Polygon has formally launched a white paper on the financial mannequin of the brand new token POL native to Polygon 2.0. POL is just not a brand new token, however an improve from his authentic MATIC token. The brand new POL token will run on all Polygon Ecological Networks, together with Polygon PoS, Polygon zkEVM, Polygon Supernet, and extra. At that time, MATIC token holders will trade it for POL on a 1:1 ratio.
MATIC’s worth defied the sound, gaining 18% in 24 hours and at the moment buying and selling at $0.86.
Nonetheless, the white paper states that the whole quantity of POL will probably be initially 10 billion and will probably be issued at an annual fee of two% for the following 10 years, which means that the whole quantity of POL tokens exceeds the whole quantity of tokens. 10 billion MATIC tokens. It’s believed that this has precipitated dissatisfaction amongst MATIC holders and diminished the unique worth of MATIC.
Based on CoinGecko information, MATIC at the moment has a complete circulation of 9.319 billion and a present market worth of US$8 billion, rating eleventh amongst crypto property.
How is the POL token totally different from the unique MATIC? What function will POL play in Polygon2.0? What are the upgrades for Polygon2.0?
The POL token is a vital a part of the Polygon2.0 roadmap and can also be the primary concern for neighborhood customers. As a result of as soon as MATIC’s POL improve plan is formally applied, it signifies that the narrative logic (usefulness, worth, and many others.) will probably be fully misplaced. The variety of MATIC tokens is modified. will probably be modified. Nonetheless, the issuance of POL hidden within the white paper is controversial.
Within the whitepaper, the POL provide mannequin consists of two elements: preliminary provide and continued issuance. Of those, the whole preliminary issuance amounted to 10 billion, all of which will probably be used to improve and trade MATIC tokens. POL may even improve issuance at a relentless fee of two% every year, and that development fee will stay unchanged for no less than 10 years. Changes to the speed of improve after 10 years will probably be decided based mostly on particular circumstances. Extra issuance could also be suspended.
The 2 fundamental functions of the extra issuance are to reward validators and to develop the ecosystem fund. The previous distributes 1% of POL’s annual development fee provide to verifiers as a primary protocol reward and encourages verifier participation. The latter can also be his 1% ecosystem fund issued yearly to proceed supporting the additional improvement and development of the Polygon ecosystem. The issuance fee can’t be modified throughout the first 10 years. After 10 years, the neighborhood can resolve by means of the governance framework to by some means cut back the worth of the issuance fee, however no more than 1%.
Which means over the previous decade, POL has issued an extra 200 million tokens every year, plus an preliminary provide of 10 billion tokens, bringing the whole quantity of POL tokens above the MATIC cap.
This made MATIC holders very dissatisfied, considering that the extra issuance of POL would dilute the unique worth of MATIC, in order that they selected to make the MATIC tokens instantly extra priceless, making them pointless. I am questioning what it could be like.
Some customers mentioned that Polygon formally has no cash and want to ship cash to their firm by means of the brand new token POL. With 93% of MATIC at the moment circulating within the secondary market, the Polygon workforce doesn’t have sufficient tokens to drive consumer development and utility adoption of his Polygon ZkEVM and is at the moment issuing new cash. I can solely do it.
The official rationalization for that is that the ideas of POL issuance and issuance fee setting are because of the Polygon ecosystem and Web3 improvement taking time to mature and attain mainstream adoption. Primarily based on historic adoption cycles for the Web and computing platforms, the maturity stage can take roughly 10-15 years. The ecosystem will want continued monetary help throughout this era.
As soon as the Polygon ecosystem and Internet 3 have reached maturity and the transaction charges and different incentives supplied by validating varied chains within the Polygon ecosystem are sufficiently worthwhile, the neighborhood will ask validators to might resolve to cut back or cease issuing further rewards for . Equally, communities may also resolve to cut back or cease additional issuance to the Group Treasury when the ecosystem now not wants further monetary help.
