Polygon has formally launched a white paper on the financial mannequin of Polygon 2.0’s new POL token. POL isn’t a brand new token, however an replace of the unique MATIC token. The brand new POL token will work throughout all Polygon ecosystems, together with Polygon PoS, Polygon zkEVM, Polygon Supernets, and extra. At the moment, MATIC token holders will trade it for POL at a 1:1 ratio.
MATIC surged forward of the bell, up 18% in 24 hours, with a present value of $0.86.
Nonetheless, within the white paper, the preliminary complete quantity of POL is 10 billion, and will probably be issued at a charge of two% per 12 months for the subsequent 10 years, which signifies that the whole quantity of POL tokens has exceeded the whole quantity of POL tokens. 10 billion MATIC tokens. This has induced dissatisfaction amongst MATIC holders, who imagine it has lowered the unique worth of MATIC.
In accordance with CoinGecko, MATIC at present has a complete circulation of 9.319 billion models and a present market worth of $8 billion, rating eleventh amongst crypto property.
How is the POL token completely different from the unique MATIC? What function does POL play in Polygon2.0? What are the updates for Polygon2.0?
The POL token is a crucial a part of the Polygon2.0 plan and is of most concern to group customers, as as soon as MATIC’s plan to improve POL is formally carried out, it is going to imply that the narrative logic (corresponding to utility and worth) of MATIC tokens might be modified . will change. Nonetheless, the POL emission hidden within the white paper has induced controversy.
Within the White Paper, the POL provide mannequin will include two components: preliminary provide and steady issuance. Between them, the whole preliminary emission is 10 billion models, all of that are used to improve and trade MATIC tokens. As well as, POL will improve emissions at a continuing charge of two% per 12 months, and the speed of improve will stay unchanged for a minimum of 10 years. As for the adjustment of the speed of improve after 10 years, will probably be decided on a case-by-case foundation. Further permission could also be suspended.
There are two important functions of extra issuance, together with the verifier rewards and the event of the ecosystem fund. The previous allocates 1% of POL’s annual improve charge as a core protocol reward to verifiers to encourage verifiers to affix. The latter can be a 1% ecosystem fund that might be launched yearly to additional assist the additional growth and development of the Polygon ecosystem. In the course of the first 10 years, the problem charge can’t be modified. After 10 years, the group can determine to scale back the worth of the emission charge in any approach by means of the administration system, however it won’t exceed 1 %.
Because of this over the past 10 years, POL will difficulty 200 million extra tokens yearly, along with the preliminary provide of 10 billion tokens, and the whole quantity of POL tokens has exceeded the MATIC cap.
Consequently, MATIC holders are fairly sad, believing that the extra launch of POL will scale back the preliminary worth of MATIC, so why not select on to make MATIC tokens extra priceless, pointless.
Some customers stated that it must be the case that Polygon formally has no cash and needs to ship cash to itself by means of the brand new token POL. With 93% of MATIC at present within the secondary market, the Polygon crew doesn’t have sufficient tokens to drive consumer development and adoption of Polygon ZkEVM, and so they can solely difficulty new cash now.
The official rationalization for that is that the precept behind POL issuance and issuance charge is that the polygon ecosystem and Web3 growth wants time to mature and attain mainstream adoption. Based mostly on the historic adoption cycles of the Web and computing platforms, the maturity stage can take about 10-15 years. Throughout this era, the ecosystem wants steady financial assist.
When the Polygon Ecosystem and Net 3 attain a mature stage, the place transaction charges and different incentives from verifying the assorted chains of the Polygon Ecosystem can have enough returns, the group might determine to scale back or fully cease giving extra rewards to verifiers. . Equally, when the ecosystem not wants extra financial assist, the group can also determine to scale back or cease extra emissions to the group treasury.
Clearly, the Web3 adoption cycle could also be barely completely different or fully completely different from the historical past of the Web. If it seems that it takes longer to achieve mainstream adoption and the ecosystem nonetheless wants assist 10 years from now, the group can select to not intervene at the moment or regulate the issuance charge as wanted.
