Introduction to Polygon and Ethereum

1. Ethereum, like BSC, Solana, and Algorand, is a Layer 1 network, whereas Polygon, like Optimism, Arbitrum, and ZkSync, is an Ethereum Layer 2 scaling solution.
2. A Layer 1 network is a blockchain in the decentralised ecosystem, whereas a Layer 2 protocol is a third-party integration that can be used in conjunction with a Layer 1 blockchain.
3. One of the goals is for these Ethereum layer 2 scaling solutions to help save Ethereum from exorbitant transaction fees and relieve network congestion.
4. We will assess how far this goal has been met so far in this dashboard.

1. The line graph above shows the transaction fee collected on Polygon and Ethereum by day.
2. We can see that the amount of transaction fee collected on Ethereum per day is at least 100X greater than the amount of transaction fee collected on Polygon per day on the majority of days.
3. Daily transaction fee collected on Polygon averages around 25k USD per day, whereas Ethereum’s averages around 3M USD.
4. Polygon and Ethereum's transaction fee have a positive correlation, with some deviations on some days.

1. The line graph above shows the cumalative transaction fee collected on Polygon and Ethereum by day.
2. The transaction fee collection rate/gradient on Polygon and Ethereum is nearly identical, with Ethereum's transaction fee collected magnitude per day being ~ 100X greater.
3. This shows that there is a strong correlation between Polygon and the daily transaction fee collected by Ethereum, however, with different scale.

1. The bar charts above show the average transaction fee on Polygon and Ethereum by days in a week.
2. Fridays have the highest transaction fees on Polygon and Ethereum, with 32.1924k USD and 3.804M USD collected, respectively.
3. This implies that Fridays are the busiest days on Polygon and Ethereum, resulting in higher gas prices and transaction fees collected.

1. The bar charts above show the average transaction fee on Polygon and Ethereum by day on weekends vs weekdays.
2. Average transaction fee collected by day on both Polygon and Ethereum is higher on weekdays than on weekends.
3. The average transaction fee collected on Polygon on weekdays is approximately 18.22% higher than on weekends, whereas the average transaction fee collected on Ethereum on weekdays is approximately 7.6% higher than on weekends.
4. This suggests that the Polygon and Ethereum networks are busier and more active during the week, resulting in a higher average transaction fee collected.

Introduction to this dashboard

1. We will compare transactions fees on Polygon and Ethereum since July 1st 2022 in this dashboard.
2. The following metrics will be compared between the transaction fees Polygon and Ethereum :
   • Transaction Fee on Polygon and Ethereum by Day (in USD)
   • Average Transaction Fee per Transaction on Polygon and Ethereum by Day (in USD)
   • Cumulative Transaction Fee on Polygon and Ethereum by Day (in USD)
   • Total Fees Collected on Polygon vs Ethereum since July 1st (in USD)
   • Average Transaction Fee on Polygon vs Ethereum by Days in a Week (in USD)
   • Average Transaction Fee on Polygon vs Ethereum on Weekdays and Weekends (in USD)
   • Average USDC swap size and distribution of average swap size of swappers.

Approach

1. Due to a lack of Ethereum transaction fee data on July 2nd, the transaction fee collected in ETH on July 1st is assumed for July 2nd for Ethereum.

1. The line graph above shows the average transaction fee per transaction on Polygon and Ethereum by day.
2. Polygon's average transaction fee is around 0.01 USD per transaction, whereas Ethereum's average transaction fee is around 3 USD per transaction.
3. Ethereum's average transaction fee is roughly 300 times higher than Polygon's.
4. This means that the transaction fees paid in 300 Polygon transactions are the same as the transaction fees paid in 1 Ethereum transaction.

1. Polygon collected a total transaction fee of 189k USD from July 1st to July 7th, whereas Ethereum collected a total transaction fee of 22.108M USD.

