Can Polygon 2.0 Maintain the Legacy Amidst MATIC’s Evolution and Frequent Management Transitions?

Polygon formally launched the white paper on the financial mannequin of Polygon 2.0’s native new token POL. POL shouldn’t be a brand new token, however an improve from the unique MATIC token. The brand new POL token will run in all Polygon ecological networks, together with Polygon PoS, Polygon zkEVM, Polygon Supernets, and many others. At the moment, MATIC token holders will change it for POL at a ratio of 1:1.

The value of MATIC rose in opposition to the sound, with a 24-hour enhance of 18%, and the present citation is $0.86.

Nonetheless, within the white paper, the preliminary whole quantity of POL is 10 billion, and it will likely be issued at an annual fee of two% within the subsequent 10 years, which implies that the entire quantity of POL tokens has exceeded the entire quantity of 10 billion MATIC tokens. This has brought about dissatisfaction amongst MATIC holders, who consider that this has diluted the unique worth of MATIC.

In accordance with CoinGecko knowledge, at current, the entire circulation of MATIC is 9.319 billion items, and the present market worth is 8 billion US {dollars}, rating eleventh amongst encrypted property.

How is the POL token totally different from the unique MATIC? What position does POL play in Polygon2.0? What are the upgrades of Polygon2.0?

POL token is a vital a part of the Polygon2.0 roadmap, and it’s also essentially the most involved factor for group customers, as a result of as soon as MATIC’s plan to improve POL is formally carried out, it would imply that the narrative logic (comparable to utility and worth) of MATIC tokens will probably be modified. will change. However the hidden POL issuance in its white paper has brought about controversy.

Within the white paper, the availability mannequin of POL will include two components: preliminary provide and continued issuance. Amongst them, the entire preliminary issuance is 10 billion items, all of that are used for upgrading and exchanging MATIC tokens. As well as, POL will even enhance issuance at a relentless fee of two% yearly, and the rise fee will stay unchanged for at the very least 10 years. As for the adjustment of the rise fee after 10 years, it will likely be decided in line with the particular state of affairs. Extra issuance could also be suspended.

There are two essential functions for the extra issuance, together with validator rewards and ecosystem fund improvement. The previous distributes 1% of the availability of POL’s annual enhance fee as a primary protocol reward to verifiers to encourage verifiers to hitch. The latter can be a 1% ecosystem fund that will probably be issued yearly to proceed to assist the additional improvement and development of the Polygon ecosystem. Within the first 10 years, the issuance fee can’t be modified. After 10 years, the group can resolve to cut back the issuance fee worth in any means via the governance framework, nevertheless it won’t exceed 1%.

This implies that previously 10 years, POL will subject 200 million extra tokens annually, plus the preliminary provide of 10 billion tokens, and the entire quantity of POL tokens has exceeded the higher restrict of MATIC.

This makes MATIC holders fairly dissatisfied, considering that the extra issuance of POL will dilute the unique worth of MATIC, why not select to immediately make MATIC tokens extra beneficial, pointless.

Some customers stated that it ought to be that Polygon has no cash formally and desires to ship cash to itself via the brand new token POL. As a result of 93% of MATIC is presently in circulation within the secondary market, the Polygon staff doesn’t have sufficient Tokens to stimulate consumer development and utility adoption of Polygon ZkEVM, and now they will solely subject new cash.

The official clarification for that is that the precept of POL’s issuance and issuance fee setting is as a result of the Polygon ecosystem and Web3 improvement want time to mature and obtain mainstream adoption. Based mostly on historic adoption cycles of the Web and computing platforms, the maturity section could take round 10-15 years. Throughout this era, the ecosystem wants steady financial assist.

When the Polygon ecosystem and Net 3 attain a mature stage, when the transaction charges and different incentives obtained by verifying the varied chains of the Polygon ecosystem can have ample returns, the group can resolve to cut back or utterly cease the issuance of extra rewards for verifiers. Equally, as soon as The ecosystem now not wants extra financial assist, and the group may resolve to cut back or cease extra issuance to the group treasury.

Clearly, the adoption cycle of Web3 could also be barely totally different or utterly totally different from the historical past of the Web. If it seems that reaching mainstream adoption takes longer, and the ecosystem nonetheless wants assist 10 years from now, the group can select to not intervene at the moment, or it could select to regulate the issuance fee as wanted.

