What is Polygon Ecosystem Token (POL)?

The Polygon ecosystem is on the cusp of a significant transformation with a proposal to transition its native token from MATIC to POL. This proposed change aims to enhance the utility and functionality within the network. POL, poised to become the upgraded native token of the Polygon ecosystem, is designed to facilitate a broad spectrum of activities central to network operations, including participation and bolstering network security. As an integral part of the ecosystem, POL will allow stakeholders to actively engage as validators through staking, thereby contributing to the overall health and security of the network.

The POL token, mirroring many of MATIC’s characteristics, will be based on OpenZeppelin’s ERC20 implementations and will support EIP-2612 for signature-based permit approvals. This transition is planned to be seamless, ensuring compatibility and continuity for node operators, delegators, and application developers within the Polygon ecosystem. The initial supply of POL tokens is set to be 10 billion, maintaining a 1:1 ratio with the existing supply of MATIC, symbolising a direct upgrade rather than the introduction of an entirely new token.

Polygon Ecosystem Token (POL)

Blockchain records show that the “Polygon Ecosystem Token,” commonly referred to as POL, was established on October 25, 2023 at 9:06 am UTC. The Polygon team’s recent announcement highlighted POL’s role in energising an extensive network of Layer 2 chains based on zero-knowledge technology. A notable feature of POL is its “re-staking protocol,” which offers token holders the flexibility to stake across multiple chains, enabling diverse functionalities.

The introduction of POL marks a significant step in the progression of the Polygon 2.0 roadmap. This includes the development of a new staking layer within the Polygon ecosystem, transitioning the existing PoS network to a zkEVM Layer-2 structure, and establishing a unified liquidity protocol that spans all Polygon networks, as per the team’s statement.

It is important to note, as the team clarified, that POL is not yet in operational use within the Polygon network, but it is set to migrate on September 4th, 2024. The current staking processes on Polygon PoS and Polygon zkEVM are still conducted with the original token, MATIC, which is also still being used to pay gas fees on the PoS network. Once the migration takes place on September 4th, users and exchanges will need to switch their MATIC to POL tokens.

Polygon Labs initially unveiled plans for developing this new Layer-2 ecosystem, termed “Polygon 2.0,” on June 29, 2023. Subsequently, on September 14th, 2023 the introduction of a new token, POL, for Polygon 2.0 was announced. However, at that time, POL was merely a proposed idea and had not yet been launched on the Ethereum network.

How will Polygon Work after the Polygon Ecosystem Token Upgrade?

The Polygon Ecosystem Token (POL) is set to bring several significant enhancements to the Polygon network, aligning with a series of well-defined design goals.

First and foremost, POL aims to bolster ecosystem security. It’s designed to create a large, decentralised pool of validators to run and secure any Polygon chain, rewarding validators for their contributions and penalising any malicious activities. Secondly, POL is integral to achieving infinite scalability within the Polygon ecosystem. It supports the expansion of the validator pool, enabling the network to potentially manage thousands of Polygon chains, a crucial step towards what is termed as “hyperblockchainization.”

In terms of ecosystem support, POL is expected to play a vital role in establishing a self-sustaining economic model for Polygon’s ongoing development and growth. This aspect is particularly important as Polygon positions itself as a global network, requiring continuous innovation and expansion.

POL is also designed to minimise friction commonly associated with blockchain networks, where users and developers often need to hold, stake, or consume native tokens. This approach aims to enhance the overall user and developer experience. Lastly, POL is envisioned to facilitate community ownership, with governance rights assigned to POL holders, enabling them to participate actively in decision-making processes that shape the Polygon ecosystem.

From a utility perspective, POL serves multiple functions. Validators will be required to stake POL to join the validator pool, increasing the ecosystem’s security through mechanisms like preventing Sybil attacks and enabling slashing for malicious validators. To incentivize validators, POL will be distributed as protocol rewards, proportional to the amount staked.

