Polygon Initiates MATIC to POL Conversion

On September 4, developers of the Polygon Layer 2 network launched an update to convert the blockchain’s utility token MATIC to POL at a 1:1 ratio.

we interrupt your doomscroll with another reminder MATIC will be upgraded to POL tomorrow ?

the tl;dr for the hyperproductive token: https://t.co/brdQT9WeFa pic.twitter.com/D63qiqdZPX

— Polygon | Aggregated (@0xPolygon) September 3, 2024

The project’s team set the conversion date in July. For most asset holders, the migration will occur automatically, though it can be done manually via the portal.

Initially, POL will replace MATIC as the primary means for staking and gas payments in the Polygon PoS network.

In the future, the new token is expected to play a significant role in the aggregation system of affiliated blockchains AggLayer.

The transition will also bring changes to tokenomics. The annual issuance will be 2% of the supply. Part of the minted coins will reward Polygon PoS validators, while the rest will go to the project’s treasury to form an independent ecosystem fund.

“The main reason the upgrade was technically necessary is that the MATIC upgrade keys were intentionally burned many years ago. This essentially means we cannot make changes to this token,” explained Polygon Labs CEO Marc Boiron in an interview with CoinDesk.

One of the goals was to modify the issuance to allow funds to be used for ecosystem development, including a grant program, he added.

Polygon noted that centralized exchanges will follow their own timelines for updating MATIC to POL. Users are advised to check information from the platforms.

At the end of August, Binance announced support for the migration. On September 10, the exchange will delist pairs with MATIC. Trading of the new Polygon token against the same assets will commence on September 13.

Over the past 24 hours, the price of MATIC has dropped 8%, outpacing the decline of Bitcoin (4.5%) and the market overall (5.1%).

The token is trading near $0.375, with a market capitalization of approximately $3.7 billion.

In February, Polygon Foundation received the final 273 million MATIC, unlocked from a vesting contract.