In a notable development for the crypto community, the Polygon team has officially kicked off the transition from the MATIC token to the new POL token, marking a significant milestone for the second-layer blockchain network.
The transition, first announced in July, started being executed on Wednesday. MATIC holders saw their coins automatically converted to POL at a 1:1 ratio.
“We interrupt your doomscroll with another reminder – MATIC will be upgraded to POL tomorrow,” the Polygon team tweeted on Wednesday, accompanied by a blog outlining the technical upgrade.
According to the blog, the migration from MATIC to POL is a critical step in aligning Polygon with its vision as an “aggregated network of blockchains.” Notably, in the initial phase, POL will succeed MATIC as the native gas and staking token for the Polygon Proof-of-Stake (PoS) network, with plans for the new token to play a crucial role in the future AggLayer affiliate blockchain aggregation system.
“The technical upgrade from MATIC to POL marks a critical juncture for Polygon networks, enhancing utility and aligning with the vision of Polygon as an aggregated network of blockchains,” the blog post stated, with the Polygon team sharing further details on the migration.
That said, it is important to note that the transition was necessitated by the intentional burning of the MATIC upgrade keys years ago, effectively preventing any further changes to the token.
“The main reason the upgrade was technically necessary is because the MATIC upgrade keys were intentionally burned years ago. That basically means we can’t make changes to that token,” Polygon Labs CEO Marc Boiron stated in an interview on Tuesday.
Meanwhile, the new POL token is expected to change Polygon’s tokenomics, including a reduced annual emission rate of 2% of the total supply. A portion of the issued POL coins will also be used to reward Polygon’s Proof Of Stake (PoS) validators, while the remainder will be directed to the project’s treasury to fund ecosystem development, including a grant program.
Centralized exchanges have already begun rolling out support for the MATIC to POL migration. Binance announced its plans to remove MATIC pairs from its platform on September 10 and replace them with the new POL token on September 13.
Notably, amid the transition, the price of MATIC remained relatively steady, with the coin trading around the $0.38 price range for most of the day despite a 5.34% drop over the past 24 hours.
