The Ethereum merge leads to fundamental changes in all altcoins in its ecosystem, not just benefiting its own layer. Analysts at consulting giant Foll are considering an altcoin project that could benefit from it.
This altcoin benefits more from Ethereum merge
Despite the historic rise known as Merge, Ethereum and the overall market failed to gain significant momentum. In fact, most altcoins, notably Ethereum, have lost more than 10%. However, there is another cryptocurrency that benefits more from the merge than Ethereum itself. Ethereum-based layer two scaling solution Polygon is one of the projects that has been waiting for the right time for years. As Polygon becomes more popular, the network’s native crypto MATIC is gathering strength for its former peaks.
Polygon’s increase in value and utility is the result of its role in making Ethereum faster and more affordable. For the past year, Ethereum users have been unable to transact when traffic is high. At the same time, alternative networks became more prominent as fees rose. However, Polygon is not a real alternative to Ethereum. It maintains compatibility with Blockchain so that users and developers can get the best of both worlds. Namely, Polygon’s high speeds and low fees and Ethereum’s security and decentralization.
Some investors used the raise as “sell the news”
Strong hype has been built around the merge since 2015. As a result of this, there is a lot of speculation about what will happen after the merge. Ask any Ethereum investor and he will probably tell you that after the merge, Ethereum will be much cheaper than Polygon.
However, this is not the case. Ethereum’s ultimate goal is to increase scalability. But the switch to PoS does not directly get rid of these high fees and lagging speeds. For this to happen, a technology known as sharding needs to be implemented. The sharding, which will be released in 2023, will split Ethereum into smaller and more manageable chunks. Once this technology goes live, Ethereum will become exponentially faster and cheaper to use.
Polygon can take the leading altcoin project to the next level
For Ethereum to achieve its ultimate goal of being “strong enough to help all of humanity,” it needs to increase its throughput drastically. This is one of the things Polygon can help with. Currently, Ethereum can handle around 20 transactions per second (tps). While this is only an estimate, one of Polygon’s co-founders predicts that sharding will only increase Ethereum to 1,280 tps. Polygon is estimated to reach around 7,000 tps, speeds to support billions of users.
Like nearly every cryptocurrency, Polygon suffered losses in 2022. It has lost more than two-thirds of its value, but unlike some other cryptocurrencies, the Tier 2 solution has significant long-term potential. According to Fool analysts, we’re close to seeing the benefits of Polygon as the merge is complete. However, one should not rush. Even after Merge, Polygon must continue to develop and support Ethereum in the future until it becomes “strong enough to help all of humanity.”
