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On September 4, 2024, Polygon will introduce a new native token called POL.
The migration from the existing MATIC token to $POL is part of a wider vision, as Polygon aims to grow from a single proof-of-stake (PoS) network to an ecosystem of numerous zero-knowledge (ZK) technology-powered blockchains.
In doing so, Polygon hopes to create a crypto ecosystem that is as easy to use as the internet we know today.
Why is Polygon migrating from MATIC to POL? Here’s all you need to know about Polygon’s new POL token.
Polygon’s Next Evolution: The AggLayer
Most of us know Polygon as an Ethereum (ETH) sidechain that is fast and cheap to use.
The project’s history dates back to 2017 when Jaynti Kanani and Sandeep Nailwal founded a PoS blockchain called the Matic Network. In 2021, Matic rebranded itself to Polygon and gained popularity as it marketed itself as an Ethereum scaling solution.
Now, Polygon aims to create a blockchain ecosystem that it calls the “AggLayer” — short for Aggregation layer.
Polygon defines the AggLayer as “a horizontally scalable multichain network that enables access to shared liquidity and state across sovereign, connected chains.”
In simple words, the AggLayer will host numerous ZK-powered layer one (L1) and layer two (L2) blockchains that will be secured by a common validator set.
All the networks within Polygon’s AggLayer will be able to perform near-instant cross-chain transactions.
The AggLayer will be connected to the Ethereum L1 via a single cross-chain bridge, removing the need for each independent blockchain to host a bridge to Ethereum.
As a part of the AggLayer vision, Polygon will offer developers the Polygon Chain Development Kit (CDK) to easily create new L1 and L2s.
Additionally, the introduction of the Polygon zkEVM prover kit will allow developers to convert existing EVM chains to become ZK L2s and connect to Polygon’s AggLayer.
“By aggregating liquidity and security guarantees, the AggLayer solves one of crypto’s major UX problems: How to make a bunch of sovereign blockchains feel like using the Internet as we know it,” said Polygon.
The new POL token is a key part of Polygon’s AggLayer Layer vision. Validators will be required to stake POL, which will enable them to validate multiple chains within the AggLayer.
What is the POL Token?
POL is the new ecosystem token of Polygon. POL will replace MATIC on a 1:1 basis.
From September 4, 2024, POL will become the gas fee payment and staking token of the Polygon PoS blockchain.
According to Polygon, POL will introduce a “third generation” of crypto tokens, following the success of BTC and ETH, by expanding token utility and increasing validator incentives.
Polygon said its POL will bring the following improvements over the existing MATIC token:
- Shared security – POL validators will be able to validate multiple chains.
- Increased incentives – Polygon chains can offer multiple roles and additional rewards to validators.
- Extra validator roles – Polygon’s AggLayer will allow validators to generate ZK proofs and participate in data availability committees.
- Community Treasury – Polygon proposes to introduce continuous POL emission to fund Community Treasury. The treasury will fund protocol development, research, grants, and adoption incentives.
- Governance – POL holders will govern the Community Treasury.
Polygon said that every chain within the Polygon ecosystem will have the freedom to decide which token to use for gas fees. POL will be the gas fee token of the Polygon PoS chain by default.
“That being said, using ETH for gas fees provides significant UX benefits for Layer 2 chains, which subsequently leads to higher adoption and more fees for validators,” added Polygon.
POL Tokenomics
- POL token will have a total initial supply of 10 billion tokens, the same as that of MATIC.
- POL will have an annual emission rate of 1% which will be used for staking rewards.
- Additionally, POL will have a 1% annual compounding emission to fund the community treasury.
How to Migrate From MATIC to POL?
If you are a MATIC holder on the Polygon PoS chain, you do not need to take any action. Your MATIC tokens will automatically be changed to POL once the upgrade goes live on September 4, 2024.
You will need to exchange your MATIC tokens via a migration contract if you are holding them on Ethereum and Polygon zkEVM.
Centralized exchange users may need to manually exchange their MATIC tokens to POL. However, some exchanges like Nexo have announced that MATIC will be converted to POL automatically.
MATIC holders do not need to rush to exchange their tokens for POL. Polygon has not placed any deadline for MATIC holders on Ethereum and Polygon zkEVM to upgrade to POL.
So if your MATIC tokens are deposited in a liquidity pool or locked in a staking contract, you can upgrade to POL at your convenience.
However, readers should note that the Polygon community has the power to establish a deadline in the future.
The Bottom Line
The introduction of the POL token marks the beginning of an ambitious era for Polygon. In the past, Polygon PoS has proved to be an efficient blockchain platform that has hosted popular decentralized applications like prediction marketplace PolyMarket, decentralized social platform Lens Protocol, and play-to-earn game Sunflower Land.
Polygon is now moving towards solving blockchain fragmentation and other user experience issues plaguing the crypto industry with the introduction of the POL token and the AggLayer.