This appears to agree with the consumer’s guess that “the Polygon crew doesn’t have sufficient tokens to drive consumer development and adoption of Polygon ZkEVM, and might solely difficulty new cash now.”
Following the announcement of the Polygon 2.0 roadmap, Polygon’s technique has modified from a single blockchain community to an L2 multi-chain community ecosystem managed by ZK Rollup, together with Polygon PoS, Polygon zkEVM, and numerous sub-networks based mostly on Polygon Supernets. POL tokens will work throughout the community ecosystem.
Within the white paper, the official stated that POL is the third technology token after BTC and ETH. Polygon explains this:
Though BTC is a first-generation native token, it’s primarily used to pay gasoline charges and rewards from miners on the chain, however it can’t be used as a productive asset for holders (corresponding to staking as a validation node), nor can it. have any governing energy.
ETH is a productive asset. Ethereum’s PoS mechanism helps ETH holders to stake it, take part within the safety safety of the community and thus obtain incentives, however its provide can’t be predicted. As well as, it’s allotted to the administration fund. The provision of tokens might be depleted and assist for the ecosystem will stop.
Like ATOM, as the principle token of the Cosmos Hub central chain, additionally it is a productive asset that may be pledged to take part within the safety of the Cosmos Hub and obtain incentives. Nonetheless, the token is just helpful on the Cosmos Hub central chain; it isn’t used to handle and defend different Cosmos multi-chain ecosystem chains. The financial assist it gives can’t proceed indefinitely, and the funds of the group treasury can even be depleted.
Polygon hopes to resolve the aforementioned issues. It might probably proceed to assist its ecological growth by spending 1% of its complete provide annually to the group treasury.
As well as, Polygon additionally turns into POL as hyper-productive tokens, and POL token holders can pledge as verifiers to confirm all Polygon2.0 eco-networks; the function of POL holders can be completely different in several chains, for instance, within the zkEVM chain, POL holders can act as certifiers, producing and presenting zero-knowledge proofs; In a PoS chain, POL holders can act as validators, submitting transactions and producing blocks.
The Staking Layer idea launched by Polygon2.0 is the place verifiers stake POL tokens. Right here, customers pledge POL tokens to enter the validator pool and might take part within the validation of the polygon chain to obtain a validator reward of 1% per 12 months of extra POL issued.
It’s just like the Web2 cloud platform, customers need not fear about which cloud the applying information is saved in? As a validator, you do not want to concentrate to which chain you select to confirm with the intention to improve your reward earnings.
On this respect, POL might be a key asset within the Polygon ecosystem, just like the connection between AVAX and Avalanche and its subnets. Customers pledge to AVAX to grow to be verifiers who can confirm the Avalanche mainnet and its subnets throughout the ecosystem. Nonetheless, in Polygon, verifiers can validate a number of chains, and every chain can present validators with a number of roles and corresponding rewards, which cannot solely be used to confirm transactions on every community, however will also be used to generate zero-knowledge proofs to be submitted to the Ethereum mainnet, and so on.
What token will the Polygon eco-chain use to pay for GAS? The official acknowledged that the Polygon PoS community will use POL as a fee methodology for DUJ charges, whereas different networks might select POL or difficulty their very own native tokens.
Polygon2.0’s imaginative and prescient is to grow to be a community worth layer, merely understood as a Web3 platform layer (corresponding to Cosmos, Polkadot), permitting builders to construct their very own blockchain based mostly on it, offering extra flexibility and energy. DApp platform. Its operate is just like the Web2 cloud service platform.
At present, Polygon2.0 is an L2 layer multi-chain community powered by ZK know-how, and incorporates a set of modules together with consensus and synchronization mechanism, anti-spoofing, and so on., builders can use these modules to construct their very own blockchain community. infinite scalability and unified liquidity, and also can work together throughout chains. For customers, utilizing your complete community is equal to utilizing the circuit.
Moreover, Polygon PoS might be upgraded to zkEVM Validium to be suitable with ZK know-how. At the moment, zkEVM, PoS and Supernets subnets will notice the interoperability of knowledge and worth.
General, Polygon2.0 might be a set of ZK sequence L2 growth networks.
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