Polygon vs Arbitrum: Ethereum’s Layer-2 Solutions (2024)

When considering “Polygon vs Arbitrum”, did you know that there is a withdrawal difference of hours vs. weeks between the two? There’s also a difference between the transaction fees of the two solutions. Ethereum is an extremely promising technology that has the potential to disrupt many different industries as it has done so already.

One of the challenges that any network, or company attempting to build on Ethereum faces, however, is how to scale the network efficiently so that it can support a high number of end users or customers without buckling under its weight. An essential part of scaling the blockchain is adding layer-2 solutions. This helps to increase capacity by reducing traffic and computational operations on the primary chain or the first layer and moving activity to side chains or in better terms, layer-2 solutions.

Between gas fees, clogged networks due to high demand, and sequencer issues, there are a lot of arguments made about the stability and hype of technology centered around both options. Keep reading as we lay out the technological differences between the two.

What Is Polygon?

Polygon is a layer-2 solution of Ethereum and it’s made for scalability. The reason for its design was to help address the variety of challenges that Ethereum presents.

This includes things from high fees to lower transaction counts per second. You might know the polygon as “Matic Network” but its identity changed in 2021 during rebranding. The Matic token helps secure the Polygon network and they are available across multiple exchanges and are best for long-term investors.

Given that it’s a layer-2 network, Polygon’s meant to act as an add-on. This technology is an expansion tool that helps to enhance the security and user experience of Ethereum.

What Is Arbitrum?

Lower fees, faster-operating speeds, and scalability are what Arbitrum was built on. It’s another layer-2 solution built to offload the congestion on the Ethereum blockchain. It’s often seen as the next generation of layer-2 solutions given its popularity.

It uses an optimistic roll-up to increase the speed of the blockchain given the known slowness of Ethereum. Not to mention, it’s a cheap and trusted way for Ethereum users to make their transactions as it sends everything back to the primary chain. Arbitrum manages around 40,000 transactions per second which significantly surpass what Ethereum can handle on its own.

Arbitrum works by creating a parallel network that’s connected to Ethereum’s primary chain. Proof of work for this is what allows the network to be more expansive.

Overall, Arbitrum attempts to accomplish the same goal as Polygon; to solve the issues that Ethereum has. This is done while enhancing the way end users can both access and operate the network.

Polygon vs Arbitrum: The Differences Between Them

The main difference between Polygon and Arbitrum is their security. Arbitrum doesn’t have its own coin and Ethereum’s base layer is what secures it.

Polygon differs in the way it’s secured since it uses its own “Proof of Stake” which is a consensus mechanism. This is also called the proof of stake consensus as it helps to validate crypto.

The validators that they both use are also very much different. Polygon operates on a separate chain and has its validators that work to secure the blockchain for end users.

It’s also secured by a much smaller amount of capital in comparison to users who primarily operate on the Ethereum chain. The Polygon network gives you a combination of both interoperability and flexibility. It can connect to the Ethereum chain and its main feature is its fast withdrawal time.

You will notice that Arbitrum, on average, will have a withdrawal time frame of about two weeks. Polygon, on the other hand, can approve withdrawals within only three hours.

Overall though, Polygon can act as its own entity offering users much more functionality than other alternatives. This may be one of the top reasons for its popularity when compared to arbitrum and optimism

The Additional Differences

Arbitrum, a decentralized protocol gets its security mechanism from the base layer of Ethereum as we know but it’s mainly built to make the design and builds of other decentralized applications easier. It is easily integrated with other introductions to the primary chain such as The Graph for example. Also, the roll-up technology it’s based on operates seamlessly with very little to almost no data stored on the actual chain itself.

With Polygon, you also have to consider the difference in gas fees. The fees can be represented in pennies in comparison to the Ethereum chain. Arbitrum does offer lower gas fees in comparison to Ethereum 2.0 as well but Polygon does surpass Arbitrum with this feature.

Polygon as we’ve outlined was initially designed as a parallel-run solution to the problem of state verification on the Ethereum chain. We could take this to mean that Polygon’s initial use case was to reduce the number of operations that needed to be verified by miners on the Ethereum chain.

Arbitrum operates similarly. With the open-source technology that Arbitrum brings, it may have a few more pros than cons.

Let’s also consider the transactions that are made per second for both options. We know that Arbitrum is capable of processing up to 40,000 TSP which is much more than the mere 2,000 that Ethereum can produce on its own. Polygon, however, surpasses both options which can authorize 65,000 TSP.

Notable Technology for Both

Polygon technology offers potential end users instant transactions and three-hour payout windows. It also offers secure trading. It’s more of an upgrade of Ethereum versus a replication.

Arbitrum offers low costs, high EVM compatibility, and unmatched developer tools. They rely more so on Ethereum than the opposite although they allow for more efficient usage.

Layer-2 solutions in general help to scale different applications by running transactions off layer-1 or Ethereum mainnet. The most notable innovation that Polygon brings is the potential and expectation of external linking that has all separate blockchains that are compatible with Ethereum.

Arbitrum isn’t based on ZK roll-ups. In comparison, it relies heavily on fraud proofs and optimistic roll-ups. This means that the solution offers a much lower computation cost off of the blockchain.

Expanding On The Tech

In addition, Arbitrum offers a higher rate of EVM compatibility and you can expect a more expansive DApp Network. This is because of the use of smart contracts. In general, Arbitrum can scale smart contracts that are used as well as enhance security safeguards for the blockchain itself.

Also, zk rollups or zero-knowledge rollups are used. They get their security from the Ethereum network but operate independently off-chain.

Developers will find that Arbitrum technology is much more flexible and it’s a good mechanism for portfolio growth as well. The reason for this is its clear advantage over Ethereum as a complete EVM-compatible solution. Its ecosystem is expected to grow rapidly and outshine layer-2 solutions.

Access to Arbitrum is almost seen as a default entrance to a variety of applications due to its DEX and Defi protocol diversity. Along with the quality development of its infrastructures, Arbitrum offers unmatched flexibility.

How Arbitrum and Polygon Scale Ethereum

Since Arbitrum was made in a few different layers, it’s able to offer more solutions that are both cost-effective and based on speed. The bridge is made up of a variety of smart contracts. This is how Arbitrum can bridge itself to the Ethereum network.

This is what allows the technology to operate as it should. From giving users the capability of sending and receiving messages on the platform to relaunching previously used Ethereum smart contracts on the Arbitrum layer.

Polygon helps a multi-chain ecosystem on the Ethereum blockchain. Polygon technology has the potential to completely surpass Ethereum and this is what stakers are waiting to observe.

Developers may see a continuous increase in scale now that the Ethereum Merge is complete. This change is what’s expected to optimize the network through staking Polygon.

Which Layer-2 Solution Is Better and Why?

When considering Polygon vs Arbitrum, both have interesting potential use cases. Deciding which is better depends on what you value. Arbitrum sees the most traffic and its top feature is its fraud-proofing technology.

It’s also one of the more popular options. Polygon, on the other hand, is well-known for its fast payouts. If you prefer withdrawals within hours versus weeks, Polygon would be the best option.

Safeguarding Your Investments

When weighing the differences between polygon vs arbitrum, their technology can have pros and cons. Regardless of which solution suits the way you trade, your investments could still be at risk without proper safeguards. In 2022 alone, at least $2.2 billion worth of cryptocurrency on DeFi projects, have been stolen, putting investors on edge.