blockworks.co
Polygon is undergoing its long-anticipated token upgrade from MATIC to POL today, as part of its “Polygon 2.0” roadmap that was announced in June 2023.
POL will replace MATIC as the native gas and staking token on the Polygon PoS sidechain (not to be confused with Polygon zkEVM chain), formerly known as the Matic Network.
MATIC token holders on Polygon PoS will be automatically upgraded by September 4, as will all currently staked MATIC.
Token holders on Ethereum mainnet, Polygon zkEVM and on centralized exchanges will have the option to upgrade their tokens to POL with no deadline enforced.
Based on the Polygon Protocol Governance Call #24, the POL token upgrade is not a hard fork and will therefore be executed across three multisigs: the governance multisig, the PoS bridge multisig, and the Protocol Counsel executor multisig.
At a market cap of $3.9 billion today, Polygon CEO Marc Boiron told Blockworks that it’s the “biggest little upgrade that’s ever happened with a token,” and that the decision-making process was largely inspired by Ethereum’s culture around decentralized governance.
It is a culmination of almost two years of community-driven discussions that involved multiple iterations of Polygon Improvement Proposals (PIP) and Polygon Protocol Governance Calls (PPGC), rather than a formal vote, Boiron said.
Read more: Polygon is focused on a future of zero-knowledge proofs
Today, MATIC’s circulating supply is almost at its total capped supply of 10 billion and no longer has active emissions. As part of the revamped tokenomics, POL will begin inflating again at 200 million annually, about 2% per year over the next ten years.
1% of emitted POL is allocated as validator staking rewards, and the other 1% is directed to the Polygon community’s treasury to support ecosystem growth, as per community decision.
The emissions will create an “opportunity for the Polygon community to get involved with growth in a meaningful way,” Boiron said.
Polygon is branding POL as a “hyperproductive” token, with multiple utility use-cases to be decided by the community.
Today, MATIC holders can stake to a validator building blocks on the Polygon PoS chain and receive fees. In the future, validators could be running a wider range of staking services within the “Polygon Staking Hub/Layer,” a portal of different Polygon-related services to be released in 2025.
These could include validator services such as zero-knowledge proof generation, data availability provision in a Data Availability Committee (DAC) or block batching in the Agglayer, Polygon’s zk-powered cross-chain interoperability bridge.
Read more: Espresso partners with Polygon Labs to solve rollup interoperability
POL stakers could also receive fee revenue from other blockchain networks built on Polygon CDK, the company’s rollup development kit.
The point is that POL’s value accrual will no longer be derived solely from fees via PoS chain validation, but a diversified set of services and networks, Boiron said.
Today, Polygon PoS chain is home to many successful decentralized applications such as Polymarket, the liquidity layer for prediction markets Azuro, and games like Matr1x.
The Agglayer, Polygon’s cross-chain interoperability bridge which seeks to unify fragmented liquidity across different chains, has seen significant uptake from other L2 rollup ecosystems like OKX’s X Layer, Immutable, Ronin and most recently, Movement Labs, a network of Move-related L1 blockchains like Aptos and Sui.
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