introduction

Polygon Labs, the company behind the popular Layer 2 scaling solution Polygon, announced the launch of its new token POL on the Ethereum mainnet. The new token is designed to replace the current token MATIC, but the team said that users do not need to exchange MATIC for POL at this time. The POL token upgrade is now live on the Ethereum mainnet. According to blockchain data, the new token was created at 09:06 UTC on October 25 and its full name is "Polygon Ecosystem Token."

The Polygon team claims that POL will power second-layer chains based on zero-knowledge by implementing a "re-staking protocol" that allows token holders to stake on multiple chains and perform multiple functions at the same time. The team emphasizes that POL is not currently used in any system on the Polygon network. Staking on Polygon PoS and Polygon zkEVM is still done through the old token MATIC, and gas fees on the PoS network are still paid by MATIC. Therefore, users, validators, and application developers do not currently need to redeem MATIC for POL.

What is Polygon and why do we need a new token?

Polygon is a platform that provides various scaling solutions for Ethereum and other blockchains. It aims to solve the problems of high fees, low throughput and poor user experience that plague many decentralized applications (DApps) on Ethereum. Polygon provides a modular and flexible framework that supports building multiple types of applications such as optimistic rollups, ZK rollups, independent chains, etc. Polygon claims to be able to achieve up to 65,000 transactions per second on a single sidechain, with block confirmation times of less than two seconds. Polygon is also proud to have the largest and most prosperous ecosystem among Layer 2 solutions, with more than 50 DApps running on its PoS-secured Ethereum sidechain.

However, as Polygon expands its scope and ambitions, it also faces several challenges and limitations related to its current token, MATIC. According to the Polygon team, MATIC is a utility token designed for PoS security and gas fees, but it does not capture the full value proposition of Polygon's diverse ecosystem. In addition, MATIC also has some shortcomings in terms of governance, interoperability, and sustainability. For example, MATIC holders have no direct say in the development and direction of the Polygon network; MATIC cannot be easily transferred between different Layer 2 chains; and MATIC has a fixed supply of 10 billion tokens, which may not be enough to incentivize long-term growth and innovation.

Therefore, the Polygon team decided to introduce a new token, POL, which will serve as the unified currency and governance token for the entire Polygon ecosystem. POL will have a dynamic supply of 100 billion tokens, which will be distributed to users, validators, developers, and community members according to a fair and transparent mechanism to reward their contributions to the Polygon network. POL will also enable cross-chain staking and bridging, staking and transfer between different Layer 2 chains, allowing users to access a variety of services and applications with one token. In addition, POL will also give users the power to participate in the governance of the Polygon network by voting on proposals and influencing key decisions.

How will POL affect MATIC holders?

The Polygon team assures that MATIC holders will not lose any value or functionality due to the introduction of POL. In fact, MATIC holders will benefit from the upgrade as they will receive an equal amount of POL tokens in their wallets. The team says there will be a one-to-one mapping between MATIC and POL tokens, meaning that for every MATIC token a user holds, they will receive one POL token. The team also says there is no deadline or expiration date for exchanging MATIC for POL tokens.

However, the team also recommends that users exchange MATIC for POL tokens as soon as possible, because POL tokens will have more utility and value than MATIC tokens in the future. The team said that once the POL token is fully integrated into the Polygon network, it will become the main currency and governance token for all Layer 2 chains supported by Polygon. This means that users will need POL tokens to pay gas fees, stake for security, access services and applications, and vote on proposals. The team said that over time, the MATIC token will gradually lose its relevance and functionality.

The team also clarified that exchanging MATIC for POL tokens will not affect users’ existing staking positions or rewards on the Polygon PoS or zkEVM networks. Users who stake MATIC tokens on these networks will continue to receive staking rewards in the form of MATIC and POL tokens until they decide to withdraw their stake or migrate to another network.

How do users convert MATIC to POL tokens?

The Polygon team said that they have developed a simple and user-friendly interface for users to exchange MATIC for POL tokens. Users can access the interface through Polygon's official website or wallet. The team said that the exchange process will be fast and secure, and users will not incur any fees or slippage. The team also said that they have cooperated with several exchanges and wallets to support the exchange of MATIC for POL tokens, and they will announce the list of partners soon.

The team also said that they have deployed a "re-staking protocol" that allows users to stake their POL tokens on multiple Layer 2 chains and perform multiple functions at the same time. For example, users can stake their POL tokens on the Polygon zkEVM network to protect the network, pay gas fees, access services and applications, and vote on proposals. Users can also stake their POL tokens on other Layer 2 chains supported by Polygon, such as Arbitrum, Optimism, StarkWare, etc. The team said that this protocol will enable users to maximize the returns and utility of their POL tokens.

What are the advantages and challenges of POL tokens?

The Polygon team says that the POL token will bring many advantages and benefits to the Polygon network and its users. Some of the main advantages are:

  • The POL token will unify the currency and governance of the Polygon ecosystem, creating a more cohesive and coherent network.

  • POL tokens will enable cross-chain staking and bridging, staking and transfer between different Layer 2 chains, and enhance the interoperability and compatibility of the Polygon network.

  • The POL token will have a dynamic supply of 100 billion tokens, which will be distributed to users, validators, developers, and community members according to a fair and transparent mechanism to incentivize their contributions to the Polygon network.

  • POL tokens will give users the power to participate in the governance of the Polygon network by voting on proposals and influencing key decisions.

However, POL tokens also face some challenges and risks. Some of the main challenges are:

  • The POL token will need to compete with other Layer 2 tokens on the market, such as Arbitrum’s ARB, Optimism’s OVM, StarkWare’s STARK, etc. These tokens may have different features and value propositions that may attract more users and developers.

  • The POL token will need to gain recognition and adoption from existing MATIC holders and users as well as new potential users and developers. The team will need to educate and inform the community about the advantages and benefits of the POL token over the MATIC token.

  • The POL token will need to ensure its security and stability on the Polygon network as well as other Layer 2 chains. The team will need to monitor and prevent any attacks or exploits that may occur on the network or token.

in conclusion

Polygon Labs has launched its new token POL on the Ethereum mainnet, which will replace its current token MATIC as the currency and governance token of the Polygon ecosystem. The POL token will enable cross-chain staking and bridging, staking and transfer between different Layer 2 chains, and empower users to participate in the governance of the Polygon network. MATIC holders will receive an equal amount of POL tokens in their wallets, but they are advised to exchange MATIC for POL tokens as soon as possible. The team said that the POL token will bring many advantages and benefits to the Polygon network and its users, but it also faces some challenges and risks in the market.