Introduction

Polygon (previously known as the Matic network) is a decentralized scaling platform for Ethereum that enables the development of scalable decentralized applications with low transaction fees. Polygon is an answer to some of the major challenges that face Ethereum today, such as high gas fees, poor user experience, and low transaction throughput. Since its launch, it has seen solid growth in terms of its user base. In this analysis, this growth has been evaluated using the wallet addresses that participated in a transaction on the Polygon network.

Wallet addresses, considered as the Web3 replacements of usernames in the Web2 era, are a great source of data for measuring the overall growth of a blockchain. Based on how an analyst assesses the number of addresses, a wide range of indices could be defined. From the author's perspective, there is a difference between new and unique daily addresses. Thus, after defining and distinguishing between the two, two separate approaches have been taken to measure each of these indices.

New Addresses

New addresses, as a factor indicating the overall adaptation of the network, are those which interact with the network through a transaction for the first time. This covers both sides of the transaction which means the address can be either the sender or the receiver. This also has taken into account because multiple events exist in the network which might result in an address having a balance without participating in a transaction. Then that address can act as the sender of a transaction. For an address to be new there has to be no footprint of it in previous days of its first transaction.

Unique Addresses

Unique Addresses can be similar to new addresses depending on the time scale in which they are measured. If assessed on a daily time frame, the number of daily unique addresses is an indication of overall user engagement on the network. In other words, this number shows how much users contribute to the network within that specified time frame.

Methodology

The required data for this analysis were collected from the transactions table of the polygon schema was used. Both the from_address and to_address columns were used to have a total value for all of the network's users. The calculation of daily unique addresses was pretty straightforward by just counting the distinct number of addresses per day. For measuring the new addresses through the lifespan of the network, first, the earliest date an address contributed to a transaction was determined. Then the number of addresses was summed for each day as the new users adding to the network on that particular day.

Analysis

The following chart demonstrates the number of daily new addresses which participate in a transaction for the first time. As it can be seen in the chart, the network saw steady growth through its first year and even peaked at nearly 60k new users per day in summer 2021. As the whole crypto market continued to move upwards to the right in the last quarter of 2021, the number of new addresses maintained its increase and reached slightly below 200k addresses per day. However, as the market started its massive correction in December 2021, the number of new users also decreased. The drastic drop in the number of new addresses is an indication of low interest in the whole crypto sector which has resulted in fewer users coming and adopting new technologies. The cumulative line indicates a total users number of nearly 19M since the launch of the network which can be considered an immense user base for a blockchain.

The daily and the cumulative number of unique addresses have been plotted below. The chart's pattern is similar to the chart of new users, yet its scale is much higher. Although the slope of the curve was sharper from the start through the end of summer 2021, it peaked in late 2021 with the growth of the market. Interestingly, the Polygon network has seen a steady number of unique daily users since the start of the recent bear market which shows a massive user engagement. From another perspective, it demonstrates the usage continuation and leveraging of blockchain's infrastructure by the network's previous users despite the market status quo. Last but not least, the cumulative value for the daily unique addresses has surpassed the 100M mark which can be considered a huge achievement for the Polygon blockchain.

Conclusion

The analysis of daily new and unique addresses of the Polygon network based on the participants of the transactions has shown a drastic increase in user adaptation and user engagement of the blockchain's users. Although the current market downtrend has resulted in a decrease in new users coming to the network, the activity of the network in terms of transactions between wallet addresses has kept a steady trend. Nevertheless, the data has shown a downward movement since the beginning of May 2022 and it remains to be seen how the Polygon network can proceed through a bear market.