Polygon has positioned itself as one of the premier Ethereum-aligned scaling solutions. Its proof-of-stake sidechain enables applications which would otherwise be impractical on Ethereum mainnet. The cheap block space has enabled transaction-intensive games, low-cost trades, and of course, spam. This analysis compares the value of Polygon PoS and Ethereum block space and investigates the contracts consuming the most block space from July 1-8, 2022.
Ethereum block space has significantly more value than all other blockchains’ block space combined. You can see the vast difference between Ethereum and Polygon in the next two graphs comparing total fees and fees per transaction. Over the last week, Ethereum has collected approximately 150x more fees than Polygon. Polygon’s cheap block space is good to some extent -- it’s one of the main selling points for the network -- but it also results in lower quality transactions. (If you’re not familiar with the challenges of balancing transaction quality with transaction fees, I highly recommend reading “Transaction quality trilemma” by Polynya.)
To evaluate Polygon’s effectiveness as a scaling solution, you may also want to look at how the fees between Ethereum and Polygon are correlated. The graph below shows a slight correlation. This does not come from users moving their transactions to Polygon when Ethereum fees increase. Instead, each chain enables mostly separate use-cases, correlated by time of day.
You can see evidence of this by looking at which contracts have consumed the most gas over the past week. I’ve forked a query from hildobby’s excellent Ethereum gas dashboard to create the two tables below.
Ethereum’s biggest gas consumers are all well-known NFT or DeFi entities. Each of these contracts has carved out a use-case which justifies the cost of transactions on Ethereum. The top five contracts alone consumed >25% of all gas on Ethereum during the past week.
Meanwhile, Polygon gas is much more distributed between all contracts on the network. The top five contracts are slightly more distributed, only consuming 21% of gas. The value of these contracts are a bit more… dubious as well. The biggest consumer (0xd8d1) was decentralized leverage trading platform Gains Network. But #2 (0x6c88), #4 (0xf061), and #5 (0xf44a) are MEV bots, while #3 is a scam phishing token (0x8782).
Polygon’s low fees have enabled applications which would be impossible on Ethereum due to the high fees. This comes with a tradeoff to transaction quality, though, with spam and other low-value transactions consuming significant block space on Polygon.