Additionally, POL will be a key component in governance, allowing holders to participate in the governance frameworks of Polygon. The initial supply of POL is set to match that of MATIC at 10 billion tokens, ensuring a straightforward migration process. This migration is crucial for POL to succeed MATIC as Polygon’s native token, with the transition not starting until Q1 2024, after the community-supported upgrade in Q4 2023.

Regarding supply and emission, POL features a predefined emission rate, serving two primary purposes: validator rewards and ecosystem support. The proposed yearly emission rate of 1% of the POL supply for each purpose ensures a balance between providing adequate support to the ecosystem and maintaining token scarcity, a vital aspect for network security and market attractiveness. This emission policy, predictable and potentially modifiable by community governance, aims to nurture a stable and attractive economic environment conducive to the growth and adoption of the Polygon ecosystem.

After the POL Upgrade Why Will Polygon Be Unique?

The POL upgrade will make Polygon a unique and advanced blockchain platform, offering a combination of high scalability, enhanced security, innovative economic models, and a frictionless experience, all governed by a community-driven approach. These attributes are set to position Polygon at the forefront of blockchain technology, especially for large-scale and diverse applications.

The POL upgrade focuses on enhancing ecosystem security through a broader, more decentralised validator pool. This will fortify the network against attacks and align validators’ interests with the ecosystem’s success, ensuring a more robust and secure platform.

With POL, Polygon aims to achieve unprecedented scalability, supporting the growth of the network to potentially thousands of chains. This level of scalability, dubbed “hyperblockchainisation,” positions Polygon as a leading solution for large-scale blockchain applications and mass adoption.

The introduction of a re-staking protocol with POL allows stakeholders to stake across multiple chains within the ecosystem. This multi-chain staking capability not only enhances security but also optimises resource utilisation, making Polygon highly efficient.

What will the Polygon Ecosystem be Like After the POL Upgrade?

POL will enhance Polygon ecosystem security through a highly decentralised pool of Proof-of-Stake (PoS) validators, who are incentivized to secure a multitude of chains within the Polygon network. This design aims to achieve infinite scalability, supporting the exponential growth of the Polygon ecosystem and paving the way for mainstream adoption. POL also supports the ecosystem by establishing a sustainable, in-protocol mechanism for ongoing development and growth activities, governed by the Polygon community. This community-driven approach ensures that the ecosystem evolves with decentralisation at its core.

The multifaceted utility of POL revolves around its role in validator incentivisation. Validators are required to stake POL to join the validator set, contributing to the network’s security through mechanisms such as Sybil attack prevention, alignment with ecosystem success, and slashing for misconduct. In return, validators can earn rewards through protocol emissions, transaction fees, and additional incentives offered by individual Polygon chains. This broad definition of validation roles, including tasks like zero-knowledge proof generation and participation in Data Availability Committees, enhances the value proposition of being a validator in the Polygon ecosystem.

To future-proof the ecosystem and support its growth until Web3 reaches mass adoption, a continuous emission of POL is proposed to fund a Community Treasury. This fund will be vital for protocol development, research, ecosystem grants, and adoption incentives, with governance vested in the Polygon community. The transition from MATIC to POL is planned as a seamless upgrade, requiring token holders to exchange MATIC for POL through a straightforward technical process, with ample time provided for the migration.

What is the POL Token?

The POL token is a proposed technical upgrade to the native asset of the Polygon network, intended to enhance and expand the network’s infrastructure and functionality. This new token is part of a broader initiative to transform Polygon into the “Value Layer of the Internet,” a vision that encompasses a more robust and scalable ecosystem. 

POL is designed as a ‘hyperproductive’ token, an evolution beyond traditional productive tokens like Ethereum’s ETH. It allows its holders to engage in the network not just as validators but also in multiple roles across various chains within the Polygon ecosystem. Some of the key characteristics of the POL token include:

• Validator Participation: POL enables holders to participate as validators in the network. This involves staking POL tokens, which contributes to the security and integrity of the Polygon ecosystem. The staking mechanism is essential for preventing Sybil attacks, aligning validators with the ecosystem’s success, and enabling punitive measures against malicious activities.

