Polygon to burn part of its transaction fees, following Ethereum and Binance Smart Chain

Polygon (MATIC) developers rolled out in the Mumbai testnet a mechanism to burn part of transaction fees, mirroring the Ethereum network’s EIP-1559 upgrade.

In the Ethereum network, EIP-1559 was activated during the London hard fork, which took place on August 5, 2021. The upgrade introduced burning of a portion of fees depending on network load and reduced gas price volatility.

Because the token supply of the MATIC network is fixed at 10 billion, any reduction in the number of available tokens will have a deflationary effect, the protocol team noted.

According to analysis, annual burn is expected to be 0.27% of total MATIC supply.

Polygon stated that the deflationary effect would benefit both validators and delegators, since they receive rewards for processing transactions in the network’s tokens.

Users dapps on the blockchain will get more predictable gas prices, the developers noted.

On December 1, 2021, the Binance Smart Chain network also activated the token burn mechanism during the Bruno hard fork.

Earlier, the Polygon team announced a new Layer 2 solution for Ethereum based on ZK-Rollups technology and released its central component — the virtual machine that uses the zk-STARKs protocol as the base proof system.

According to Ultrasound Money, more than 1 million ETH has been burned on the Ethereum network.

As reported in the service, the supply of the second-largest cryptocurrency in the first half of 2022 will reach a peak, and then the asset will become deflationary.

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