The pioneering first-generation blockchain Bitcoin has initiated groundbreaking changes in the fintech industry, changing the way finances are controlled. The second-gen blockchain Ethereum has contributed with two key innovations: smart contracts and the ability to create decentralized apps and more powerful cryptocurrencies.
Despite Ethereum’s dominant position in the market, there are dozens of decent third-gen networks that can compete with this blockchain. Polkadot and Polygon are among them They offer a smooth user experience at greater scalability and interoperability.
If you’re currently considering which of the blockchain networks would be the best fit for your project – you’ve landed on the right page. In this article, we’ll review the specifics of Polygon, Polkadot and Ethereum blockchains and identify how they can benefit your project’s performance.
Let’s dive in!
Polygon vs Ethereum vs Polkadot: How They Differ
Before we start digging into the specifics of each Network, let’s start with an overall comparison of each blockchain network. As you can see from the table below, there is an obvious difference between Ethereum and its 3rd gen successors, Polkadot and Polygon:
Now that you’ve seen the specifics of all three networks let’s review the potential of each in detail. Below we’ve outlined the key information about Polkadot, Polygon and Ethereum to help you find the best blockchain solution for your project.
Ethereum Blockchain: Overview
Market Cap: $156.12 billion
Ethereum has greatly contributed to changes in the market, switching the focus from cryptocurrencies as simply an equivalent form of money to them being viewed as an integral component of dApps. In fact, this network remains the world’s largest dApp ecosystem, and the second-largest PoW (Proof-of-Work) in the world, second only to Bitcoin.
Today, the Ethereum development environment in blockchains remains the top choice for thousands of projects. However, despite its superiority there are still some technical restrictions to know before getting on board with it.
How Does It Work?
Ethereum is a Proof-of-Work (PoW) network that relies on miners to approve transactions and validate the state of the network. Thanks to its “smart contract” programs, the blockchain enables automating the execution of an agreement so that all participants can be immediately certain of the outcome. This is done without downtime, fraud, control, or interference from any third party. The cost of executing these programs is called gas and the amount needed depends on the complexity of the particular smart contract.
There is an upgraded version of Ethereum – Ethereum V2 – which was introduced in September 2022. The network switched from PoW to Proof-of-Stake (PoS) consensus mechanism, which reduces its operating and validating costs.
Pros and Cons of the Ethereum Network
If you’re considering the Ethereum blockchain for your project, make sure to review its strengths and weaknesses in advance.
Pros of Ethereum for Business:
- Decentralized design
- Rapid deployment
- Private transactions
- Large community
- Zero downtime
- Ethereum 2.0 is coming
- Lower scalability
- Comparatively expensive gas fees
- Proof-of-Work mechanism (currently)
- Transaction privacy issues
Ethereum Blockchain Projects
Overall, the network is commonly used for building decentralized applications, projects based on smart contract programs and those connected to peer-to-peer payments. Therefore, it is no wonder that it is being used by the world’s largest companies such as JPMorgan, Microsoft, Amazon and more.
Being an established network, Ethereum works perfectly for the DeFi industry, particularly for dApp project development. However, you can also find this blockchain in finance, NFT, healthcare, education, real estate, gaming and many other industries as well.
Some of the most popular Ethereum-based projects today are Compound (DeFi borrowing and lending platform), NFT (a token mining platform), The Sandbox (the metaverse-equivalent of Minecraft), Opensea (an NFT trading platform) and so on.
Project ideas to create on Ethereum: metaverse platforms, DeFi protocols and DEX solutions, automated market makers (AMM), crypto exchange aggregators, web browsers, NFT marketplaces and others.
Polygon Blockchain: Overview
Market Cap: $7.93 billion
The Polygon network is a third-generation blockchain that, unlike Ethereum, utilizes a PoS consensus model – a more efficient and environmentally friendly one than PoW. Another unique point about Polygon is that it’s built on top of Ethereum and has greater scalability compared to its 2nd-gen precursor. Moreover, since MATIC is an ERC-20 token, it is fully compatible with other Ethereum-based digital currencies.
Overall, using the Polygon platform can increase the projects’ flexibility, scalability and sovereignty. At the same time, it ensures security, interoperability and structural benefits similar to the Ethereum blockchain.
