Ethereum is undoubtedly the largest blockchain ecosystem of protocols, DApps, and protocols. However, it is slow and costly. This has led to the emergence of blockchains that seek to reduce Ethereum gas fees and boost crypto transactions. This is where Avalanche and Polygon come in. The two blockchains seek to connect Ethereum intraoperative blockchains, minimize transaction costs, and increase speed. But which one is better?
Before we compare and contrast the two, here is brief information about each.
About Avalanche and Polygon
Avalanche is an open platform launched in September 2020. It supports the creation of DeFi and other smart contracts applications. Avalanche is often regarded as one of the “Ethereum killers” and most Avax predictions out there expect for the cryptocurrency to strengthen its position on the market during 2022.
Polygon is a layer two scaling solution for Ethereum. It is built on Ethereum and works alongside the slow and expensive blockchain. Polygon had its origin in India, but big crypto investors like Mark Cuban have invested in its ecosystem.
The two blockchains support the creation and interoperability of chains on the Ethereum network. But how do they differ, and which is worth investing in?
Let’s find out.
1. Chains Supported
Avalanches comprise three blockchains with distinct functionalities.
- Contract Chain (C-Chain) Enables developers to easily create EVM compatible smart contracts and port applications.
- Platform Chain (P-chain)- coordinates validators and supports the creation of subnets.
- Exchange chain – Supports trading of assets with AVAX as transaction fees.
On the other hand, Polygon enhances the scalability of the blockchains by supporting multi chains in the Ethereum ecosystem. It leverages validators to perform off-chain transactions before finalizing on Ethereum’s main chain. This significantly reduces strain on the mainnet, effectively boosting speed and reducing transaction costs.
The platform has standalone and secured chains.
- Stand-alone chain – Ethereum compatible and self-sovereign proof of stake chains
- Secure chains – use professional validators to boost security
2. Use Cases
Avalanches have three use cases:
- Pay network fees on the avalanche blockchain. The transaction charges are based on Ethereum’s gas fee model EIP-1559.
- Staking – allows users to participate in the validation and secure the blockchain.
- The third use case is technical and involves using AVAX as a basic account unit for avalanche multiple subnets.
Besides these use cases, Avalanche is home to numerous dApps, gaming, and NFTs. Avalanche also supports metaverse. Avalanche is the fourth largest DeFi with some Ethereum based protocols such as Sushiswap and Aave lending protocol. The protocols have an $11 billion worth of total locked value. The main decentralized exchanges are Trader Joe, with $1.47 billion of assets locked into its liquidity pool.
Similarly, Polygon supports the creation of games, DeFi platforms, and NFTs. For instance, Polygon Studios has migrated games from Web 2.0 to 3.0. Similarly, NFT marketplaces such as Opensea enable the trading of NFTs on the Polygon network. Polygon is also emerging as one of the leading DeFi platforms with $5 billion in total locked value (TVL).
3. Blockchain Projects
Both blockchains have hundreds of projects running on their networks. The projects span Defi, gambling, collectible, marketplaces, social and games. Comparatively, Polygon takes the lead with over 900 projects while avalanche has over 200 projects. Despite this fact, Matic current predictions are not as optimistic as Avalanche.
The biggest project on the Polygon is ApeSwap Decentralized finance, with $5 billion total value assets. On the other hand, Teddy Cash leads on the Avalanche platform.
3. Consensus Mechanism
Avalanches use proof of stake consensus networks. Users with over 2000 nodes can run validators nodes to get AVAX rewards. Stakers with less can join forces to become a single validator. Polygon uses a proof of stake and selects transaction validators randomly.
Polygon has a maximum supply of 10 billion coins, while the total AVAX supply is 395 million tokens. The Avalanche Network has a market cap of $25.7 billion and ranks 10th, followed closely by Polygons at sixteenth place.
An AVAX coin costs $96.22 while MATIC is trading at $1.68. Polygon has a market cap of $12 billion.
Polygon blockchain is way faster than Avalanche, with a processing speed of 65000 transactions per second (TPS) against Avalanche’s 45000 tps.
6. Gas fees
Polygon’s average gas fee is currently $0.000181. In 2021, the price increased significantly after launching Sunflower Farmers play-to-earn game. Polygon’s gas fees surpassed 700 gewi.
The Avalanche base fee varies between 0.001 to 1 avax depending on the subchain. The minimum base fee is 0.00005887 and has no upper bound. Avalanche price hit $10 last year after backers turned Ethereum critics.
Polygon and Avax have numerous similarities. Their growth is not far apart either. In fact, they have a correlation coefficient of 0.82.
However, their growth trajectory is not the same. Avalanche is an incredibly fast smart contract platform. It is also eco-friendly and low cost.
On the other hand, Polygon has a flexible network that supports the creation of multiple chains. It is an easy-to-use platform for scaling and infrastructure development of Ethereum platforms.
The avalanche is already bigger than the polygon and could continue dominating MATIC for quite some time.