• Multi-Chain Validation and Rewards: A distinctive feature of POL is the ability for validators to validate multiple chains within the Polygon network. This multi-chain validation capability vastly increases the scalability of the ecosystem and offers validators the opportunity to earn rewards from various sources, including protocol rewards, transaction fees, and additional incentives provided by individual chains.

• Community Governance and Ecosystem Support: As a hyperproductive token, POL is also geared towards enabling community governance. Holders of POL will have governance rights, allowing them to participate in decision-making processes that shape the future of the Polygon ecosystem. Moreover, POL aims to establish a self-sustaining funding mechanism for ongoing development, research, and ecosystem growth.

• Seamless User Experience: Designed to minimise friction for both users and developers, POL is structured to facilitate easy interaction with the Polygon network, enhancing the overall experience and accessibility.

• Emission Policy for Ecosystem Funding: POL will have a predetermined emission rate to support validator rewards and a Community Treasury. This Treasury, governed by the Polygon community, is intended to fund various activities crucial for the ecosystem’s advancement, including protocol development and adoption incentives.

Polygon Ecosystem Token (POL) Tokenomics

• Upgrade and Replacement of MATIC: POL is not a completely new token; rather, it is an upgraded and renamed version of the existing MATIC token. In the Polygon ecosystem, MATIC and POL are not intended to coexist. Instead, POL will replace MATIC as the native token. This transition marks a significant shift in the token’s utility and role within the network, aligning with the broader goals of Polygon’s strategic evolution.

• Introduction of the Community Treasury: The Community Treasury is a new mechanism being introduced alongside POL. Its purpose is not to supplement the Polygon Foundation’s funds but to provide a self-sustaining support system for the Polygon ecosystem. The Community Treasury is envisioned as an independent entity that will bolster Polygon’s position in the competitive blockchain infrastructure market. This Treasury will be key in responding to the emergence of new infrastructure protocols with substantial token reserves. Additionally, it aims to enhance transparency, decentralisation, and community involvement in the Polygon ecosystem, ensuring that the network remains competitive and adaptive.

• Use of POL for Gas Fees: The use of POL for gas fees will depend on the individual choices of each chain within the Polygon ecosystem. While some chains might opt to use POL for gas fees, this is not a fixed or universal application for the token. Specifically, for the Polygon Proof of Stake (PoS) chain, the transition to POL implies that it could become one of the chains using POL for gas fees.

Join the converstation to discuss POL in our Discord!

How to buy POL with crypto

1. Log in to your Bitfinex account or sign up to create one.

2. Go to the Deposit page.

3. In the Cryptocurrencies section, choose the crypto you plan to buy POL with and generate a deposit address on the Exchange wallet.

4. Send the crypto to the generated deposit address.

5. Once the funds arrive in your wallet, you can trade them for POL. Learn how to trade on Bitfinex here.

How to buy POL with fiat

1. Log in to your Bitfinex account or sign up to create one.

2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.

3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.

4. Check your Bitfinex registered email for the wire details.

5. Send the funds.

6. Once the funds arrive in your wallet, you can use them to buy POL.

How to convert your MATIC tokens to POL on Bitfinex

1. As part of Polygon (MATIC) migration to Polygon Ecosystem Token (POL), Bitfinex has also enabled new currency conversion tools on its Wallets Page allowing customers to seamlessly swap between Polygon MATIC ERC-20 (Ticker: MATIC), Polygon MATIC Mainnet PoS (Ticker: MATICM) and Polygon Ecosystem Token (Ticker: POL).

2. Specifically:

• from MATICM to POL
• from MATIC to POL
• from MATICM to MATIC, and vice versa (already supported)

3. Bitfinex will not convert MATIC or MATICM to POL on behalf of customers. Customers may use the currency conversion tools to do this at their own discretion at any time after 04/09/2024 at 10:00 AM UTC.

Also, we have Bitfinex on mobile, so you can easily buy POL currency while on-the-go.

[AppStore]  [Google Play]

POL Community Channels

Website | Twitter | Discord | Reddit | Github | Instagram | Youtube | Telegram | Linkedin 

The post What is Polygon Ecosystem Token (POL)? appeared first on Bitfinex blog.