Polygon, the leading Ethereum Layer-2 scaling solution, has officially announced the migration of its native $MATIC token to the new $POL token.
Reason for Migration to $POL
The upgrade from $MATIC to $POL is crucial for Polygon’s ambitious plans to evolve into a zero-knowledge Ethereum Virtual Machine (zkEVM) system under its “Polygon 2.0” roadmap. The new $POL token will be used across multiple interoperable blockchains within the Polygon ecosystem. Polygon’s roadmap envisions $POL as a versatile token that will serve several functions beyond gas fees and staking. Validators who stake $POL will not only secure the Proof-of-Stake (PoS) chain but also have the opportunity to earn rewards by staking on other chains in the Polygon ecosystem, a concept known as the “AggLayer.”
Transition Process
For most $MATIC holders, the transition to $POL will be seamless. If you hold $MATIC on the Polygon PoS chain or centralized exchanges, your tokens will automatically convert to $POL on a 1:1 basis. However, if you hold $MATIC on the Ethereum network or on Polygon’s zkEVM layer 2, you will need to manually migrate your tokens using a migration contract provided by Polygon. The process is straightforward but is recommended for experienced users to avoid any potential issues. Despite Polygon's assurances that there is no immediate deadline for completion, it is advisable to act sooner rather than later to avoid any complications during the transition.
Implications for Token Holders
With the transition to $POL, Polygon introduces new tokenomics that are designed to support the network’s long-term growth. One of the key changes is a new annual emission rate of 2%. This emission rate is split between validator rewards and a community treasury, as stated by Polygon Labs CEO Marc Boiron to CoinTelegraph. The treasury is intended to be a self-sustaining ecosystem fund, supporting various activities within the Polygon network. $POL will also play a role in Polygon’s broader technology stack. It will be used in block production, zero-knowledge proof generation, and participation in Data Availability Committees (DACs). These functionalities are critical for maintaining and expanding Polygon’s capabilities as a leading Layer-2 solution.
The migration of the $MATIC token to $POL is a significant step for the further development of the Polygon ecosystem. The new token will play a crucial role in the network's technological and economic stack, ensuring its growth and stability.
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