Over the past decade, the rise of blockchain and smart contract based platforms has begun to shape what is now known as Web 3.0. In this scenario, Etheruem and Polygon play an important role.
Ethereum, the current leader
Others often throw around terms like metaverse, but the basic vision is the same: a multitude of platforms, services and digital worlds that interconnect and can move data and value between them. Currently, many competing projects are attempting to develop blockchains capable of achieving such a future.
Ethereum is currently leading the pack. And no matter how hard they try, competitors have not been able to knock Ethereum off its throne. However, Ethereum, in its current form, is not ready for prime time. Fortunately, scaling solutions such as Polygon already exist and are maturing to the point where Ethereum will be able to realistically handle anything Web 3 sends its way. The collaboration between Polygon and Ethereum reinforces Ethereum as the only choice for DeFi and NFT development.
The current state of Ethereum
There are many reasons to continue to believe in Ethereum's position at the top of the DeFi pack. First of all, it remains the second largest cryptocurrency in terms of market capitalization, and based on current trends, that doesn't seem to be changing anytime soon. The majority of decentralized exchanges, decentralized applications (dapps) and blockchain-based video games also leverage Ethereum's global network. In fact, the Ethereum network has 7 of the top 10 decentralized applications deployed across the ecosystem right now, and many of them also use Polygon to avoid gas charges and increase throughput.
There's also the fact that Ethereum has been around longer than many of its competitors, is generally more reliable and better understood, and has many more quality developers. After all, Ethereum has been tested over time with a high volume of popular platforms and has always come out on top.
Furthermore, with the upcoming upgrades to Ethereum 2.0, there is only more reason to be optimistic. The move from Proof-of-Work (PoW) to Proof-of-Stake (PoS) will not only speed up the network, but also remove the noticeable carbon footprint that other networks, like Bitcoin, struggle with. On top of that, a process called "sharding" will split each block into 64 shards that can be validated in parallel, massively improving the speed and scalability of the system.
Ethereum 2.0 is not yet fully deployed, but progress is rapid. For now, the price of gas can get quite high under heavy traffic, which can have problematic effects on popular dapps and decentralized exchanges. When fees spike, they can significantly reduce the profits of liquidity pools and yield generation services, which are the backbone of the DeFi ecosystem. Fortunately, while we wait for Ethereum to upgrade, there is already a solution to all of this today.
Polygon makes DeFi and NFT work now
Polygon is what is known as a "tier 2 solution," also known as a "sidechain." In essence, Polygon is a separate blockchain designed to interact with Ethereum and relieve the main chain of much of the transactional pressure. This means that transactions can take place on Polygon but ultimately settle on Ethereum, maintaining security but massively improving throughput and reducing fees. While Ethereum has a cap of about 300,000 transactions per day, Polygon has a consistent average of 7 million transactions processed per day.
Additionally, as a pioneer in the DeFi and NFT sectors, NFTs on Ethereum are often considered much more prestigious and, therefore, often more valuable than offerings on competing chains. This is evidenced by the fact that almost all of the most expensive NFTs ever sold exist on Ethereum. Now, Polygon is helping to share the burden of the resulting NFT boom by reducing gas fees to ensure that barriers to entry remain low. More than 1,000 Dapps have already been deployed on Polygon's core network, including the DeFi Dapps Aave, Curve, Sushiswap, Pool together, and the Opensea NFT platform.
Polygon is not just another channel, it is a protocol for deploying new channels as needed. This means that it is scalable more or less indefinitely, and by extension, Ethereum evolves as well. What's more, all of these scaling advantages will compound the scaling of the Ethereum backbone. The more Ethereum accelerates, the more Polygon strengthens it.
In addition, Polygon also offers developers an SDK that allows them to deploy their own custom chains for a variety of applications that will be fully compatible with Polygon and Ethereum. The potential to accelerate the creation and expansion of new services is significant, as new projects will no longer need to reinvent the wheel to take advantage of these benefits.
Polygon and Ethereum against other blockchains
Other powerful advantages of Polygon include the fact that these sidechains can be designed to serve as gateways to other blockchains. This means that competing smart contract platforms like Solana or Flow can effectively be "leveraged" via the Ethereum blockchain, integrating them into the ecosystem. While probably a long way off, this level of interoperability would help bring visions of a singular Web 3 and metaverse to fruition.
While Polygon seems to be focused on scaling Ethereum for the foreseeable future, competing chains will undoubtedly clamor to be "side-chained" by the project itself, especially as the industry as a whole enjoys greater adoption.
Flow, for example, uses the Cadence smart contract language to provide developers with scalability. However, this remains a barrier to entry for most, as they have to learn a relatively foreign coding language. Polygon, on the other hand, only requires the developer to switch their RPC to Polygon's core or test network to provide developers with scalability, composability and interoperability.
Polygon essentially allows developers to do what they would have been able to do on Cadence with much less difficulty. In addition, Polygon has a full suite of SDKs, chains, and rollups to allow developers to heavily customize the scalability solution their dApp uses.
Similarly, the Algorand ecosystem is not as diverse as Polygon's, with fewer dapps, fewer leading DeFi building blocks, data oracle, and NFT infrastructure. It is not Ethereum-compatible and does not inherit the security guarantees of Ethereum's main chain. In contrast, Polygon is fully interoperable, composable and scalable as an Ethereum-based commit-chain.
Polygon also has more than 1,000 DeFi lego bricks, data oracles, NFTs and decentralized data storage infrastructures deployed in its ecosystem. At the time of this writing, Polygon has almost 200 times more transaction traffic on the network than Algorand (50,000 blocks per day vs. 100,000,000) and a block time that is 2.4 seconds faster (4.4 s vs. 2 s). The average transaction cost is also about 25% lower ($0.002 versus $0.0015). Polygon therefore has an advantage in both its ease of use and its ecosystem, in addition to its security guarantees.
The industry is listening
These potentials are not theoretical either, they already exist. Polygon has over 600 more gaming and NFT dApps than any other blockchain outside of Ethereum. In addition, the number of daily active users on Polygon is higher than any other blockchain, including Ethereum. There is also the fact that many virtual worlds in development, such as Decentraland, the Sandbox, and others, are already Polygon-enabled, as are major DeFi services such as Aave and Balancer.
Taking all of these points together, it is safe to say that the backbone of the upcoming metaverse is already in place. While other projects are set to become part of an ever more diverse ecosystem, it seems plausible that the Ethereum blockchain, in tandem with Polygon, will become the most important factor in the evolution of Web 3.0. There is still work to be done, but the roots are in place, as are the mechanisms for scaling, and perhaps most importantly, a thriving community. There could still be upheaval, as the future is uncertain, but until then, it doesn't look like the Ethereum Virtual Machine is ready to disappear.
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