What is the difference between Polygon and Ethereum?

Ethereum is a smart contract platform for decentralised applications (dApps) while Polygon is a scaling solution that aims to help ease congestion caused by the number of transactions on Ethereum. Polygon would not exist without Ethereum. 

Ethereum’s purported speed and cost issues are patched by the fast and cheap processing on Polygon’s sidechains, while Ethereum offers the security and user numbers that Polygon currently lacks. 

In light of this, comparing the two networks wouldn’t be entirely fair to either, but here’s how they match up. 

Consensus mechanism 

Ethereum and Polygon reach consensus and confirm transactions using a proof of stake consensus mechanism. 

Transaction speed 

The Ethereum network processes around 10-30 transactions per second (TPS) at current levels, compared to Polygon’s reported theoretical output of 7,200, depending on the sidechain. Ethereum’s co-founder, Vitalik Buterin, said in 2021 that Ethereum may be able to handle up to 100,000 TPS when the upgrade of Ethereum, often referred to as Ethereum 2.0, is complete at some point in future. 

Sidechains such as the ones used in Polygon are designed to be low cost and high throughput.

Tokenomics 

Not all MATIC coins have been released into circulation, but there is a supply limit of 10 billion coins. The network will soon start burning a portion of fees before rewarding stakers, which may give the coin a scarce appeal in future. 

There is no cap on how many Ethereum (ether) can be minted but an update in the network’s merge to proof of stake has on occasion led to more ETH being burned than created when paying validators. It all depends on how busy the network is. 

Architecture

Ethereum consists of one Mainnet, one blockchain, in other words, on which smart contracts are built, whereas Polygon is a multi-level network consisting of multiple sidechains that connect to Ethereum. 

Decentralised vs. centralised 

When people talk about centralised or decentralised governance in cryptocurrency, they usually mean who gets voting rights regarding upgrades and general direction of the network. 

Crypto founders decide at launch how many coins go to developers, how many to initial investors, and how large a stake they keep to themselves, and this ultimately impacts the power distribution within the network. Ethereum founders kept 16% of all Ether distributed at launch, and the Polygon founders decided on the same distribution ratio.  

The level of decentralisation also depends on the distribution of validator rights. The number of validators on Polygon is currently limited to 100 and potential validators have to apply before being allowed to validate transactions. On Ethereum, anyone with enough ether can stake and become a validator. At the time of writing, Ethereum had more than 800,000 validators.

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