INTRODUCTION

Polygon, Ethereum's most popular layer 2 scaling solution underwent a harfork on 17th of January 2023, aimed at reducing gas fees on the network. This dashboard looks into this event and it's implications on the activity and general health of the polygon network.

WHAT IS A HARDFORK?

A hard fork entails software upgrade that results in a permanent divergence a blockchain structure, creating two separate versions the blockchain that are no longer compatible with each other, to suit different technical needs under different rules than the original network. In general, hard forks are disruptive events that require careful consideration and planning to ensure that they are executed safely and with minimal disruption to users. They can also be controversial, as they often involve competing interests and differing opinions on the direction of a particular project or network.

POLYGON HARDFORK

In the case of Polygon's recent hard fork, the purpose was to implement changes to the network's consensus algorithm, which aimed to reduce transaction fees and increase the network's capacity. This was done to address the issue of high gas fees that were making it difficult for users to use the platform effectively. When a hard fork occurs, users typically have to choose which version of the blockchain they want to use. Some users may choose to continue using the original blockchain, while others may switch to the new version. This can lead to a split in the community and can result in the creation of a new cryptocurrency if the new version gains sufficient support.

KEY DEFINITIONS

List of useful definitions to note. Gas: Gas on a blockchain is a fee paid by users to transact on the blockchain, cloocted as transaction fees by dApps and paids to nodes to secure the network. Layer 2: Layer 2s are sidechains built on top os the Ethereum network, which solve congestion on Ethereum by offering improved transaction enviroment through lower gas fees and faster transactions. Smart Contract: A smart contract is a self executing program that invokes itself on a blockchain when it's preset conditions are met. Transactions : Transactions in blockchains refer to smart contract interactions which can be invoked by either Users(wallets also known as Externally Owned Addresses (EOAs) or by other Smart contracts through interacting with other programs. This is used to track activity on a blockhain. Wallet Activity/Users: Wallet activity refers to transactions by user wallets also known as Externallly Owned Addresses. This is used as a proxy for the number of Users, however, it should be noted that it does not imply that wallets = users Transaction Volume: This is the net worth of transaction activity in monetary terms, usually denoted in USD terms or in terms of the native crytpocurrency of the underlying chain. Blocktime:blocktime metric to determine the minimum blocktime, maximum blocktime and average blocktime it takes to complete transactions on Polygon.

POLYGON HARD FORK