Blockchain

Polygon Shifts from MATIC to POL Token in Major Upgrade

Polygon will replace its MATIC token with the new POL token, implementing changes in tokenomics and supply emissions as part of its Polygon 2.0 roadmap.

Polygon, the prominent layer-2 scaling solution for Ethereum, is set to undertake a significant upgrade this Wednesday that will transition its existing MATIC token to a new POL token. This highly anticipated move is part of Polygon’s broader “Polygon 2.0” initiative, which aims to refine its blockchain infrastructure and enhance flexibility in token issuance.

The migration has been long anticipated and will be closely watched due to the MATIC token’s significant presence in the crypto market. MATIC, currently the 13th largest digital asset by market capitalization at approximately $3.8 billion is held widely across various investor portfolios. For many users, the swap to POL will be executed automatically, minimizing disruption.

The upgrade will see POL assume the role of the native gas and staking token for the Polygon Proof-of-Stake (PoS) network. Initially, POL will replace MATIC on the Polygon PoS chain, with future phases incorporating POL into the AggLayer—Polygon’s system designed to aggregate affiliated blockchains built using its technology.

In addition to the token switch, the migration will introduce several tokenomics adjustments. POL will feature a new annual emission rate of 2%, diverging from the static model of MATIC. This adjustment aims to foster a more dynamic ecosystem. A portion of the new supply will be allocated to validators on the Polygon PoS network as rewards, while another segment will contribute to a community treasury. This treasury is envisioned as a self-sustaining fund to support various ecosystem activities, including growth initiatives and a grants program.

Marc Boiron, CEO of Polygon Labs, explained the need for the upgrade by highlighting the limitations of the old MATIC token. “The biggest reason for the upgrade was that the MATIC upgrade keys were intentionally burned years ago. This essentially means we couldn’t make changes to that token,” Boiron told CoinDesk. “We needed to introduce emissions to support community growth and validator incentives, which were impossible under the existing token model.”

Boiron emphasized that the new emission model aims to empower the Polygon community by providing a mechanism for ecosystem growth and validator rewards. The POL token’s emission strategy will also support the decentralization of new chains that emerge within the Polygon ecosystem. By using POL emissions, these new networks can incentivize decentralized operations, providing a sustainable model for future expansion.

The POL migration represents a critical step in Polygon’s evolution, aligning its infrastructure with the demands of a growing blockchain ecosystem. As Polygon transitions to POL, the community will gain enhanced tools for governance, staking, and growth, paving the way for a more robust and flexible blockchain environment.