Polygon To Upgrade MATIC Token To POL Token For Enhanced Flexibility

According to CoinDesk, Polygon, a layer-2 network on the Ethereum blockchain, will activate an upgrade on Wednesday, replacing its longstanding MATIC token with a new POL token. This change aims to provide more flexibility in the issuance of new supply. The transition, part of the “Polygon 2.0” roadmap announced last year, will make POL the native token of the Polygon PoS chain and eventually other chains within its ecosystem. The initial phase of the migration will see POL replacing MATIC as the native gas and staking token for the Polygon PoS network. In subsequent phases, POL will play a crucial role in the AggLayer, a system designed to aggregate affiliated blockchains built using Polygon technology. The Polygon community has also proposed that POL will support broader roles in the Polygon staking hub, set to be released in 2025, including block generation, zero-knowledge proof generation, and participation in Data Availability Committees (DACs). The migration from MATIC to POL will introduce some changes in tokenomics. Polygon has stated that the new token will have an annual emission rate of 2%, with part of the supply allocated to validators on Polygon PoS for rewards and the other part to the community treasury. This treasury is described as a self-sustainable ecosystem fund to support various activities within the Polygon ecosystem. Marc Boiron, CEO of Polygon Labs, explained that the upgrade was necessary because the MATIC upgrade keys were intentionally burned years ago, making it impossible to make changes to the token. The introduction of emissions is intended to support the Polygon community ecosystem by establishing a grants program as part of the community treasury, giving the community some control over the funds to foster ecosystem growth. Additionally, the emissions will provide a means for validators to receive rewards, aiding in the decentralization of new chains that may emerge within the network. Boiron emphasized that the emissions could be used to decentralize networks by incentivizing people to run decentralized groups or provers. POL holders will then receive fees from these networks, further integrating the token into the broader Polygon ecosystem.