Polygon Witnesses Surge in Gas Fees and Transaction Volume Due to New PRC-20 Standard

Polygon network is experiencing a significant surge in gas fees and transaction volumes following the introduction of the new PRC-20 token standard.

PRC-20, akin to Bitcoin Ordinals' BRC-20, has propelled Polygon (MATIC) to record-high transaction fees and volumes in the past 48 hours. According to Polygonscan data, daily transactions on Polygon have soared from 2-2.5 million transactions per day over recent weeks to 6.1 million transactions on November 15, escalating further to 16.4 million transactions on November 16. This marks Polygon's highest transaction volume in its three-year history, surpassing the previous peak of 9 million transactions in July 2021.

Daily transaction volume statistics on the Polygon network since July 2020. Source: Polygonscan (17/11/2023)

Meanwhile, average gas fees on Polygon spiked to 7,000 gwei on November 16, significantly above the typical range of 200-300 gwei. Consequently, token swap fees on this blockchain network temporarily surged to $5 before subsiding back to $0.5.

The uptick in Polygon's activities is attributed to PRC-20, a new token standard similar to Bitcoin Ordinals' BRC-20. Many users have engaged in minting PRC-20 tokens, most notably POLS—a token set to potentially replace MATIC.

PRC-20 features an "inscription" mechanism akin to BRC-20, utilizing calldata from each transaction to embed images or data into blockchain blocks, thereby transforming them into unique NFTs.

While the development team behind PRC-20 remains unclear, community discussions on platforms like Twitter primarily originate from the Chinese cryptocurrency community.

Polygon continues to prepare for the rollout of Polygon 2.0, including the transition from MATIC to POL tokens, the introduction of a "3 Pillars" governance model, deployment of re-staking mechanisms, and upgrading Polygon PoS chain to layer-2 zkEVM.

Additionally, the project recently announced a $90 million ecosystem development fund and collaborations with OKX to develop a layer-2 solution for exchanges, zkWASM solutions for the NEAR Protocol, and support for the Web3 social network Lens Protocol in implementing its V2 upgrade.

MATIC prices reached highs of $0.98 this week, the highest since late April 2023.

4-hour chart of MATIC/USDT on Binance at 08:10 AM on November 17, 2023.