Polygon and Ethereum are two of the most popular proof-of-stake networks for on-chain users to trade with DeFi, or engage with the metaverse through GameFi in NFTs. But, some investors do get confused with respect to what is the difference between both chains.
This guide is intended to help you decipher the differences between Polygon vs Ethereum.
- Largest Smart Contract Platform by Market Cap.
- Most Value Locked in DeFi with $34.4B on-chain.
- Safest and most Decentralized Layer 1 network.
Polygon vs Ethereum Overview
Polygon and Ethereum are both prominent blockchain projects with distinct objectives. Ethereum is an open-source, public blockchain platform supporting smart contracts and decentralized applications (dApps). It enables developers to create digital assets, decentralized exchanges, lending protocols, and stablecoins. On the other hand, Polygon is a scaling solution for the Ethereum network, designed to address its scalability challenges. By employing second-layer solutions like Plasma, Optimistic Rollups, and zkRollups, Polygon increases transaction throughput and reduces costs.
Polygon is built to be Ethereum-compatible, allowing developers to deploy dApps without altering their code. As such, Polygon serves as a complementary layer to Ethereum, enhancing its scalability, security, and interoperability. Together, these projects offer a potent combination that fosters a robust ecosystem for decentralized applications.
Blockchain Transaction Fees
One of the primary differences underpinning Polygon vs Ethereum are the transaction fees. Polygon is a Layer 2 network that sits on top of Ethereum and borrows its security. This ultimately makes Polygon a slightly less ‘secure’ network, but makes up for it with extremely low transaction fees.
Polygon vs Ethereum: NFTs
Recently, the OpenSea platform has added support for Polygon NFTs as well as Ethereum NFTs. The addition of Polygon NFTs was due to the fact that the cost to swap on Ethereum became too expensive for normal investors and they needed an alternative.
Although Polygon is a cheaper alternative, the NFTs available on their network are significantly worse and have little cultural significance. All of the main popular NFTS like Cryptopunks, Bored Ape Yacht Club, Azuki’s and Pudgy Penguins live on Ethereum and are not available on secondary chains like Polygon.
Polygon vs Ethereum: DeFi
If you are managing under $1 million of capital, it is inefficient to use DeFi products on Ethereum because the cost to deposit and withdraw coins or liquidity is too high. The gas fees on Ethereum end up significantly reducing your yields, and subsequently making your yield farming on the network redundant.
For example, you can use the AAVE platform on Polygon instead of Ethereum and earn the same yield, while paying significantly less transaction fees. Polygon is by far the best way to interact with DeFi for smaller accounts for this reason.
Polygon vs Ethereum: GameFi
Because the cost to transact on Ethereum is so high, the gaming sector has completely moved away from the ETH blockchain. We have seen popular GameFi games like CryptoRaiders and CryptoUnicorns move natively to the Polygon blockchain thanks to the sub 1-cent fees and fast finality.
This ultimately means that if you are looking to play blockchain games, Polygon is your best bet here again.
In conclusion, Polygon and Ethereum are distinct yet complementary blockchain projects, each catering to specific needs within the decentralized ecosystem. While Ethereum focuses on providing a platform for dApps, smart contracts, and digital assets, Polygon addresses Ethereum's scalability issues, offering faster and cheaper transactions.
Both networks support DeFi, NFTs, and GameFi, but Polygon outshines Ethereum for users with smaller capital and those looking for lower transaction fees. As a result, these two networks together forge a powerful synergy, promoting the growth and success of the decentralized space.