$14.75 billion locked in Ethereum bridges, Polygon competes with Arbitrum, Optimism for dominance

By October 13, 2021Layer2
Click here to view original web page at www.fxstreet.com
  • Total value locked across Ethereum bridges hit a high of $14.75 billion as users continue exploring new blockchain systems.
  • DeFi incentive programs, liquidity mining rewards and regular upgrades in the Avalanche, Solana, Fantom and Harmony lure new DeFi projects.
  • Polygon network recently recommended a hike in transaction fees.
  • The layer-2 scaling solution dominates others in terms of total value locked on its Ethereum bridge.

Nearly $15 billion worth of assets are locked on Ethereum bridges. Layer-1 and 2 scaling solutions are competing for dominance as Polygon leads the way.

Polygon captures the highest share of total value locked on Ethereum bridges

Polygon Network, a layer-2 solution connecting Ethereum to other blockchains, recently recommended that validators raise transaction fees to tackle the spike in spam transactions.

A blog post in Polygon’s forum, by co-founder Sandeep Nailwal, reads,

To reduce the number of spam transactions in the network, we are increasing the minimum gas price to 30Gwei from the current (default) value of 1Gwei for our foundation nodes. It’s just a recommendation to increase the gas price, but other validators are free to choose their own min gas price.

Following Polygon’s recommendation, there is a decline in its on-chain activity. Daily average transaction volume on Polygon is slashed from 6 million to 3 million, owing to a 2900% spike in fees.

Polygon has maintained its dominance over Arbitrum and Optimism in terms of total value locked in Ethereum bridges despite the decline. The TVL of all Ethereum bridges sits at $14.75 billion based on data from crypto analytics platform Dune Analytics

TVL of Ethereum bridges since May 2021

TVL of Ethereum bridges since May 2021.

The launch of incentive programs and liquidity mining rewards that attract both users and projects to the platform has played a vital role in the rise of the overall TVL of Ethereum bridges.

A smart contract platform, Avalanche recently announced $180 million incentives for projects building on the AVAX network in a program called “Avalanche Rush.” Harmony protocol announced $4 million in incentives on SushiSwap, splitting half and half between liquidity mining and lending.

Polygon needed to raise their gas fees and safeguard the network from being targeted by foul players. It ensures the long-term health and sustainability of the platform. Despite the fee hike, the network has maintained its dominance; traders expect a bullish impact on MATIC price.

FXStreet analysts have evaluated the MATIC price trend and predicted a 55% rally in a bullish breakout.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

All Today's Crypto News In One Place