TL;DR – While gas fees are high due to network congestion on both Bitcoin and Ethereum, here’s how to use Polygon for cheap, fast transactions.
Stuck in Traffic
Just like being stuck in traffic on the road, network congestion on blockchains causes high gas fees. That’s why L2 solutions like Polygon were created. Gas fees are the tolls you pay for your transactions to be processed on blockchains like Bitcoin (BTC) and Ethereum (ETH). These fees rise due to network congestion.
Recently, gas fees on ETH are at a 12-month high. A significant factor behind this surge is the recent popularity of memecoins, such as PepeCoin (PEPE), SpongeBob token (SPONGE), Dogecoin (DOGE), and Shiba Inu (SHIB). Inspired by internet memes and propelled by social media hype, they tend to create a significant influx of network transactions, thereby driving up gas fees.
Moreover, fees on Bitcoin have recently surged to two-year highs due to the growing demand for block space, in part driven by the rise of ‘Bitcoin Request for Comment’ (BRC-20) tokens and the increasing popularity of the Ordinals Protocol.
The BRC-20 token standard on Ordinals allows users to issue transferable tokens directly through the network. This innovation has sparked a new wave of digital artwork and meme tokens built on Bitcoin, much like what has been seen in the past with NFTs on Ethereum, adding to the congestion and resulting in higher fees. Don’t forget, while meme coins might spike in value, investing in them also carries high risk, as their value can just as quickly plummet.
How can I avoid high gas fees?
So, how can we bypass these high gas fees? Enter Polygon, your path to smooth and speedy transactions.
Polygon is a Layer 2 scaling solution. When blockchains such as BTC and ETH get congested, L2s like Polygon are designed to move traffic faster. They can handle more transactions at a higher speed, and crucially, with lower fees. Picture this: instead of each car (transaction) causing congestion on the main street (blockchain), they’re swiftly diverted to the freeway (L2 solutions), effectively reducing congestion on the main street and leading to faster, smoother rides for everyone.
Polygon to the Rescue: 3 Ways You Can Benefit
Zengo recommends using Polygon for your transactions while gas fees are high. Polygon can be purchased directly through your Zengo app, so there is no need to buy and swap from other tokens. There are several ways you might benefit from this:
Trading NFTs: If you’re an artist selling digital artwork or a collector trading NFTs, the lower transaction fees on Polygon mean more profits in your pocket.
Participating in DeFi: DeFi users can enjoy the benefits of high-speed, low-cost transactions for their financial operations.
Sending Crypto: Whether you’re sending stablecoins to friends or making payments, Polygon’s minimal fees make these transactions more efficient.
With Zengo, the experience of transacting on Zengo is as straightforward as possible, ensuring a smooth transition from the crowded city streets to the open highway. We’re committed to constantly working behind the scenes to ensure your crypto transaction experience is seamless, efficient, and safe.
And remember, if you ever need assistance, Zengo’s 24/7 live customer support is just a tap away inside the app. Whether you’re a seasoned crypto enthusiast or just starting your journey, we’re here to help you navigate towards efficient, low-cost crypto transactions.
Q: Where can I find out more about Polygon
A: More information about what Polygon does, their partners and more can be found on their website.
Q: Can I still use ETH and BTC on Zengo?
A: Absolutely! Unlike centralized exchanges, Zengo will never prevent you from being able to make transactions on any chain we support. While gas fees might be high and transaction times slow, you’ll still be able to use the wallet as usual no matter the network congestion.
Q: How do I see which other assets Zengo supports?
A: In your Zengo app on the home screen, select manage to view your asset manager, and then search in the bar for different tokens.
Disclaimer: remember to always DYOR (do your own research). The above is for educational purposes, not financial advice.