Ethereum EIP-1559 upgrade goes live on Polygon to destroy MATIC

The ethereum upgrade, which introduced a partial network fee burning mechanism last August, has been launched on the second-layer scaling network Polygon.

Ethereum’s EIP-1559 upgrade, released alongside the London hard fork last summer, was a success in terms of gas price predictability and network fee burn. The upgrade has now been launched on Layer 2 scaling network Polygon to improve “fee visibility.” The upgrade went online at the height of the area code 23850000.

The Polygon team announced the upgrade date on Jan. 17, after it was successfully deployed on the Mumbai testnet.

The EIP-1559 upgrade introduced the same fee burning mechanism to Polygon, resulting in the burning of MATIC tokens. It also removes the first-price auction method of calculating network fees, which would introduce better cost estimates but not lower gas prices.

"The burn process is a two-step process, starting on the Polygon network and finishing on the Ethereum network."

Just like Ethereum, MATIC’s supply is likely to become deflationary, with an estimated 0.27% of the total supply being burned each year, the team said. MATIC tokens have a fixed supply of 10 billion, with 6.8 billion currently in circulation.

“Deflationary pressure will benefit both validators and delegators as they are paid in MATIC for processing transactions,” the team added, before stating that the upgrade will also reduce spam and network congestion.

Despite being a second-layer network, Polygon has recently suffered its own gas crisis. Earlier this month, Polygon’s gas fees spiked, causing some validators to fail to submit blocks, according to Dune Analytics. The surge in demand was due to a DeFi liquidity mining game called Sunflower Land, which rewarded early adopters before degens lost interest.

Since going live on ethereum about six months ago, the upgrade has resulted in 1.54 million ETH being burned to date, according to the burn tracker. At current ETH prices, that's roughly $5 billion. The tracker also predicts that once the “merge” happens and proof-of-stake becomes the network’s primary consensus mechanism, ethereum’s issuance will become deflationary at a rate of -2.5% per year.

According to data from CoinGecko, MATIC prices are down 9% on the day, falling to $2.22 as of writing.

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