What is Polygon?

Since its inception, Polygon has been one of the leaders in Ethereum’s scalability solutions. Its goal is to optimize transaction speed, reduce fees, and address scalability challenges through a multi-chain architecture. In 2024, Polygon announced a major upgrade plan: to upgrade the original main chain Polygon PoS to zkEVM Validium and propose a new architecture for 2.0. One of the most significant changes is upgrading the native token MATIC to POL. This change marks Polygon’s move towards higher levels of decentralization and scalability. POL, as the core driving force of Polygon 2.0, will not only be the payment token for transaction fees but also the central hub for governance and collaboration within the entire ecosystem.

MATIC upgraded to POL

On July 18, 2024, the Polygon officially announced that the community agreed to upgrade MATIC to POL, and planned to upgrade on the mainnet on September 4. This marks the official launch of Polygon 2.0, where POL will become the native token of the new generation Polygon, responsible not only for network transaction fees but also for participating in multi-chain consensus and cross-chain collaboration. This upgrade represents greater scalability and ecological interoperability. In the future, POL staking will not be limited to a single chain but will be able to verify and reach consensus across multiple chains, while participating in the operation of zkEVM and Supernets. This makes POL a truly multifunctional ecological token, driving Polygon towards the future of decentralized internet.

(Source: polygon.technology)

The architecture and design philosophy of Polygon

Polygon 2.0 is a thoroughly redesigned multi-chain network architecture, known as the Value Layer for the Internet, aimed at building an L2 network that can seamlessly cross chains through zkEVM technology to achieve infinite scalability without sacrificing security and user experience. The key lies in the introduction of the Staking Layer, a multi-chain coordination protocol that can manage and scale thousands of Polygon chains, and support decentralized validation. The main goals of Polygon 2.0 include:

• Unlimited scalability: supports an unlimited number of Polygon chains, ensuring that each chain can operate independently without interfering with each other.
• Interoperability: Assets and information between chains can be seamlessly exchanged, reducing the delays and risks associated with traditional cross-chain bridges.
• Decentralized validation: Ensure the security of each chain through the validator network of the Staking Layer, without the need to trust a single node or centralized institution.
• Community governance and incentives: Introducing POL as the core of ecosystem governance, making decisions and incentivizing contributors in a decentralized manner.

Tokenomics of Polygon 2.0

The tokenomics design of Polygon 2.0 is aimed at promoting the sustainable development and decentralization security of the ecosystem. The total supply of POL is fixed, and over time, token rewards are released through staking and network participation. Nodes and users participating in activities such as validation, governance, cross-chain interaction, etc., can earn POL as rewards by providing services, further enhancing the stability and security of the network. In addition, POL stakers can not only receive protocol rewards but also participate in new cross-chain functionalities in the future, including the operation of zkEVM and Supernets. With the expansion of the ecosystem, the demand for POL will also increase, and it is expected to become an important value carrier in the Web3 field.

Token Allocation

The token allocation design of POL is aimed at ensuring the decentralization of the network and the long-term growth of the ecosystem. According to official information, the distribution ratio of POL is as follows:

• Ecosystem development: 40% is used to support ecosystem construction, including developer rewards, partner programs, and community incentives.
• Validator staking: 30% is used for Staking Rewards, incentivizing nodes to validate transactions and ensure network security.
• Team and Advisors: 15% allocated to the core team and advisors, with a long-term unlocking plan in place to ensure long-term commitment.
• Liquidity and Market: 10% is used for market expansion and trading liquidity to enhance trading experience.
• Reserve: 5% is used as an ecological reserve fund for future network upgrades and potential risk response.

Token Utility

POL is the native token of Polygon 2.0, and also the fundamental fuel for the operation of the entire ecosystem. Compared to the past MATIC, POL is more comprehensive and powerful, with the following core use cases:

• Validator Staking: Validators need to stake POL to participate in on-chain consensus to ensure the security and stability of the network.
• Validator Rewards: Validators earn POL as rewards by validating transactions, which includes basic protocol rewards and on-chain transaction fee sharing.
• Community Governance: POL holders have governance rights, can participate in community proposal voting and decision-making, and promote network upgrades and resource allocation.
• Cross-chain Interactions: POL can seamlessly transfer between different Polygon chains and serve as a bridge for cross-chain transactions.

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Summary

Polygon’s evolution demonstrates its deep understanding of future scalability and multi-chain development. By upgrading MATIC to POL, Polygon not only strengthens the scalability and decentralized governance of its network but also injects more value into the ecosystem. Polygon 2.0 will become a crucial infrastructure in the Web3 world, with POL being the core fuel driving this ecosystem.