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Traders that understand the key differences between Avalanche (AVAX) and Polygon (MATIC) will also see the advantages each of these advanced networks have to offer. These blockchains leverage high levels of Ethereum compatibility, multi-layered frameworks, and scalability. Here is everything you need to know regarding Avalanche (AVAX) vs. Polygon (MATIC).
What is Polygon?
Polygon originally launched as MATIC before rebranding. The protocol is unique in many ways compared to the competition. For one, Polygon was designed to connect the growing number of Ethereum-compatible networks in a seamless manner. There are over 300,000 ERC-20 tokens in circulation today and Polygon wants to enable these protocols to communicate freely.
Polygon also enables these networks to communicate with other sovereign networks. The advantage of this approach is that it lowers development costs, and improves usability for the entire sector. Developers can leverage other protocols across multiple blockchains using Polygon, which prevents them from needing to create duplicate protocols to serve the same role on another blockchain.
What is Avalanche?
Avalanche is a multi-layered fourth-generation blockchain that supports full DeFi functionalities. The protocol leverages individual layers to separate the smart contract processing from the ledger. This approach enables the network to improve scalability and performance. It also leverages an Ethereum layer that provides a smoother transition for developers migrating to the protocol.
Avalanche introduces a higher level of programmability to the market in multiple ways. For example, the protocol streamlines the creation of application-specific blockchains. Users can leverage multiple custom virtual machines to create more immersive and helpful Dapps. Additionally, the protocol leverages GO which is a popular coding language in the developer community.
What Problems was Polygon Built to Alleviate?
Polygon was built from the ground up to improve the developer experience for Ethereum creators. The protocol is 100% Ethereum compatible which enables creators to leverage the huge library of Ethereum development tools available. They can also program using Ethereum-supported languages and create tokens that meet ERC standards.
Polygon improves security for subnetworks by streamlining the integration process. For example, the network introduces modular security features. Developers can leverage these multi-chain protocols to ensure their system remains protected across multiple blockchains. Additionally, Polygon is open source and has been vetted by the Ethereum community.
What Problems was Avalanche Built to Alleviate?
Avalanche was built to improve developer capabilities. The network is structured to provide lower fees and higher performance than most competitors. Avalanche has some impressive bench test results with developers clocking the network at 6,500 transactions per second. The protocol also enjoys sub-second finality.
Inflation is another concern that AVAX developers wanted to avoid. As part of this strategy, they introduced a host of deflationary mechanics to the blockchain. For example, all transaction fees are burned on the Avalanche blockchain. This lowers the circulating supply which in turn drives up demand.
Gas fees have been a problem for Ethereum users and developers. Gas fees are the cost of paying nodes to execute smart contracts and transactions. Ethereum has suffered from crushing high gas fees this year as congestion from the DeFi movement continues to build. Avalanche provides a lower fee structure due to the network's multi-layered technical structure.
How Does Polygon Work?
Polygon creates a multi-chain ecosystem like Avalanche but with different layers. The network leverages four layers rather than three. The composition of the network provides it with top-notch interoperability with other networks. Providing these networks with secure communication options helps to improve the functionality of all networks.
The first layer is the Ethereum Layer. This layer is what enables Ethereum developers to leverage the same tools when creating Dapps, blockchains, and digital assets. The layer is also responsible for staking protocols. Finally, it's tasked with messaging between networks.
The Security Layer handles validation services for subnetworks. This system is unique because it provides security as a service to subnets. As such, this layer acts as a non-mandatory option for developers. One the core system, this layer handles validator management.
The Polygon Networks Layer is where sovereign blockchains reside. The protocol handles the consensus for the system including block production. The network layer is also tasked when transaction collateral is required. This structure provides more security and better performance as it separates consensus from smart contract execution.
Finally, the Execution Layer has the job of interpreting transactions. It also handles the execution of these transactions. To accomplish this task, the protocol splits into two subsystems. The Execution environment handles virtual machine implementations, while the Execution logic layer handles state transition functions.
The framework enables anyone to create new networks with less effort compared to earlier protocols. The system offers one-click deployment and access to a variety of program modules to make blockchain creation easier than ever. Developers don't need to be coding experts to create blockchains on Polygon. The protocol provides solutions for everything from consensus, to governance. There are even modules that make it easy to integrate staking protocols, dispute resolution systems, and much more.
How Does Avalanche Work?
Avalanche first hit the market in September 2020 with the launch of its mainnet. The system received immediate attention from traders for multiple reasons. For one, the developers, Cornell researcher Emin Gün Sirer from Ava Labs decided to leverage multiple layers to provide improvements on its predecessors.
The X-chain operates as the base layer for asset creation. This layer handles token issuance processes. Users interact with this layer when creating NFTs, tokens, or issuing stablecoins. The flexibility of this layer makes it an integral addition to the network.
The C-chain was built to help improve Ethereum developer onboarding. This conversion chain serves the role of making it easier for developers to migrate their systems from Ethereum to Avalanche. Avalanche is unique in having a chain strictly for conversions. To date, its structure has proven to be very effective at reducing transfer times and onboarding.
The P-chain acts as the admin for the entire system. It handles tasks such as the creation of blockchains and staking features. The P-chain makes it easier to monitor subnets as well. Together all of these layers work to make Avalanche a solid alternative in the market.
Avalanche users can stake their AVAX and secure passive returns. To become a validator node you need to stake 2000 AVAX. If this amount is too much, there are staking pools that enable you to participate at any level. Staking is ideal for traders because it provides consistent returns versus trading.
How to Buy Avalanche (AVAX) and Polygon (MATIC)
Currently, Avalanche (AVAX) and Polygon (MATIC) are each available for purchase on the following exchanges.
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. (Excluding New York & Washington state).
Avalanche Vs. Polygon
Now that you see the main differences between Polygon and Avalanche, you're better informed as a trader. Take this knowledge and use it to improve your trading strategy and secure higher ROIs in the future. In terms of competition, both projects have some unique characteristics that may make them a smart addition to your portfolio.
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