How Does It Work?
The Polygon network operates based on the Ethereum blockchain and is aimed to connect Ethereum-based projects. Despite its stereotype of being an “Ethereum killer”, it was initially designed to first help expand efficiency, security, size and usefulness.
Simply put, Polygon applies a variety of technologies to create a speedy parallel blockchain linked to the main Ethereum-based blockchain. Overall, the PoS structure of MATIC allows users to earn money on it via staking, based on two essential components: validators and delegators. Validators are used for verifying new transactions and adding them to the blockchain, while delegators stake the Polygon token indirectly through trusted validators.
Relatively fast and cheap transactions of this network make it an excellent choice for decentralized exchanges, yield-generating lending and savings protocols and even some play-to-earn games.
Pros and Cons of the Polygon Network
Though Polygon is known as a fast-growing ecosystem with obvious advantages over Ethereum, we suggest checking its major benefits and drawbacks to get a better idea of its potential value.
Pros of Polygon for enterprises:
- Low gas fees and faster transaction speeds
- More efficient performance and a smaller carbon footprint
- Quick scalability and staking rewards
- Compatibility with the Ethereum mainchain
- Improved security
- Modularity, which is beneficial for adding functions.
Possible Drawbacks to consider:
- Reportedly less secure
- Less popular
- Enables interoperability only between the sidechains deployed in Polygon
Talking about Polygon-based projects, we must admit that the blockchain has really good potential in business development. One of its key advantages is the ability to scale, which is extremely important for numerous dApps. Additionally, the Polygon network features better computation power and smooth compatibility with Ethereum. This is an essential factor that can’t be overlooked.
Thanks to its numerous advantages, this blockchain solution can connect payment systems, DEX, AMM, and other applications at lower costs. Some of the most popular projects that use the Polygon ecosystem for their operation are AAVE, Curve, QuickSwap, SportX, Clover Finance, and many others.
Overall, the blockchain network is expected to have a huge advantage on the NFT and DeFi markets over Ethereum.
Types of Polygon-based projects to consider: dApps, file storage services, decentralized protocols, trading platforms and prediction markets, DEX solutions, and many more.
Polkadot Blockchain: Overview
Market Cap: $6.17 billion
Polkadot is a flexible decentralized network that is aimed to provide a secure connection for blockchains. Introduced in 2020, it became famous due to its unique parachain model, which handles transactions quickly, securely and at lower costs.
What makes it so popular in the software development area? Engineers can build and launch their own tokens, as well as transfer any type of data or assets across the blockchain environment. This opens up a wide range of opportunities to interact with blockchain in the Polkadot network.
Moreover, the launch of parathreads makes it possible for blockchain-based assets to directly communicate with each other and share data. The ability to solve blockchain isolation through a secure, interoperable platform is one of the most prospective advantages of Polkadot compared to other networks.
How Does It Work?
The Polkadot platform is based on the Nominated PoS consensus model (as opposed to PoW system Bitcoin uses). In most cases, the blockchain is used to transfer funds between different wallets using a system of public and private key cryptography. Being a shared multi-chain network, Polkadot enables the processing of data and transactions on several chains in parallel. This allows for an increase in transaction speed and interoperability, while reducing the fees and congestion on each shard.
Polkadot is designed to support other blockchains in the transfer of digital data, and resolve scalability and connectivity challenges of different networks.
It is used for payment of network fees, governance voting and validating rights but, of course it offers a lot more than money operating services.
This blockchain is not itself a smart contract platform, but rather a dApp infrastructure for the integration of smart contract programs. At present, Polkadot is valued for its wide functionality, and mostly complements existing blockchains rather than competing with them.
Pros and Cons of the Polkadot Network
What should you know about Polkadot before its implementation? Below we’ve outlined the key points of its advantages and drawbacks to consider.
Pros of Polkadot for business:
- High interoperability and scalability
- Sharding technology
- Proof-of-Stake technology
- Higher staking rewards
- Greater flexibility and no forks
- Multichain architecture
- Smart contracts
Potential Downsides of Polkadot:
- A relatively new token with an unproven track record
- A limited number of parachains that are sold to the highest bidder
- A large learning curve to develop on
- Shared execution space and limited para chain slots
The key specifics of Polkadot-based projects is their easy interoperability with different blockchains, including those that are not part of the DOT network. Some of the most popular use areas for this blockchain are staking and governance.
