The Polygon network saw a record increase in daily transactions, going from 2.89 million to 6.1 million in just 24 hours. Gas fees on Polygon skyrocketed, with transaction costs rising to over 7,000 Gwei before settling at around 400 Gwei, but remaining below Ethereum fees.
The Polygon network, a major Ethereum sidechain, has witnessed a notable increase in daily transaction activity. In 24 hours, transactions on the network increased from 2.89 million to a record 6.1 million, marking the highest daily transaction count since October of the previous year.
This increase represents a major milestone in network usage, reflecting growing interest and engagement within the Polygon ecosystem.
Gas Rate Dynamics: A Change in Costs
This increase in transaction volumes was accompanied by a notable increase in gas rates. In a dramatic shift, average transaction costs on the Polygon network rose from 100 Gwei to over 7,000 Gwei before settling at around 400 Gwei. according to Polygon Scan.
This volatility in gas rates highlights the dynamic nature of blockchain networks in response to rapid changes in usage patterns. Despite this increase, Polygon’s transaction costs remained significantly lower than those on the Ethereum mainnet, where fees for similar transactions can range from $30 to $50.
The increase in transaction costs especially affected token swaps. on the blockchain. The costs of these operations reached approximately $5, a stark contrast to the network’s usual rates. However, these fees have since moderated to less than $0.50, indicating a return to more typical cost structures.
The Arrival of PRC-20 Tokens and Its Impact on the Market
A key factor behind this transactional boom is the introduction of a new token standard at Polygon, called “RPC-20.” These tokens, inspired by Bitcoin’s Ordinals protocol, are created using transactional call data, a departure from the conventional ERC-20 token standard. PRC-20 tokens, particularly those called POLS, have seen widespread minting, which has contributed significantly to the increase in transaction volumes.
This new token mechanism, which echoes the principles of the Ordinals protocol, employs a different method of incorporating data into individual transactions on the blockchain. Unlike the traditional approach in ERC-20 Tokens, PRC-20 tokens use transaction call data to generate unique tokens or NFT-like artifacts within the Polygon network.
The increase in gas fees and increase in transactional activity can mainly be linked to this new wave of PRC-20 token minting. As demand for block space intensified, users were willing to pay higher gas rates, creating a competitive environment and higher transaction costs.
Current State and Future Perspectives
Despite the recent surge, Polygon offers a more cost-effective solution than the Ethereum mainnet. Although high, current gas fees on Polygon translate to significantly lower costs compared to Ethereum fees. For example, a 4,005 Gwei gas fee on Polygon is roughly equivalent to $0.08, a fraction of Ethereum’s gas fee costs.
However, Polygon’s native token, MATIC, has seen a downturn. In the last 24 hours its value has decreased by 1.95%, with a notable drop in 24-hour trading volume. This decline reflects the market’s reaction to recent grid activity and gas rate fluctuations. Recent developments on the Polygon network underscore the fluid nature of blockchain ecosystems.
By Audy Castaneda