This appears to coincide with the consumer’s guess that “the Polygon staff doesn’t have sufficient Tokens to encourage the consumer development and utility adoption of Polygon ZkEVM, and now it could solely subject new cash”.

Because the announcement of the Polygon 2.0 plan, Polygon’s technique has reworked from a single block community to an L2 multi-chain community ecosystem pushed by ZK Rollup, together with Polygon PoS, Polygon zkEVM and varied sub-networks primarily based on Polygon Supernets. POL tokens will run in its complete community ecology.

Within the white paper, the official stated that POL is the third-generation Token after BTC and ETH. Polygon explains this:

Though BTC is the primary technology of native tokens, it’s primarily used to pay gasoline charges and miner rewards on the chain, however for holders, it can’t be used as a productive asset (comparable to pledge as a verification node), nor does it have any governance energy .

ETH is a productive asset. Ethereum’s PoS mechanism helps ETH holders to pledge it, take part within the safety of community safety, and thus get incentives, however its provide can’t be predicted. As well as, it’s allotted to the administration basis. The provision of tokens will probably be depleted, and assist for the ecosystem will stop.

Like ATOM, because the native token of the Cosmos Hub central chain, it’s also a productive asset that may be pledged to take part within the safety of the Cosmos Hub and get incentives. However the token is simply helpful throughout the Cosmos Hub central chain; it’s not used to run and safe different chains within the Cosmos multi-chain ecosystem. The financial assist it facilitates can not proceed indefinitely, and the funds of the group treasury will even be depleted do.

Polygon hopes to unravel the above issues. It could proceed to assist its ecological improvement by issuing 1% of the entire provide to the group treasury yearly.

As well as, Polygon additionally turns into POL as hyperproductive tokens, and POL token holders can pledge as verifiers to confirm all Polygon2.0 ecological networks; on totally different chains, the position of POL holders can be totally different, comparable to on the zkEVM chain, POL holders can act as certifiers to generate and submit zero-knowledge proofs; on the PoS chain, POL holders can act as verifiers to submit transactions and generate blocks.

The idea of Staking Layer launched by Polygon2.0 is the place the place verifiers pledge POL tokens. Right here, customers pledge POL tokens to enter the verifier pool, and might take part within the verification of the Polygon chain to acquire verifier rewards, which is 1 per yr % extra POL issued.

That is much like the cloud platform of Web2, customers don’t must care which cloud the App knowledge is saved on? As a verifier, you don’t want to concentrate to which chain you select to confirm to maximise the reward revenue.

From this perspective, POL would be the primary asset within the Polygon ecosystem, much like the connection between AVAX and Avalanche and its subnets. Customers pledge AVAX to turn out to be validators, which may confirm the Avalanche mainnet and its subnets throughout the ecosystem. However in Polygon, verifiers can confirm a number of chains, and every chain can present verifiers with a number of roles and corresponding rewards, which cannot solely be used to confirm transactions in every community, but in addition can be utilized to generate zero-knowledge proofs to undergo Ethereum mainnet, and many others.

Which token will the Polygon ecological chain use to pay for GAS? The official said that the Polygon PoS chain will use POL because the fee technique for GAS charges, and different chains can select POL or subject their very own native tokens.

The imaginative and prescient of Polygon2.0 is to turn out to be the worth layer of the community, merely understood because the platform layer of Web3 (comparable to Cosmos, Polkadot), permitting builders to construct their very own block community primarily based on this, offering a extra versatile and highly effective platform for DApp . Its operate is much like Web2’s cloud service platform.

At present, Polygon2.0 is an L2 layer multi-chain community pushed by ZK know-how, and introduces a set of modules, together with consensus and synchronization mechanism, fraud proof, and many others., builders can use these modules to construct their very own blockchain community , has infinite scalability and unified liquidity, and may work together throughout chains. For customers, utilizing all the community is like utilizing a sequence.

Amongst them, Polygon PoS will probably be upgraded to zkEVM Validium to make it appropriate with ZK know-how. At the moment, zkEVM, PoS and Supernets sub-networks will understand info and worth interoperability.

Typically, Polygon2.0 will probably be a set of L2 enlargement networks of the ZK collection.