- MATIC has seen repressed price action in the current cycle and is ranging around June 2022 lows.
- MATIC holders will be able to convert their balances to the multipurpose POL token in September.
Polygon [MATIC] has been in the process of transitioning from its current state to a more advanced decentralized system.
Polygon 2.0, unveiled in June 2023, entails a set of proposed upgrades redefining Polygon’s tokenomics, protocol architecture, and governance aspects.
The upgrades also involve enhancements to the network’s consensus mechanism, ensuring it can support the anticipated growth and scaling demands.
Polygon’s ambitions to become a multi-chain solution
Polygon 2.0 introduces a new architecture focusing on unlimited scalability and unifying liquidity across multiple chains within the Polygon network. Foundational steps started last year by establishing the infrastructure enabling this vision of an elaborate ecosystem.
In September 2023, Polygon Labs released its first set of Polygon Improvement Proposals (PIPs), marking the beginning of the implementation of Polygon 2.0.
A month later, in October, Polygon’s development team deployed the smart contracts governing the new Polygon ecosystem token (POL) on the Ethereum mainnet.
Hyperproductive POL token
From a technical standpoint, the next-generation POL token will be based on a new smart contract standard to enable efficient and flexible operations within the Polygon ecosystem.
POL has an initial supply cap of 10 billion tokens, with an annual emission rate of 1% for the next ten years.
POL will be a versatile utility token facilitating better scalability and governance across multiple chains.
POL holders will additionally be able to participate in securing Polygon chains through a more advanced decentralized staking model which offers better rewards to stakers.
MATIC to POL migration
The MATIC to POL upgrade, confirmed for September 4 in line with initial projections, will usher in a new system where POL replaces MATIC as the native gas and staking token for the Polygon PoS network.
MATIC token, itself rebranded before, has been the backbone of the Polygon ecosystem.
The upgrade will allow users to swap their tokens and is a significant milestone in the Polygon 2.0 roadmap because it represents the actual shift in the network’s tokenomics and governance.
As part of the phasing-out process over the next 4 years, MATIC holders will need to run a swap transaction (1:1 swap ratio) to transfer their balances to the upgrade smart contract, after which MATIC will cease to exist.
MATIC price action
Polygon’s MATIC has been one of the hardest-hit alts in the current market cycle. MATIC held onto the $0.61 support between April and June before breaking out of this multi-month consolidation.
Source: TradingView
Thus far in August, the token has erased 10% of its value and could be set for more losses amid prevailing volatility. IntoTheBlock data shows only 2% of all MATIC holders are in profit, with another 1% breaking even at current prices.
Though MATIC/USDT has bounced off the $0.334 support established on 5th August, its price action remains concerning. On the 4-hour chart, the pair has been moving sideways between $0.38 and $0.42 for three weeks now.
Source: TradingView
Still, the near-term outlook is not all bleak. Bullish speculators target the $0.50 psychological level for more upside as it previously provided support between July 2023 and August 2024.
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