Conclusion

1. ==Transaction Fee on Polygon and Ethereum by Day (in USD)==

• Daily transaction fee collected on Polygon averages around 25k USD per day, whereas Ethereum’s averages around 3M USD.
• Polygon and Ethereum's transaction fee have a positive correlation, with some deviations on some days.

2. ==Average Transaction Fee per Transaction on Polygon and Ethereum by Day (in USD)==

• Polygon's average transaction fee is around 0.01 USD per transaction, whereas Ethereum's average transaction fee is around 3 USD per transaction.
• Ethereum's average transaction fee is roughly 300 times higher than Polygon's

3. ==Cumulative Transaction Fee on Polygon and Ethereum by Day (in USD)==
4. The transaction fee collection rate/gradient on Polygon and Ethereum is nearly identical, with Ethereum's transaction fee collected magnitude per day being ~ 100X greater.
5. There is a strong correlation between Polygon and the daily transaction fee collected by Ethereum, however, with different scale.
6. ==Total Fees Collected on Polygon vs Ethereum since July 1st (in USD)==

• Polygon collected a total transaction fee of 189k USD from July 1st to July 7th, whereas Ethereum collected a total transaction fee of 22.108M USD.

5. ==Average Transaction Fee on Polygon vs Ethereum by Days in a Week (in USD)==

• Fridays have the highest transaction fees on Polygon and Ethereum, with 32.1924k USD and 3.804M USD collected, respectively.
• This implies that Fridays are the busiest days on Polygon and Ethereum, resulting in higher gas prices and transaction fees collected.

6. ==Average Transaction Fee on Polygon vs Ethereum on Weekdays and Weekends (in USD)==

• Average transaction fee collected by day on both Polygon and Ethereum is higher on weekdays than on weekends.

• The average transaction fee collected on Polygon on weekdays is approximately 18.22% higher than on weekends, whereas the average transaction fee collected on Ethereum on weekdays is approximately 7.6% higher than on weekends.

• This implies that the Polygon and Ethereum networks are busier and more active during the week, resulting in a higher average transaction fee collected per day.

  7. ==Average USDC swap size and distribution of average swap size of swappers.==

• The average Ethereum swap size is approximately 88.34k USDC, whereas the average Polygon swap size is approximately 659.08 USDC.

• The majority of Polygon wallets that swapped USDC had an average swap size of 0 to 100 USDC, falling into the Fish category, whereas the majority of Ethereum wallets fall into the Shrimp category, with an average swap size of 100 to 1k USDC.

• This is due to the fact that Ethereum has a higher transaction fee than Polygon, Ethereum’s swappers will want to complete swaps large enough to save on transaction fees.

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1. The above bar chart shows the average USDC swap size on Polygon and Ethereum (in USDC).
2. The average Ethereum swap size is approximately 88.34k USDC, whereas the average Polygon swap size is approximately 659.08 USDC.
3. Ethereum has a significantly larger average swap size than Polygon. This is appropriate given that Polygon has a much lower gas fee than Ethereum.
4. Due to the fact that Ethereum has a higher transaction fee than Polygon (about 300X greater transaction fee as learned in the first part of this dashboard), swappers would try to make their Ethereum swaps in one lump sum to save on gas fees, ensuring that the swap is worth the gas fee paid.

1. The bar charts above show the the distribution of average USDC swap size of Ethereum and Polygon swappers.
2. We can see that the distribution of average USDC swap size of Ethereum wallets is skewed more to the left than the distribution of average USDC swap size of Polygon wallets.
3. The majority of Polygon wallets that swapped USDC had an average swap size of 0 to 100 USDC, falling into the Fish category.
4. The majority of Ethereum wallets fall into the Shrimp category, with an average swap size of 100 to 1k USDC.
5. This demonstrates that, besides the fact that there are larger wallets on Ethereum, Polygon wallets also tend to swap even with small USDC sizes (< 100 USDC). This is not always feasible on Ethereum, as wallets will want to complete swaps large enough to save on transaction fees.