Ethereum (ETH) VS Polygon (MATIC): Which is Better?

Ethereum is one of the most popular and widely-used cryptocurrencies. Much like Bitcoin, it has inspired the creation of several other crypto projects. The introduction of these new projects can leave even some of the most experienced investors confused. To avoid any confusion, here’s an extensive breakdown of how Ethereum compares to Polygon.

History

Ethereum

Bitcoin enthusiast Vitalik Buterin sought to create a blockchain platform that had functions other than just facilitating payments. The result of this was the creation of the Ethereum blockchain in 2015.

Founding Ethereum involved the development of a whitepaper outlining the vision, pitching it at a crypto event, and raising funds via a crowdfunding campaign in 2014.

Polygon

Polygon, which used to be known as the MATIC network, entered the crypto market in October 2017. It was founded by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, two experienced members of the blockchain industry and a business consultant. Prior to moving to the Polygon blockchain in 2019, Polygon was a huge contributor to the Ethereum ecosystem.

 

What Are They, And Why Were They Created?

Ethereum

The Ethereum network is a decentralized blockchain platform. It establishes a peer-to-peer network that executes and verifies smart contracts. Ethereum smart contracts allow participants to transact without a central authority. It was created to allow developers to deploy decentralized applications or dApps.

Since its creation, the Ethereum blockchain has become one of the most favored blockchain platforms for deploying decentralized applications.

Polygon

Polygon is an Ethereum scaling solution and platform for infrastructure development. Basically, Ethereum-based blockchain technology that provides more scaling solutions using a proof-of-stake consensus model, thus making it a POS blockchain.

In order to function, Polygon operates on four different layers, the Ethereum layer, the Polygon layer, the security layer, and the execution layer.

It’s also referred to as a Layer 2 solution, that’s objective is to improve Ethereum chain utility. It doesn’t modify the original blockchain in any way and instead runs parallel to the Ethereum blockchain, accelerating transaction speed and lowering transaction costs, otherwise known as gas fees.

Price History

Ethereum

At the time of writing, Ethereum has a volatility index of 4.01 percent over the last 30 days, illustrating that it has fair volatility. It was priced at its lowest in 2015 when one token cost $0.432979. Its all-time high was in 2021, when Ethereum was priced at $4,878.26 per token. It’s currently priced at $1,280.44.

Polygon

Polygon is considered to be a very volatile asset, which explains why the price has seen a fair amount of fluctuations over the years. At the time of writing, Polygon is priced at $0.927875 per token. It reached its all-time high in 2021 when a single token cost $0.927875. Its lowest price was $0.00314376 per token.

 

Market Cap

Ethereum

As expected, Ethereum is ranked second in terms of market cap. At the time of writing, it has a market cap of slightly over $154 billion. And a market cap dominance of 17.26 percent. This illustrates how powerful Ethereum is in the crypto market.

Polygon

At the time of writing, Polygon has a market cap of just over $8.2 billion. This means it has a market cap dominance of 0.925 percent, leaving it in 10th position in terms of market cap rank.

 

Daily Transactions

Ethereum

Thanks to the rise in the popularity of NFTs, the Ethereum blockchain experienced its highest number of transactions in 2021, having processed 1.7 million transactions in a single day. At the time of writing, it currently averages 1 million transactions a day.

Polygon

Polygon had a boom in transaction activity towards the end of 2021, with the Polygon blockchain processing 9.1 million transactions on June 16th of that year. In 2022, Polygon has been averaging between 2 and 4 million daily transactions.

 

Block Size

Ethereum

Ethereum doesn’t exactly have a block size per se, as it’s blocked by the amount of gas. This means that its block size is its block gas limit. It is limited to 30 million units of gas.

Polygon

Polygon’s Avail has a block size of around 2 megabytes and a block time of 20 seconds.

Similarities

• Both platforms facilitate the deployment of decentralized applications.
• Polygon and Ethereum are readily available on most major trading platforms.
• Both platforms have gas fees attached to transactions.
• Ethereum and Polygon are focused on providing services to other projects.

 

Differences

• Despite their links, Polygon and Ethereum are different blockchain networks
• Polygon can’t be mined, but users used to be able to mine Ethereum.
• Polygon’s token is MATIC, whereas Ethereum’s token is ETH.
• Ethereum has a much smaller total circulating supply than Polygon.

 

Risks

Ethereum

Generally speaking, investing in cryptocurrency is quite a risky venture, as they’re known to be volatile, and Ethereum is no exception to this. Besides volatility, Ethereum, like other cryptocurrencies, is susceptible to hacks, and its security has been called into question since the “Merge.”

