- Polygon has taken a key step toward its aggregated chain vision.
- The initial phase of the MATIC to POL upgrade will offer limited functionality.
- Developers tip POL to eventually evolve into a “hyperproductive” token.
Over the past year, Polygon Labs, developers of the eponymous Polygon network, have espoused plans to infinitely scale Ethereum through an “aggregated” chain architecture that will horizontally connect as many chains as possible on top of the leading Layer 1. As part of this new roadmap, developers have announced plans for several massive changes to the network, including upgrading the ecosystem’s native token from MATIC to POL.
A year after this announcement, this upgrade is now live. What changes does POL bring to Polygon?
A New Gas and Staking Token and Inflation
After weeks of anticipation, the MATIC to POL token upgrade has gone live as of the time of writing on Wednesday, September 4.
Following the recent upgrade, POL is set to become the new gas and staking token for the Polygon PoS chain. This means transaction fees on the Polygon PoS chain will now be charged in POL, not MATIC. At the same time, staking rewards on the network will now be paid out in POL.
Beyond a name change, POL also comes with an entirely new tokenomics model. While MATIC had a fixed supply of 10 billion tokens that have been gradually reduced through a burn mechanism, POL is inflationary.
POL supply matches that of MATIC 1:1 but will grow at a rate of 2% annually, with an option for the community members to adjust the rate in the future. While this new tokenomics may rub some off the wrong way, Polygon developers maintain that this inflation is necessary for the network’s sustainable development and growth.
Per the new tokenomics, 1% of the annual token emission will be dedicated to validator rewards, while the remaining 1% will be sent to the community treasury to fund Polygon development efforts, ecosystem grants, and adoption initiatives.
These utility and changes, however, are only the beginning, as Polygon Labs has explained that the recent MATIC to POL upgrade is only phase 1.
“A Hyperproductive Token”
According to developers, the end goal for POL is for it to become “a hyperproductive token.” For users, this phase entails earning multiple rewards across several blockchains within Polygon’s aggregated network. This functionality is slated to go live sometime in 2025 when the planned staking hub of the aggregated Polygon network goes live.
At the same time, POL will serve other network security services like sequencing and ZK-proof generation.
Despite the excitement surrounding the recent MATIC to POL upgrade, POL is trading around the $0.38 price level per CoinMarketCap data at the time of writing, representing a 6% decline in the past 24 hours. The decline comes as uncertain macroeconomic conditions have put downward pressure on risk markets.
On the Flipside
- The full vision of POL has yet to be realized.
- Despite Polygon’s technological advancements, POL (formerly MATIC) has underperformed the broader crypto market in the past year.
Why This Matters
POL has been tipped as the fuel for Polygon’s aggregated blockchain future. The recent upgrade brings this future another step closer.
Read this to learn what you need to do now that the MATIC to POL upgrade is live:
Polygon’s MATIC to POL Migration Set for September: What It Means for You
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