Data proves DeFi users want cheaper transactions
It has been quite a month for the Polygon Network and its DeFi applications. The Ethereum sidechain is seeing increasing activity week on week as investors keep looking for the best value trading solutions. As a result, the recently ported Sushi is seeing users switch sides from their Ethereum platform to its Polygon dapp.
In the last 7 days, Sushi on Polygon has seen over 20,000 unique active wallets interact with its smart contracts whilst SushiSwap on Ethereum has seen 18,700. A small difference today but one that could develop significantly as users grow tired of high gas fees. More importantly, however, is the value flowing through these transactions.
SushiSwap on Ethereum has seen almost $3 billion in volume flow through its contracts whilst on Polygon the number is much lower at $125 million. Interestingly, we can see a cross-over point on the chart that indicates users started considering SUSHI on Polygon more from around the 24th of May, coincidently the day the entire crypto market hit its lowest point this year. This makes sense given that people were perhaps frantically trying to rebalance their portfolios whilst avoiding escalated gas fees.
These figures also indicate exactly what we already knew to be true. High-value transactions remain on Ethereum as investors are more willing to part with gas fees when moving larger amounts on the more reputable network.
Polygon keeps on growing
A single transaction on SushiSwap can cost a user up to $30 in gas fees whilst the same transaction on the Polygon network will be under $1. As mentioned, $30 is no problem when moving hundreds of thousands, but not as acceptable when moving a few hundred. A general increase in awareness of Ethereum alternatives and heightened education around how to use them is believed to also be adding to the surges.
There has been plenty of positivity around the Polygon protocol in 2021. Not only did the sidechain deal with the crypto crash without any major issues, but the native MATIC token also kept its value relatively well. Furthermore, recent news of American billionaire Mark Cuban investing in Polygon created an additional wave of interest. It led to an increase in both the token price and total value locked within the DeFi ecosystem. Polygon saw 1,102% growth in its total value locked and ended the month of May around $5.7 billion TVL.