Introduction

Polygon (MATIC) is an Ethereum-based blockchain, combining the strengths of underlying Ethereum infrastructure with the selling points of L2s such as the environmental advantage of PoS, and significantly lower transaction fees.

Methodology

This analysis examines transaction fees on Polygon from 1 July 2022 until the time of analysis (8 July 2022) in MATIC, and compares them with mainnet Ethereum transaction fees in ETH for the same period.

Are Polygon fees seeing the same trend as L1 Ethereum fees, or not, and what are some possible reasons for this?

To further enrich the exploration of this question, the dashboard examines fees against the number of transactions and unique transacting user wallets on the two blockchains.

Insights

• Visualization 1: Ethereum daily average fees dwarf the fees on Polygon (converted to ETH equivalent). To see the dynamic in both chains’ fees and not only Ethereum, the next chart plots each blockchain’s fees in native currency (MATIC vs. ETH).
• Visualization 2: Transaction fees on Polygon and Ethereum were moving closely in sync at the start of July 2022 (July 1-4), but have diverged starting from July 5, showing perfectly opposite direction movement on July 5-8. Why might that be the case, and what are transaction fees related to?
• Visualizations 3 and 4: These charts look at transaction fees on each blockchain against that chain’s transaction count and unique wallet count.
• This week was an important one for Polygon with several notable partnership announcements and launches, including:
  • integration with Robinhood to enable their no-fee crypto transactions,
  • Reddit NFT marketplace launch,
  • announcement of a partnership with web3 company Nothing to launch a web3 smartphone.
• These events likely played a role in Polygon transactions not dropping significantly, despite the drastic downward trend of transactions on L1 Ethereum. But what could have contributed to the drop in Polygon fees? In the past, Polygon had raised the gas price to reduce spam transactions. This time, it is possible that the introduction of no-fee crypto transactions on Robinhood, among other factors, contributed to lowering the average Polygon transaction fee.

About

• Date: 8 July 2022
• Author: mar1na (catscatscode): Twitter, Flipside
• Bounty: Flipside Crypto “Polygon Fees”
• Image sources:
  • (two images, top right corner)
  • (bottom right corner of dashboard).