New ETH addresses grow, whales and active ones drop

While Ethereum (ETH/USD) addresses increased consistently last year, daily transactions on the Mainnet and the number of whales both declined. Last year, the Ethereum Mainnet added 18.36 million addresses with a positive balance, but Polygon (MATIC/USD) is giving it a run for its money, CoinTelegraph wrote.

Whale wallets have hit a 4-year low

Glassnode data shows whale wallets, defined as those with at least 1,000 ether, have reached a 4-year low of 6,226. Even though ether hit two new all-time highs in 2021, correlation between new addresses and price increase was lacking.

Fewer active addresses

The share of active addresses on the Ethereum Mainnet has dropped too. On January 1 of last year, they were just over 1% of the total number of addresses. They increased to 1.66% at the end of April, but were down to just 0.86% on February 15, 2022.  

Daily transactions have stagnated at 1.2 million since the end of 2021. The main reasons for this are high transaction and gas fees according to experts. What’s more, there are more and more alternatives to the Ethereum blockchain, which include faster and cheaper level 2 solutions such as Polygon.  

Polygon is a viable L2 alternative

Polygon is an L2 blockchain, which means it’s built on top of an existing chain – Ethereum. Ethereum is a level 1 legacy chain with lower performance capabilities. Polygon can be seen as analogical to Bitcoin’s Lighting, an L2 built on Bitcoin (BTC/USD). L2 solutions allow for cheaper and faster transactions than L1 solutions.

Polygon’s advantages have not gone unnoticed by experts such as QuickSwap creator Sameep Singhania, who has supported Polygon since becoming familiar with it when it launched, justifying his decision to build the DEX on Polygon.

Twice the daily transaction volume

Polygon has twice the daily transaction volume of Ethereum. 3 million transactions take place on Polygon every day. However, Ethereum Mainnet still leads by TVL (total value locked) with $124.24 billion, DeFi Llama data show. Terra (LUNA/USD) comes next in TVL with just over $15 billion.

The post New ETH addresses grow, whales and active ones drop appeared first on Invezz.