonetheless attainable for them to collude or act in their very own self-interest, which may compromise the community’s safety and integrity.
Adoption: Whereas Polygon has gained some traction within the blockchain business, it nonetheless has a comparatively small consumer base in comparison with Ethereum.
Restricted performance: Whereas Polygon has a variety of capabilities, it might not be appropriate for all use instances and will not provide the identical performance as Layer 1 blockchains, like Ethereum.
What’s Ethereum?
Ethereum is a decentralized, open-source blockchain platform that runs good contracts: purposes that run precisely as programmed with none chance of downtime, censorship, fraud, or third-party interference. Ethereum was created in 2015 by Vitalik Buterin, a Russian-Canadian programmer and co-founder of Bitcoin Journal. It is sometimes called a “world pc” as a result of it was the primary blockchain to permit builders to construct and deploy dApps that run on a worldwide community of computer systems moderately than simply on a single server or pc.
Ethereum operates on a decentralized pc community that makes use of a proof-of-stake (PoS) consensus algorithm to validate transactions and add them to the blockchain. It’s secured by a community of computer systems (often known as nodes) that work collectively to validate transactions and add them to the blockchain.
In addition to, Ethereum has its programming language referred to as Solidity, which is used to put in writing good contracts. These good contracts can be utilized to facilitate the trade of something of worth, together with cash, property, and shares, and they’re mechanically executed as soon as the specificied situations are met.
Some key options of Ethereum embrace:
Good contracts: Ethereum permits builders to create self-executing contracts with the phrases of the settlement between purchaser and vendor being straight written into traces of code.
DApps: Ethereum allows the event of dApps that aren’t managed by any single entity.
Programming language support: Ethereum helps a number of programming languages, making it extra accessible to a broader vary of builders.
Ecosystem: Ethereum has a big and extra lively developer group than another blockchain, in addition to a rising ecosystem of instruments and assets for constructing dApps.
Safety: Ethereum has been in operation since 2015. It has by no means skilled extreme safety points all through this era, like a 51% assault or whole shutdown like most Layer 2 chains.
Some limitations of Ethereum embrace the next:
Scalability: Ethereum has struggled with scalability points for the reason that 2017 ICO increase. It has restricted throughput and may change into congested with excessive numbers of transactions. The Merge, which marks the transfer of Ethereum from Proof-of-Work to Proof-of-Stake, is without doubt one of the Ethereum upgrades with the objective of bettering scalability.
Complexity: Ethereum might be complicated for builders new to blockchain know-how, because it requires an excellent understanding of programming and cryptography.
Price: Ethereum transactions might be expensive, particularly throughout excessive community utilization.
Polygon vs. Ethereum
Whereas Polygon is touted as an Ethereum killer, Ethereum continues to be holding robust in opposition to the competitors. As of time of writing, Ethereum boasts a better whole worth locked (TVL), market capitalization, and a bigger dApp ecosystem. In the meantime Polygon presents cheaper transactions and better transactions per second. 
TVL
As of January 2023, in accordance with DefiLlama Ethereum has a TVL of $27.25b, whereas Polygon has a TVL of $1.15b. TVL refers back to the whole worth of funds locked within the good contracts on a given blockchain. It signifies the belongings accessible in numerous ecosystem dApps for buying and selling, borrowing, lending, staking, farming, and many others. Usually, a better TVL reveals extra development within the DeFi panorama of that ecosystem – reflecting usability, liquidity, and recognition.
Market Cap
As of January 2023, the Ethereum ecosystem boasted a market cap of $474.6b, whereas the Polygon ecosystem had a market cap of $220.9b. The market cap of an ecosystem is the sum of the market caps of the belongings that stay on that chain. You possibly can calculate the market cap of an asset by multiplying its present worth by the circulating provide.
Market cap = Worth x Circulating Provide
The upper the market cap of an ecosystem, the extra dominant it’s within the crypto market.
Consensus Mechanism
Each Polygon and Ethereum use the PoS mechanism to realize consensus. Ethereum migrated to the PoS mechanism throughout The Merge due to the vitality burden of PoW. It is necessary to notice that Polygon makes use of the PoS mechanism and different strategies to realize excessive scalability and low fuel charges. These strategies embrace Plasma chains, ZK-rollups, and optimistic rollups.
