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Polygon is well-known, particularly in the DeFi community. The network has done well as a Layer-2 scaling solution for Ethereum and has continued to improve in that regard.
So, why is the Polygon development team proposing an increased gas fee structure with millions of users on their hands? And can it be brought down by another chain?
Polygon on the rise
Well that is the case more in terms of network performance, than price action. In fact, yesterday MATIC witnessed an 8% fall. Even though the price performance had been pretty decent in October, yesterday’s fall invalidated the growth by more than 25%. At the time of writing, MATIC was trading at $1.2.
This is despite the fact that Polygon has been putting out solid numbers in the DeFi space. The L2 chain is closing its gap with the Binance Smart Chain (BSC) and the difference is now at just 695k wallets.
However, it won’t be too long before Polygon actually overtakes BSC in terms of total addresses. At the moment Polygon is adding over 970k new addresses every day. BSC on the other hand is only at 172k and Ethereum is further below that.
However, Binance Smart Chain has been improving significantly as well.
Even though Polygon has been adding more addresses, BSC still has the highest number of Daily Active Addresses. The figures have been growing every day and presently DAA reached its all-time highest of 1.345 million wallets.
This incredible rise has also supported daily transactions and consequently, BSC has been clocking in 7.8 million transactions a day. These are the highest figures investors have seen in over 5 months.
However, talking about why MATIC may have fallen yesterday, the reason could have been the announcement that came the day before. On October 9, Polygon’s client development team increased the minimum gas price to 30 Gwei from 1 Gwei.
This change was brought in order to reduce the spam transaction on the network and the investors did not accept it very happily. Their sentiment turned negative, the worst it has been since the May crash.
But presently it’s too soon to declare that this decision will have any negative impact since MATIC did not see any major effect of the change yet. But if the network’s stats continue rising, MATIC could rise higher as well.