Try Quests to earn MATICPolygon Hard Fork
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. 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?
Introduction
What is Polygon?
Polygon (previously known as Matic Network) is a Layer 2 scaling solution for Ethereum that aims to provide faster and cheaper transactions. It is a multichain system designed to be interoperable with different blockchains, including Ethereum and other popular networks.
Polygon Network's technology achieves high speeds by using a unique Layer 2 scaling solution called Plasma. With Plasma, Polygon Network can create multiple child chains that operate on top of Ethereum, effectively reducing the burden on the main network. These child chains can handle a high number of transactions per second, which allows for faster and cheaper transactions.
In addition to Plasma, Polygon Network also employs other scaling solutions like Optimistic Rollups, zk-rollups, and Validium. This allows developers to choose the most appropriate scaling solution for their particular use case, making it a highly flexible network.
Overall, the Polygon Network is focused on providing a highly scalable, fast, and cost-effective platform for developers to build decentralized applications. Its interoperability with Ethereum and other blockchains makes it a compelling option for those looking to create powerful and efficient decentralized applications.
What is Hard Fork?
A hard fork in cryptocurrency is a fundamental change to the protocol that results in a permanent divergence from the previous version of the blockchain. This change can be initiated by developers, miners, or users who disagree with the current rules of the network and want to create a new version with different rules.
During a hard fork, the blockchain splits into two separate chains, and users must choose which chain they want to follow. Nodes that do not upgrade to the new rules will continue to validate transactions on the old chain, while nodes that adopt the new rules will process transactions on the new chain. This can lead to a network split and the creation of a new cryptocurrency if enough users and miners decide to adopt the new version.
Hard forks can be contentious and can lead to community division if not handled properly. However, they can also introduce important improvements to the protocol and address issues with the original codebase.
Methodology
- Collect data on the number of transactions, users, volume, fee and etc. on the Polygon network from before and after the hard fork.
- Analyze the data to see if there are any noticeable changes in the metrics.
- Compare the data to historical trends to determine if any changes are significant.
- Look for any anomalies or irregularities in the data that may be indicative of a problem. I will combine all the findings to draw a conclusion on the effect of the hard fork on the Polygon network's transactions, users, volume, and network performance.
The number of daily transactions shows that on the day the hard fork occurred, that is, January 18, 2023, the number of transactions increased slightly in the first three days.
The price of Matic has decreased in two days after the hard fork, and then it returns to the upward trend.
The number of daily active users, after the hard fork, with a slow upward trend, from 314k on January 19, 2023 to 367k on February 2, 2023.
The number of new users increases daily after the hard fork until January 22. Before the hard fork, the number of new users is decreasing.
One Week Before & After Hard Fork
The percentage of successful transactions in the week after the hard fork is equal to 96% and in the week before the hard fork is equal to 93%, which indicates that the performance of the network has improved after the hard fork.
Daily matic volume chart reaches 51.7m on January 18, 2022, the day the hard fork happens.
On February 8th, the amount of matic volume increases a lot (99.58m) and continues until February 13th. On February 12, 2023, its value will reach 108.7 M matic. Therefore, the hard fork has had a great impact on increasing the volume.
The average volume value per transaction has also increased after the hard fork, reaching 16.75 on January 18, 2023, and has been on an upward trend since February 4, reaching an average value of 43.11 on February 12.
Before the hard fork on January 14, the average transaction fee is 0.041. After the hard fork, it will reach 0.031 on January 18, 2023, and then it will decrease, and its increasing trend will start on January 28, and it will reach its highest value on February 11, i.e. 0.089. However, it seems that we need a deeper analysis to draw conclusions about transaction fees, which we will see below.
The relationship between hard forks and transaction fees is indirect, but it can be affected in several ways. Firstly, a hard fork can result in changes to the transaction validation rules or the block size limit, which can affect the transaction fees that users need to pay in order to have their transactions confirmed by miners.
The number of transactions comparing the week before and after the hard fork shows that both are almost equal and have little difference.
The number of active users in the week before and the week after the hard fork are almost equal and have little difference, their number is almost equal to 1.15 million.
The amount of matic transaction volume in the week before the hard fork is equal to 314 million, and in the week after the hard fork, it is almost equal to 290 million, the difference of which is almost equal to 24 million, which shows that the amount of transaction volume in the sleep before the hard fork more than.
The percentage of each is equal to:
Week before upgrade: 51.93%
Week after upgrade: 48.07%
The total transaction fee in the week before the hard fork is equal to 497k and in the week after the hard fork is equal to 450k, which account for 52.46% and 47.54% respectively. Therefore, after the hard fork, the amount of fees has decreased, which alone does not mean anything. Therefore, the average fee per transaction for the weeks before and after the hard fork is shown in the chart and results can be obtained from it. Before the hard fork, the average fee is 0.023 and after it is 0.021, so the average fee has decreased a little in the week after the hard fork.
Conclusions
The hard fork seems to have had a mixed impact on the metrics measured in this context. While the number of daily transactions and new users increased, the price of Matic initially decreased before recovering, and the increase in daily active users was slow.
Overall, the hard fork seems to have had a positive impact on the Matic volume, with a significant increase in the amount of Matic volume and an upward trend in the average volume value per transaction.
The data suggests that the hard fork may have had a temporary positive impact on transaction fees, with a decrease in the average transaction fee immediately after the hard fork. However, the subsequent increase in transaction fees indicates that other factors beyond the hard fork may have played a role in influencing transaction fees during this period.
The week before and after hard fork; the hard fork did not have a significant impact on the number of transactions and active users. However, there was a decrease in the amount of Matic transaction volume in the week after the hard fork compared to the week before.
The percentage of successful transactions in the week after the hard fork is higher than the week before the hard fork, indicating that the performance of the network has improved after the hard fork. Specifically, the percentage of successful transactions in the week after the hard fork was 96%, while in the week before the hard fork it was 93%.