Transaction per Second (TPS)
TPS is a instrument for measuring the scalability of a blockchain. The upper the TPS worth, the extra scalable the community is. After the profitable implementation of The Merge and completion of the upcoming Sharding improve, Ethereum will boast a TPS of as much as 100,000. However, Polygon guarantees the potential of over 7,000 TPS. Realistically, as of time of writing, the present TPS of Ethereum is at round 11 TPS, whereas Polygon clocks in at 34 TPS.
Tokenomics
Ethereum has a circulating provide of virtually 120.5m and an uncapped most provide.
The preliminary distribution of Ethereum (ETH) is as follows:
83.33% is allotted to Ethereum Crowdsale.
16.68% is allotted to Ethereum Basis, Early Contributors & Others.
Polygon has a circulating provide of 8.9b and a most provide of 10b.
The preliminary distribution of Polygon (MATIC) tokens is as follows:
12.00% is allotted to Staking Rewards
23.33% is allotted to the Ecosystem
21.86% is allotted to the Basis
4.00% is allotted to Advisors
16.00% is allotted to the Workforce
3.80% is allotted to Non-public Buyers
19.00% is allotted to Binance Launchpad
Decentralization
Polygon has capped the variety of its validators at 100, implying just a few individuals safe the Polygon blockchain. Aside from the small variety of validator units, the entire Polygon safety and the dApps operating on it are managed by merely 5-out-of-8 multisig (4 of that are owned by the Polygon group. These two factors make Polygon partially decentralized. However, Ethereum has over 400,000 validators and is decentralized to a degree the place it will probably’t be censored.
Fuel Charges on Polygon and Ethereum
One of many important Ethereum pain-points Polygon builders needed to resolve was the exorbitant fuel charges that plague the community during times of excessive congestion. The desk under illustrates how Polygon compares to Ethereum concerning fuel charges, and whereas Ethereum fuel charges are considerably decrease now in comparison with their earlier excessive of $196.69, Polygon nonetheless presents cheaper fuel charges than Ethereum.
In a bid to maintain fuel charges low even when there may be a whole lot of exercise on the community, Polygon applied a arduous fork on January 17 2023 to clean out “fuel spikes”, that are esevere fluctuations in fuel costs resulting from Polygon’s PoS chain’s quicker block occasions.
Promoting and Shopping for NFTs on Polygon vs. Ethereum OpenSea
Polygon and Ethereum blockchains help the minting and buying and selling of NFTs. OpenSea is a market for minting and buying and selling NFTs, and not too long ago, OpenSea began supporting Polygon NFTs along with Ethereum NFTs. Partly resulting from Polygon’s low transaction charges, OpenSea pays for all fuel prices on Polygon, making transactions free for customers, though customers nonetheless must pay fuel charges if they’re transferring ETH to the Polygon community.
Polygon appeals to small-time purchasers, as based mostly on Dune Analytics, the typical value of an NFT on Ethereum OpenSea is roughly $345, whereas the typical value of an NFT on Polygon OpenSea is considerably much less at $10.
Whereas minting and buying and selling NFTs on Polygon OpenSea is cheaper than Ethereum OpenSea, most Polygon NFTs should not blue-chip NFTs and boast lesser cultural significance. Most blue-chip NFTs, together with CryptoPunks (PUNK), Bored Ape Yacht Membership (BAYC), Azuki (AZUKI), and PudgyPenguins (PPG), stay on the Ethereum community. Nonetheless, this may change, given the recognition of Reddit’s Collectible Avatars NFTs, that are minted on Polygon.
Finally, whether or not to purchase and promote NFTs on Polygon or Ethereum OpenSea will depend on your particular wants and priorities. If you’re on the lookout for low fuel charges and wish to faucet right into a rising market, Polygon is likely to be an excellent possibility. If you’re on the lookout for extra liquidity and wish to checklist your assortment alongside blue-chip NFTs, Ethereum is likely to be a better option.
Conclusion
Polygon goals to make it simpler for individuals to entry and use Ethereum by offering a scaled up model of the Ethereum community with decrease charges and quicker transaction occasions. Whereas there could also be uncertainty about Polygon’s function sooner or later as soon as Ethereum completes its upgrades, Polygon at present serves a precious function within the cryptocurrency ecosystem by serving to carry extra individuals in by offering scalable options for web3.
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Josiah Makori
Josiah is a tech evangelist enthusiastic about serving to the world perceive Blockchain, Crypto, NFT, DeFi, Tokenization, Fintech, and Web3 ideas. His hobbies are listening to music and enjoying soccer.
Comply with the creator on Twitter @TechWriting001
