DeCrypting Crypto

DeFi Projects = Polygon

DeFi Projects continue moving to Layer 2 Solution Polygon due to Polygon’s cheaper transaction costs and faster block time. Cheap transaction costs and fast block times have largely driven the growing adoption of Polygon by SushiSwap, Aave and other DeFi projects, according to analysts and those people behind some of the DeFi projects being actively developed.

Polygon is one of the early projects providing an Ethereum layer 2 scaling solution, but has grown significantly in the past few months. As of June 13 2021 the popular automated market maker SushiSwap has more than 15,000 unique active wallets on Polygon with Ethereum that number was 4,194 [DappRadar] meaning there are more SushiSwap users on Polygon than there are on Ethereum.

BUT the trading volume of SushiSwap on Ethereum is still much higher than it is on Polygon. On June 14 alone, SushiSwap completed around $200 million in transaction volume on Ethereum but only about $47 million in transaction volume on Polygon.

This may indicate that Polygon’s growth is mainly due to increased DeFi usage by retail traders and investors, who are mostly conducting small value transactions. These users are looking for a better experience with cheaper Gas Fees where it also points the whales are being loyal to the Ethereum DEXs.

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