Developers heavily utilize Polkadot for building applications over existing blockchains, handling front-end and back-end development, as well as numerous maintenance areas.
Here are some projects built in the Polkadot environment you might want to study: Octopus Network (a multichain, interoperable crypto network for launching and running Web3.0 Appchains), Kusama (a scalable network of specialized blockchains), Acala (an all-in-one DeFi hub), PolkaFoundry (a framework for creating borderless and seamless DeFi and NFT decentralized apps on Polkadot), Robonomics (a solution for the storage of more than 1 million IoT digital twins) and many more.
The key project types you can try with Polkadot are decentralized stablecoins, a variety of dApps and DeFi hubs, frameworks for DeFi and NFT app development, and others.
Which Network Should You Choose: Polygon, Ethereum or Polkadot?
With each of these blockchains having its unique characteristics and powerful features, it becomes challenging to make the right decision for your project. So, let’s now take a look at the key architecture points of each network to define which one, Polygon, Ethereum or Polkadot, will fit the bill!
The Ethereum blockchain still heavily relies on the PoW concept. With this, each user needs to cross the level of difficulty to prove the block valid. However, despite its high security level, this impacts the transaction speed, while having considerable fees and large energy usage.
On the contrary, both Polygon and Polkadot are based on the PoS model. According to this, decentralized networks greatly reduce issues related to validity of timestamps, scalability and of course, transaction speeds.
It’s also worth saying that Polkadot actually applies a variation of a PoS concept – Nominated Proof of Stake. This involves two variables, validators and nominators, which greatly contribute to the network’s fairness and high security.
At the same time, Ethereum V2, which was officially introduced in September 2022, plans to switch to a PoS algorithm as well. Due to this, developers expect to see positive improvements in the network’s speed and eco-friendliness.
In terms of transaction speed and scalability, Polygon is currently the absolute winner here. It has the ability to process up to 65,000 tps, which is greater than Polkadot (so far), not to mention Ethereum which is only capable of reaching up to 30 transactions.
However, the Polkadot network is still in its early stages of development. According to its documentation, the blockchain expects to reach up to 1,000,000 tps in the coming years, which will be more than competitive with Polygon.
Similar to Ethereum, Polygon and Polkadot blockchains themselves are decentralized platforms. They allow developers to build scalable user-friendly dApps at a decent level of security. Since it has been on the market a while, Polygon has already proven its value from the standpoint of decentralization.
Polkadot is already being used to connect private and consortium chains, public and permissionless networks, oracles and many other advanced solutions. Additionally, the Polkadot network has been intensively evolving in the development of a parallel decentralized Internet infrastructure (Web3). This is believed to enable users to run a completely decentralized web.
Despite the strengths and weaknesses of all three networks, it is believed that they will co-exist and complement each other in the decentralized future. Developers might leverage the advantages of Polygon, Ethereum and Polkadot while creating particular decentralized projects, such as social media platforms, metaverse or DeFi solutions.
Polygon vs Ethereum vs Polkadot Protocols: The Final Verdict
Although they differ greatly in performance and architecture, Polkadot, Polygon and Ethereum possess huge potential in project development. If your project is not intended to scale and you’re looking for a solid, universal blockchain solution that simply works – go for Ethereum.
However, for those looking for scalability, security and high transaction speed, it’s worth considering Polkadot or Polygon. These third-generation networks are sure to provide a top-notch user experience at lower transaction fees, which is really important for both creators and clients. While Polygon is more Ethereum-based and has a vast community of tech experts around it, Polkadot is a universal solution that works like a bridge between various blockchain networks and can empower your project regardless of its scale or industry focus.
We have researched the specifics of Ethereum and its newer third-gen alternatives, Polkadot and Polygon. However, these are not the only networks being used for a variety of promising projects today.
Whether you need more in-depth expertise about trending networks or are looking for a dedicated team of blockchain developers to get started – contact us right away.
IdeaSoft experts are always aware of the latest trends in blockchain development solutions and are sure to find the best option for your business.
Wait no more, it’s time to burst into blockchain with your innovative project today!