Yield Farmers are Migrating to Polygon

Key Takeaways

  • The number of daily users on Polygon is growing fast, with the Layer 1 scaling solution recently surpassing Ethereum in the number of daily transactions.
  • Ethereum-native protocols such as Aave, SushiSwap, and Curve led the way for Ethereum users to migrate to the network.
  • Polygon is an Ethereum scaling solution and is in direct competition with Binance Smart Chain.

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Polygon offers a similar yield farming experience to Ethereum mainnet at a fraction of the cost. Key metrics show that DeFi power users are starting to migrate to the network.

Low-Cost DeFi on Polygon

High gas fees are pricing regular investors out of DeFi on Ethereum. As the price of ETH has risen, gas fees have also surged, casting doubts over the possibility of a second DeFi summer.

Ethereum’s popularity has helped drive gas prices to record highs even with organizations like Flashbots working to reduce blockchain congestion. Some users have turned to Binance Smart Chain, though that network has suffered from a variety of issues such as hacks and flash loan attacks.

In the search for low fees and fast transactions, many yield farmers have turned to Polygon, the Ethereum scaling solution that’s sometimes described as a “commit chain.” Polygon uses a Proof-of-Stake consensus algorithm, and transactions on the network cost fractions of a cent.

Daily users on Polygon. Source: Nansen.
Source: Nansen

The growth in the number of daily active addresses has been accompanied by an impressive rise in the price of Polygon’s native token, MATIC. Over the last 30 days, the token price has increased by more than 300%, according to CoinGecko. The number of transactions on Polygon also surpassed Ethereum for the first time on May 2, with leading exchange Quickswap accounting for most of the volume.

According…

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