Investing in Ethereum requires one to be in a good financial position and to have a high-risk tolerance.

Polygon

Cryptocurrencies are risky in general. However, factoring in the volatility of Polygon, investors aren’t very likely to see a return on their investment. The crypto community supports this notion, with some deeming it to be “unreasonably risky.”

To add to this, there are reports that the Polygon network has been hacked and that criminals made off with a substantial amount of MATIC tokens. Exercise caution if you’re looking to invest in Polygon.

 

Where to Buy

Ethereum

Luckily for crypto investors, purchasing Ethereum is relatively straightforward, as it’s available on many trading platforms. Here are some of the platforms that allow you to purchase Ethereum:

• Binance
• Robinhood
• Coinbase
• SoFi
• Luno
• Crypto.com
• Bybit
• OKX
• Easy Crypto
• Kraken

Polygon

Given its market cap rank at the time of writing, it’s evident that Polygon has a relatively strong position in the market. As a result, it can be bought via a multitude of exchanges:

• Coinbase
• Kraken
• Crypto.com
• KuCoin
• Binance
• OKX
• Bybit
• East Crypto

 

Exchanging Ethereum for Polygon

Exchanging Ethereum for MATIC is an incredibly simple process. After you purchase either coin using another crypto or fiat currency, you simply have to run a quick Google search to find the right platform for the exchange. Note that platforms will have different levels of exchange support and transaction costs.

LetsExchange, HitBTC, CoinCodex, and SimpleSwap, all allow users to exchange Ethereum for Polygon.

Future Plans

Ethereum

Ethereum has had a clearly defined roadmap for a significant amount of time. As expected, it involves upgrading the Ethereum platform; a venture sometimes referred to as Ethereum 2.0. More specifically, Ethereum’s developers are looking at three areas, security, sustainability, and scalability issues.

This means that they want the platform to support 1000s of transactions per second, have an extra security layer, and become less energy-intense.

Polygon

The Polygon network has clearly outlined what its plans are. Its plans include support for CSV responses, APIs for pricing and reference data, adding an endpoint to query snapshot data, and adding more data to the financials endpoint.

Adding more data to the financials endpoint can help the analysis of company fundamentals and aid performance comparison.

 

FAQs

Is a volatility index accurate?

While a volatility index can be a good indicator of the viability of an investment, it doesn’t measure volatility precisely. Studies on the volatility index have found that it tends to overestimate volatility by around 4 to 5 percent, on average. You should therefore use it as a guideline and not take it too wholeheartedly.

What is a roadmap?

A roadmap is an outline of a project’s plans. It outlines the project’s short and long-term objectives inside a changeable timeline.

Are NFTs a good investment?

Many people have invested in NFTs due to their financial potential and have found doing so to be lucrative. However, the viability of investing in NFTs does come down to your risk tolerance. The criteria with which NFTs are valued are still quite subjective and unclear, so investing in NFTs can be a risky enterprise.

What are gas fees?

Gas fees are simply transaction fees on a blockchain network. They are paid to network validators as compensation for their services to the blockchain. Gas fees incentivize people to stake their Ethereum. Without gas fees, the network wouldn’t have much security.

Lastly, gas fees can be categorized into one-time fees and recurring fees; ensure you know the difference prior to transacting.

What is stateful architecture?

This refers to a structure that allows users to store, record, and return established information and processes over the internet. It involves transactions that are performed by leveraging past transactions as a reference point. This is not to be confused with stateless networks.

 

Sources:

https://buybitcoinworldwide.com/ethereum-volatility/

https://www.spiceworks.com/tech/cloud/articles/stateful-vs-stateless/#:~:text=Stateful%20architecture%20or%20application%20describes,transactions%20as%20a%20reference%20point.

https://www.investopedia.com/terms/g/gas-ethereum.asp#:~:text=A%20gas%20fee%20is%20a,and%20help%20secure%20the%20network.

https://finance.yahoo.com/news/good-move-invest-nfts-114445204.html#:~:text=Many%20invest%20in%20NFTs%20due,resale%20value%20of%20these%20assets.

https://polygonscan.com/chart/tx

https://polygon.technology/blog/polygon-avails-ability-to-scale-where-we-stand-today#:~:text=Currently%2C%20Avail%20has%20a%20block,(420%20transactions%20per%20second).

https://polygon.io/product-roadmap

https://screenrant.com/difference-between-ethereum-polygon-what/