Results

    In this dashboard we will be looking at the correlation between the transaction fees in the Polygon blockchain and diverse indicators as the volume and value of the successful transactions in the period of analysis.

    We will be comparing the transaction fees vs. Ethereum because of the value proposition by Polygon which (according to their official website) is: “a decentralised Ethereum scaling platform that enables developers to build scalable user-friendly dApps with low transaction fees without ever sacrificing on security“

    Two main data sources will be used:

    • polygon.core.fact_transactions: used to track activity in the Polygon blockchain
    • ethereum.core.fact_transactions: same as the previous, in this case but for the Ethereum blockchain

    The time frame of the analysis is comprehended between July 1st 2022 until the day of writing of the dashboard.

    Visualize transaction fees on Polygon since July 1, 2022. Compare these to fees on Ethereum over the same time period - are they correlated? Do they diverge significantly at any points? Provide analysis as to why you think this might be.

    Introduction & Methodology

    Flipside’s Question

    First of all, let’s take a look at the evolution of the transaction fees in both ecosystems in the period of analysis:

    Figure 1 displays how the total transaction fees of both ecosystems reach the lowest value on the 2nd of July, but right after Polygon picks up at a higher pace than Ethereum on the next 2 days and then falls right below.

    However, there is a major flaw in the previous analysis, which is not accounting for the volume of transactions: total fees in Polygon could be driven by a lower number of transactions. In order to mitigate this flaw, we can analyze the average transaction fee:

    As observed in Figure 2, the average transaction fee decreases in July the 5th as it does the total transactions fees. Discarding the assumption of volume as the main driver for total fees, we should move the focus of the analysis to the gas price:

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    In Figure 3 it is observed that the gas price in Polygon stagnates in July 4th & 5th whereas the gas price in the Ethereum blockchain increases.

    In Figure 4 we compare the average gas price against the number of transactions (x axis) and the average value of the transactions (bubble size): we can conclude that despite the average gas price is directly correlated with the number of transactions, the average value of those transactions is also a relevant driver. As seen on Figure 4, there is an exponential-shaped correlation between average gas price and the number of transactions, however, when the average value decreases (comparing neighbor bubbles [x=2.57 , y=115.9] and [x=2.69 , y=115.8]), so it does the gas price.