Try Quests to earn cryptoEVM - 9. Polygon Hard Fork
Project Overview
ETH-scaling project Polygon completed a hard fork last month in hopes of reducing gas fees, as well as disruptive chain reorganizations known as "reorgs,” according to Coindesk. Let’s dive into the network’s health and performance leading up to and since the hard fork.
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Has the software upgrade led to lower gas fees as hoped? Have these changes affected any meaningful user metrics, such as volume, activity, monthly active users, or others?
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Back up your assertions with data.
According to the results, from the end of January to the middle of February this year, there has been a significant increase in the fee of Polygon network. So, with a significant jump, it has reached from 0.018 to 0.08. After that date, there is a significant decrease in the average fee per transaction. In the following, we will investigate and study the possible effects of these events on the network.
- So, the Fork event had a Negative impact on the average Fee !
- As can be seen, from February 22 onwards, TPS has greatly increased as the average fee has decreased.
- Daily average block time has experienced increases and decreases in coordination with avg FEE.
Observations
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From Jan17 to Feb 11, when the average FEE was on the rise, the number of transactions has decreased significantly. After that date, with the reduction of avg FEE, the upward trend of the number of transactions started again. So, the Fork event had a Negative impact on this metric!
Also , there is a Negative and significant correlation between the number of transactions and the average FEE.
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It is surprisingly observed that with the increase of avg FEE, the Transaction Failure rate has also increased dramatically. So, the Fork event had a Negative impact on this metric!
Also , there is a Positive and significant correlation between the Transaction Failure rate and the average FEE.
Observations
In this section, we have tried to take a closer look at the changes in avg fee in different sections of the network on a daily basis. Also, the total daily fee in each sector along with all network transactions are presented at once
- As can be seen, from the first of the year to the middle of February, the average fee has increased significantly in all sectors. But this has been much more severe in the case of Defi Sector.
- As a result, from mid-February onwards, the decline in avg fee for this sector has been much steeper than other sectors.
- Another interesting point that can be seen from the second chart is that from the beginning of the year to mid-February, the Dapp Sector's share of Fee generated in the Polygon network has increased significantly.
Definitions
Trasaction Fee
In order to be considered a successful and valid transfer, every cryptocurrency transaction must be added to the blockchain, the official public ledger of all completed transactions.
This vital work requires computational energy provided by miners, powerful computers that make up a portion of the network and confirm its transactions. The ongoing computing by miners to validate and confirm transactions on the blockchain network gives the network many of its special, decentralized properties. Simply put, it would not nor could not exist without them.
Miners get financially rewarded for the vast amounts of computing power and energy they expend supporting the network. With every block (a collection of transactions) added to the blockchain comes a bounty called a block reward, as well as all fees sent with the transactions that were confirmed and included in the block. [1],[2]
==GAS Price==
Gas is essential to the Ethereum and Polygon network. It is the fuel that allows it to operate, in the same way, that a car needs gasoline to run. Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the network.
Since each transaction requires computational resources to execute, each transaction requires a fee. Gas refers to the fee required to conduct a transaction on netwoek successfully.[3]
Methodology
In this dashboard, we will first , take a look at the situation of Fee in Polygon network as avg and total daily fees generated, as well as fee per block and also the 7 and 100 days moving average to fully understand the probable changes happened in the related metrics.
then, we will survey in the network and study the different parameters of the polygon network and will try to find any probable correlation between the changes in average fee ad network performance metrics like the number of total transactions and users, new users, transaction failure rate and etc. also , at the end of the dashboard, we will take a look at the sectors of the polygon network and their generated and avg fee in new year.
Gas limit
It refers to the maximum amount of gas (or energy) that you're willing to spend on a particular transaction. A higher gas limit means that you must do more work to execute a transaction using ETH or a smart contract.[5]
Gas Used
that's actual amount of Gas that was used during execution. Sometimes it's hard to predict how much Gas transaction will cost, so the actual cost of transaction is computed afterwards. Sender is charged for used Gas and the difference is returned to the sender.[6]
Gas Rate
The ratio of gas used to gas limit.[7]
The closer this ratio is to one, it will indicate the more accurate calculation of the gas limit, and as a result, gas used.
As can be seen, there is a positive and significant correlation between the price of MATIC and the average FEE, and with the increase and decrease of FEE, the price has also changed.
Observations
- From February 4 to 11, when the average FEE was on the rise, the number of active network users has decreased significantly. After that date, with the reduction of avg FEE, the upward trend of the number of users has started again. So, the Fork event had a Negative impact on this metric! Also , there is a Negative and significant correlation between the Number of active addresses and the average FEE.
- Same for the new users, From January 1 to February 11, when the average FEE was on the rise, the number of active network users has decreased significantly. After that date, with the reduction of avg FEE, the upward trend of the number of users has started again. So, the Fork event had a Negative impact on this metric! Also, there is a Negative and significant correlation between the Number of new addresses and the average FEE.
Conclusion
- Transaction fees are an integral part of the digital currency economy in blockchain networks. These are part of the incentives given to users to keep the network active. Fees also act as a layer of protection against malicious behavior and spam.
However, the amount of traffic that some networks face has led to high fees. The decentralized nature of most blockchains makes them more difficult to scale. It is true that some networks have high scalability and high transaction throughput, but this often comes at the expense of security or centralization.
However, several researchers and developers are working on improvements that will hopefully give more ground to market in the development of digital currencies in the developing world.
- In this survey, it was observed that from the beginning of the new year to the middle of February, there has been a significant growth in the average FEE in the Polygon network, and as a result, changes such as a decrease in the total number of transactions and an increase in the failure rate, a decrease in the number of active users and also New users, token price reduction, etc. have happened. After February 11 and with the decrease of the average daily fee, there has been a positive change in the mentioned cases.
- At a glance, it is clear that after January 17, the average Transaction Fee has increased dramatically and has reduced the performance quality of the Polygan network. This is contrary to what was expected from this project!
Observations
- From Jan1 to Feb 11, when the average FEE was on the rise, the volume of Matic transfers has increased significantly. After that date, with the reduction of avg FEE, the downward trend of volume of Matic transfers started again. So, the Fork event had a positive impact on this metric!
- Aslo, there is a positive and significant correlation between the volume of Matic transfers and the average FEE.