OKX Launches L2 Blockchain on Polygon

Leading cryptocurrency exchange and web3 platform OKX has launched X1, its own layer 2 blockchain, on Polygon’s Chain Development Kit (CDK).

This occurs in line with a growing trend among exchanges to research and develop L2 solutions. Coinbase launched its L2 network Base in August, which currently has more than two million users. Kraken is said to be working on an L2 chain too, also in collaboration with Polygon.

Empowering developers with security, scalability

The exchange posted on X:

We’re thrilled to introduce X1, our new Ethereum L2 network built on Polygon’s CDK. Our landmark collaboration with 0xPolygonLabs empowers next generation developers with increased security, scalability and low transaction costs to build the future of Web3.

An ailing network

Polygon launched its blockchain zkEVM, equivalent to EVM, in March. Demand for it has dropped in the last several months. Polygonscan data show the network registered a peak in daily transactions (122,136) on August 4, but they began to decline thereafter. On November 14, it had just 43,744 transactions a day, a drop of almost two-thirds since the peak.

Fewer unique addresses are operating on the network

An analysis shows that the drop in the transaction count since August is due to a corresponding decline in the number of unique addresses that perform daily transactions on Polygon zkEVM. More specifically, the number of unique addresses operating on the network has dropped by 99% since July 31.

Gas fees as a factor

The average gas fee per transaction on Polygon zkEVM peaked at 23.65 GWEI on May 6. Gas fees dropped as demand for the network declined. The average gas fee for a transaction was 2.6 GWEI on November 14, equivalent to an 89% drop from the all-time high in May.

Declining use aside, the MATIC token is benefiting from the recent bull run. It has gained 14.4% in a week according to CoinGecko data.