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Polygon proposes token upgrade from MATIC to POL to enhance network functionality

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TL;DR

  • Polygon proposes upgrading its native token MATIC to POL, aiming to create a unified token for all Polygon-based networks.
  • The upgrade would allow network validators to support multiple chains using a single token and provide various benefits such as improved security and scalability.
  • The transition from MATIC to POL involves sending MATIC to an upgrade smart contract, with a proposed transition period of four years or more if supported by the community.

Polygon’s founders and researchers have proposed upgrading the network’s MATIC token to POL. However, the upgrade would enable POL to function as a single token for all Polygon-based networks, including the main Polygon blockchain, the Polygon zkEVM network, and various supernets.

The announcement of the token upgrade sparked an immediate market response, with MATIC experiencing a price surge of up to 2.6%, reaching $0.747 within the first three minutes. If the proposal gains acceptance, network validators would be able to support multiple chains using a single token, enhancing operational efficiency.

More on POL tokens

The process of upgrading from MATIC to POL involves a straightforward technical action: transferring MATIC to an upgrade smart contract, which would automatically provide the equivalent amount of POL in return. Token holders would have ample time, at least four years, to complete the upgrade if the community supports the transition.

POL, as outlined in its whitepaper, will become the native token of the Polygon ecosystem, playing a pivotal role in coordination and incentivization. With an initial supply of 10 billion tokens dedicated to the migration from MATIC, POL’s yearly emission rate of 2% will be used for validator incentives and community treasury.

In its projections, the layer2 network anticipates POL’s price to grow significantly over a ten-year period, averaging around $5. Widespread adoption of POL could lead to the emergence of up to 25 public chains and over 3,000 supernets, showcasing the network’s scalability and potential.

The token upgrade is expected to bring several benefits to the Polygon ecosystem, enhancing security, scalability, and overall support. According to Polygon network, the token upgrade would eliminate friction by replacing the need for users and developers to hold, stake, or consume native tokens to utilize the network, a departure from typical blockchain protocols.

Polygon has clarified that the upgrade is not a direct response to recent regulatory challenges. While the U.S. Securities and Exchange Commission (SEC) classified MATIC and other digital assets as securities in its legal action against Binance and Coinbase, Polygon Labs disputes this classification. Nonetheless, certain U.S.-based firms have delisted MATIC due to regulatory concerns.

The proposed token upgrade marks a significant step forward for Polygon, aiming to create a more efficient and cohesive ecosystem. The community will play a crucial role in determining the success of the proposal, and if accepted, the upgrade could pave the way for enhanced growth and development within the Polygon network.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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