Today marks a significant milestone for Polygon as it transitions from MATIC to POL, an upgrade eagerly anticipated since the unveiling of its “Polygon 2.0” roadmap in June 2023. This pivotal shift will redefine the Polygon ecosystem, bringing a wave of changes to its tokenomics and utility.
From MATIC To POL – What To Expect
The POL token will take over from MATIC as the native gas and staking token on the Polygon PoS sidechain, formerly known as the Matic Network. Notably, this upgrade does not extend to the Polygon zkEVM chain, which remains separate. For those holding MATIC tokens on the Polygon PoS chain, the transition to POL will be seamless, with an automatic upgrade by September 4. However, holders on Ethereum mainnet, Polygon zkEVM, or centralized exchanges will have the option to upgrade their tokens to POL at their convenience.
According to Polygon Protocol Governance Call #24, the POL token upgrade is not classified as a hard fork. Instead, it will be executed through three multisigs: the governance multisig, the PoS bridge multisig, and the Protocol Counsel executor multisig. This structured approach ensures a smooth transition without disrupting network operations.
A Game-Changing Upgrade
Polygon CEO Marc Boiron describes the POL upgrade as “the biggest little upgrade that’s ever happened with a token.” With a market cap of $3.9 billion, this transition represents a strategic move inspired by Ethereum’s decentralized governance culture. The decision follows nearly two years of community-driven discussions and iterative Polygon Improvement Proposals (PIPs).
Under the new tokenomics, POL will have an annual inflation rate of 200 million POL, or about 2% per year for the next decade. This inflation will be split equally: 1% allocated as validator staking rewards and 1% directed to the Polygon community’s treasury. This change aims to foster greater community involvement and support ecosystem growth.
POL’s Utility and Future Prospects
POL is being positioned as a “hyperproductive” token with a range of potential use-cases determined by the community. Unlike MATIC, whose value was primarily derived from fees via PoS chain validation, POL will benefit from a diversified set of services and networks. This includes potential future validator services within the “Polygon Staking Hub/Layer” and fee revenue from other blockchain networks built on Polygon’s rollup development kit (CDK).
Also Read: Polygon (MATIC) Hits Multi-Year Low At $0.40 -Can POL Upgrade Reverse The -21.95% Weekly Decline?
The Polygon PoS chain continues to host successful decentralized applications, including Polymarket and Azuro, and is instrumental in Polygon’s Agglayer—a cross-chain interoperability bridge enhancing liquidity across various Layer 2 rollup ecosystems.
As the upgrade unfolds, Polygon’s community and stakeholders eagerly anticipate how POL will shape the future of blockchain technology and decentralized finance. With a focus on zero-knowledge proofs and a broader range of utility, POL is set to become a cornerstone in Polygon’s evolving landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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