$14.75 billion locked in Ethereum bridges, Polygon competes with Arbitrum, Optimism for dominance

Nearly $15 billion worth of assets are locked on Ethereum bridges. Layer-1 and 2 scaling solutions are competing for dominance as Polygon leads the way. 

Polygon captures the highest share of total value locked on Ethereum bridges

Polygon Network, a layer-2 solution connecting Ethereum to other blockchains, recently recommended that validators raise transaction fees to tackle the spike in spam transactions. 

A blog post in Polygon’s forum, by co-founder Sandeep Nailwal, reads,

To reduce the number of spam transactions in the network, we are increasing the minimum gas price to 30Gwei from the current (default) value of 1Gwei for our foundation nodes. It’s just a recommendation to increase the gas price, but other validators are free to choose their own min gas price.

Following Polygon’s recommendation, there is a decline in its on-chain activity. Daily average transaction volume on Polygon is slashed from 6 million to 3 million, owing to a 2900% spike in fees. 

Polygon has maintained its dominance over Arbitrum and Optimism in terms of total value locked in Ethereum bridges despite the decline. The TVL of all Ethereum bridges sits at $14.75 billion based on data from crypto analytics platform Dune Analytics

TVL of Ethereum bridges since May 2021. 

The launch of incentive programs and liquidity mining rewards that attract both users and projects to the platform has played a vital role in the rise of the overall TVL of Ethereum bridges. 

A smart contract platform, Avalanche recently announced $180 million incentives for projects building on the AVAX network in a program called “Avalanche Rush.” Harmony protocol announced $4 million in incentives on SushiSwap, splitting half and half between liquidity mining and lending. 

Polygon needed to raise their gas fees and safeguard the network from being targeted by foul players. It ensures the long-term health and sustainability of the platform. Despite the fee hike, the network has maintained its dominance; traders expect a bullish impact on MATIC price. 

FXStreet analysts have evaluated the MATIC price trend and predicted a 55% rally in a bullish breakout.