Clearly, Web3’s adoption cycle may very well be barely totally different, or fully totally different, than the historical past of the Web. If it takes longer to succeed in mainstream adoption, and the ecosystem nonetheless wants help after 10 years, the neighborhood might select to not intervene at that time, or improve the issuance fee if vital. You possibly can select to regulate the
This appears to be in step with consumer hypothesis that the Polygon workforce doesn’t have sufficient tokens to inspire consumer development and utility adoption of Polygon ZkEVM, and at the moment can solely situation new cash. is.
Because the announcement of the Polygon 2.0 plan, Polygon’s technique has been from a single-block community to an L2 multi-chain community ecosystem pushed by ZK rollup, together with varied sub-networks based mostly on Polygon PoS, Polygon zkEVM and Polygon supernets. migrated. POL tokens run throughout the community ecology.
Within the whitepaper, officers mentioned POL is the third technology token after BTC and ETH. Polygon explains this as follows:
Though BTC is a first-generation native token, it’s primarily used to pay for on-chain fuel payments and miner rewards, however it’s unlikely for use as a productive asset (resembling a pledge as a validating node) for its holders. you possibly can’t. have some authority.
ETH is a productive asset. Her PoS mechanism on Ethereum helps ETH holders to pledge her ETH and get incentives for taking part in defending community safety, however its provide is unpredictable. As well as, it is going to be used for the administration base. Token provide will probably be exhausted and ecosystem help will finish.
Much like ATOM, because the native token of the Cosmos Hub central chain, it’s also a productive asset that may decide to take part within the safety of Cosmos Hub and earn incentives. Nonetheless, tokens are solely helpful inside the Cosmos Hub central chain. It’s not used to run and safe different chains inside the Cosmos multi-chain ecosystem. The financial help it facilitates can’t proceed indefinitely, and the funds in the neighborhood treasury may even be depleted.
Polygon needs to resolve the above downside. By issuing 1% of the whole provide to the neighborhood treasury every year, we will proceed to help ecosystem improvement.
As well as, Polygon may even change into POL as a super-productivity token, and POL token holders can pledge as verifiers to confirm all Polygon2.0 ecological networks. Completely different chains even have totally different roles for POL holders. For instance, within the zkEVM chain, POL holders act as verifiers who generate and submit zero-knowledge proofs. On the PoS chain, POL holders can act as validators to submit transactions and generate blocks.
The staking layer idea launched by Polygon2.0 is the place verifiers pledge their POL tokens. Right here, a consumer can pledge her POL tokens to enter the validator pool and take part in validating the Polygon chain to earn validator rewards. This can situation an extra POL of 1% of him per 12 months.
It is much like Web2’s cloud platform, customers do not care which cloud their app information is saved in. As a validator, you do not have to fret about which chain to validate to maximise your reward earnings.
From this angle, POL turns into a basic asset of the Polygon ecosystem, very similar to AVAX is to Avalanche and its subnets. Person pledges that AVAX will probably be a validator able to validating his Avalanche mainnet and its subnets inside the ecosystem. Nonetheless, in Polygon, a validator can validate a number of chains, and every chain can present a number of roles and corresponding rewards to the validator. This can be utilized not solely to validate transactions inside every community, but in addition to generate zero-knowledge proofs to ship.Ethereum mainnet, and many others.
Which token will the Polygon ecological chain use to pay for GAS? You mentioned you possibly can situation tokens.
The imaginative and prescient of Polygon2.0 is just to be a community worth layer, understood as Web3’s platform layer (Cosmos, Polkadot, and many others.), permitting builders to construct their very own block networks based mostly on this, making it extra versatile and highly effective. to offer a protected block community. A platform for DApps. Its performance is much like his Web2 cloud service platform.
At current, Polygon2.0 is an L2-layer multi-chain community pushed by ZK know-how, which introduces a sequence of modules together with consensus and synchronization mechanism, anti-fraud, and many others. Builders can use these modules to Construct your individual blockchain community. It has infinite scalability, unified liquidity, and may even work together throughout chains. For customers, utilizing your entire community is like utilizing chains.
Of those, Polygon PoS will probably be upgraded to zkEVM Validium to be appropriate with ZK know-how. At that time, zkEVM, PoS, and supernet subnetworks will allow data and emphasize interoperability.
Normally, Polygon2.0 will probably be a set of ZK sequence L2 prolonged networks.
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