- Migrating MATIC tokens to POL will involve transferring the MATIC tokens to a specified smart contract.
- As the initial excitement faded quickly, the number of new addresses joining the Polygon network declined.
Polygon, a layer-2 network constructed upon the Ethereum blockchain, intends to overhaul the tokenomics of its native token, Matic. This move is integral to the network’s broader initiative known as “Polygon 2.0.”
1/ Today, the next technical proposal of Polygon 2.0 is unveiled:
POL, the upgraded token of the Polygon protocol! 💫
POL is the next generation native token, designed to secure, align and grow the Polygon ecosystem.
Watch the video to get an idea how cool it is, then 🧵 pic.twitter.com/Gn7KcHpWEY
— Polygon (Labs) (@0xPolygonLabs) July 13, 2023
A select group of the network’s founders and researchers have put forth a proposal for this alteration. The company has published a white paper elaborating on the redesigned concept, outlining the network’s strategy to introduce a fresh native token called POL. This token will serve as a replacement for MATIC.
Termed a “hyperproductive token” by the Polygon team, POL shares similarities with “productive tokens” utilized by validators to safeguard a network and enjoy associated rewards. The team emphasized that the enhanced token will encompass all essential characteristics of a productive token while enabling validators to secure multiple chains.
Furthermore, each chain can extend various roles to these validators. In a blog post, Polygon highlighted that these roles may involve accepting transactions and generating blocks, creating zero-knowledge proofs, and participating in data availability committees.
Migrating MATIC tokens to POL will involve transferring the MATIC tokens to a specified smart contract, which will handle the conversion procedure automatically, transforming the deposited MATIC into an equivalent quantity of POL. To ensure sufficient time for all token holders to carry out the asset transfer, the Polygon team intends to provide users with a timeframe of over four years to make the token switch.
The company will limit the initial token supply to 10 billion, reserving a substantial portion for transitioning MATIC to POL. The white paper’s proposal subsequently caps the token’s emission rate at 1% annually for the next ten years. This rate signifies the speed at which the network can create new tokens.
Polygon Investors Experience a $3 Billion Loss as MATIC Price Declines by 13% in a Single Week
The price of MATIC experienced positive movement thanks to the overall market optimism that ensued after XRP achieved a partial victory in its lawsuit against the SEC last week. However, these gains were short-lived as they quickly vanished, resulting in significant losses that reduced investors’ profits by more than a month.
The current trading price of MATIC is $0.747. However, the main concern for investors lies in a potential close below the 50-day Exponential Moving Average (EMA).
Investors have also been withdrawing their support for the Polygon token, hindering its ability to gain significant backing. As the initial excitement faded quickly, the number of new addresses joining the Polygon network declined. As a result, the network’s growth has been negatively impacted, with the rate of new address creation dropping by 12% in less than a week.
The rising losses contribute equally to the discouragement of new investors, alongside the diminishing optimism in the broader market.
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