A fundamental shift is taking place in the rapidly evolving world of cryptocurrencies and Blockchain technology. The old notion that trading alone can sustain the viability of cryptocurrencies is being challenged. At this point, Travis Hoium, analyst of the US-based consulting giant The Motley Fool, announced the altcoin project that should be avoided. Here are the details…
Analyst: Avoid this altcoin project
As Hoium points out, not all blockchains are created equal. While some, like Solana and Base, are gaining traction with growing user and developer communities, others may find themselves left behind. According to Hoium’s analysis, Polygon (MATIC) falls exactly in the second category. Polygon appears to lack the critical mass of users and developers needed to compete with more advanced blockchain platforms. Hoium’s analysis takes into account several key factors, including current market data from MATIC. One of the main problems Hoium points out is the underlying issue of utility. Cryptocurrencies derive their value from being part of a developing Blockchain ecosystem. However, according to the analyst, Polygon faces a significant challenge in this regard.
GitHub activity, a measure of developer engagement, reveals a striking disparity. Solana has 4.5x more developer activity than Polygon, while Ethereum, the Layer-1 Blockchain Polygon is built on, outperforms Polygon by 10.3x. This discrepancy reflects the different trajectories of developer participation in the Blockchain space. According to the analyst, user transactions on these Blockchains tell a similar story. While Polygon records around 23 transactions per second, Solana processes an impressive 4,000 transactions per second. Users clearly prefer the speed and efficiency of a higher throughput blockchain like Solana.
Polygon is outpaced in speed and cost
Another critical aspect of blockchain performance is speed and cost. Polygon lags behind its competitors in these areas. While the platform states that the average transaction cost is around 1.5 cents, Solana’s transactions are quite cheap at around 0.02 cents. Although Polygon operates as a layer 2 blockchain on Ethereum, offering benefits such as improved speed and developer friendliness, transactions on this layer 2 can still be slow and cumbersome, as evidenced by Polygon’s 30 to 60-minute asset bridging process. But as Hoium underlines, if Ethereum improves its speed, cost, and efficiency, the question arises: Why don’t we develop directly on Ethereum? This issue puts Polygon in a challenging position as a layer-2 blockchain.
In his assessment, Hoium acknowledges that Polygon faces the ongoing struggle of not being able to fully control its destiny as a network that is heavily dependent on Ethereum’s performance. Looking ahead, Hoium believes that layer 1 and certain layer 2 solutions will continue to gain importance as Blockchain development progresses. In addition, the increased use of stablecoins may reduce the value attached to the cryptocurrencies themselves. In conclusion, Travis Hoium’s analysis is clear: Polygon may not be the most promising place for crypto investments right now. However, it is important to remember that this is only analyst opinion.
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