Surge in Polygon Transaction Fees Amid Token Issuance
Date: 2023-11-19 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
Increased Activity Spurs Transaction Fees Surge
The Polygon network, a widely utilized Ethereum sidechain, has witnessed an unprecedented surge in daily transactions, resulting in a notable spike in gas fees over the last 24 hours. Activity within the network soared, with transaction volumes skyrocketing from 2.89 million to a historic peak of 6.1 million between November 14th and 15th, marking the highest recorded since October last year. This surge in network utilization prompted a sharp increase in transactional costs, with average transaction fees surging to over 7000 Gwei (from 100 Gwei a day earlier), subsequently decreasing to approximately 400 Gwei.
Token Exchange Costs and the Ordinals-Inspired Tokens
The escalated transaction costs, particularly concerning token exchanges within the blockchain, surged to $5 for swaps, significantly surpassing the typical rates within the network. Presently, this figure has dropped to less than $0.50. However, even amid escalating transaction fees, the cost of transactions within the Polygon network remained lower than in the Ethereum mainnet, where token exchange costs can range from $30 to $50.
PRC-20 Tokens and Inspired Protocol
Participants within Polygon attributed this surge in activity to a new type of tokens referred to as "PRC-20," a token standard within Polygon inspired by Ordinals. Users were observed extensively minting PRC-20 tokens named POLS, generated through transactional calls in the Polygon blockchain, deviating from the conventional ERC-20 token standard.
This mechanism drew inspiration from Ordinals, a protocol designed for token and NFT generation within the Bitcoin network. However, PRC-20 on the Polygon base employs a different strategy, utilizing transaction call data to generate tokens or unique artifact-like images similar to NFTs, embedded within network transactions.
Token Deployment and Previous Initiatives
Developers had previously launched tokens on the Ethereum network in June, utilizing a similar Ordinals-based protocol under the name Facet.
This surge in activity and the consequent rise in fees shed light on the burgeoning interest and adoption of alternative token issuance mechanisms, especially within the Polygon ecosystem, driving transactional dynamics and fees to unprecedented levels.
