The news from the block is that we're stepping another inch closer to the vividly portrayed dream of cross-chain operations and services.
Spearheaded by the OG L2s and sidechains, the Ethereum ecosystem is no short of layers 02 chains scaling transaction throughputs to giga values. At the time of writing, heated discussions and calculated decisions are being crafted around the concept of 'interoperability'. We're way past the bubble of mono-chain supremacy and every other app cooking up in the ecosystem needs super-tuned highways for data transfer across multiple chains to even compete with their mainstream Web 2.0 counterparts.
A promising development on this front has come from the house of Polygon, with their proposals for a Polygon 2.0 architecture aimed at developing a network of interconnected zero knowledge-powered L2 chains that scale Ethereum to the size of the Internet [1]. The proposals (Polygon Improvement Proposal - PIP) outline an integral element of this architecture - a technical upgrade to the native ecosystem token MATIC.
MATIC had long been the native token on Polygon before the network even took on that name. MATIC has been the gas token on the Poygon POS network and has also been used for staking to validate the chain. Polygon 2.0 architecture pushes to upgrade this token to a hyper-productive token that can power the 'Value layer of the Internet', proposing a successor to MATIC - POL [2].
With the release of the Polygon chain development kit - the CDK, it has become incredibly easy to spin up production-ready ZK-powered L2s, tailored to distinct use cases. As a matter of fact, we have already seen numerous L2s and VMs brought forth via CDK - Immutable zkEVM, and OKX's xLayer to name a few. Each of these chains plays a substantial role in conceiving the 'Value layer of the Internet' and Polygon 2.0 aims to make things super-easy for these chains to cooperate and communicate openly with each other, with the Polygon Mainnet and with Ethereum L1. What drives this vision to fruition is an upgraded token capable of coordinating and securing the ecosystem maturation - POL.
POL is suggested as a third-generation token built upon the footings of first-gen BTC and the successor- ETH. MATIC, for the most part, has been as productive as ETH, allowing holders to secure the network (POS Mainnet) by staking their token and in return incentivising them with more MATIC tokens. Now this would have been perfect in a monolithic POS environment, but the Polygon Mainnet itself is upgrading to a ZK-powered rollup to form a supernet with the other Polygon CDK chains. The new formulations of this ecosystem demand robust tokenomics to meet the compelling and dynamic considerations for growth and expansion, and MATIC alone wouldn't fare well at that.
This proposed new token, still an ERC20, would set itself apart in two perceptible ways [2] :
POL would allow the token holders to stake and secure any chain in the Polygon supernet i.e. be a validator, run and secure any Polygon CDK chain.
Every chain can tailor additional offerings and rewards to attract more validators and further improve the security of the network
With the proposed set-up of Polygon 2.0 architecture, POL can help ensure a well-decentralized pool of validators running and securing technically, any number of polygon chains, besides the base protocol, facilitating the scalability and the growth of the network manifold. This also remains intensely beneficial to the validators who now have exposure to multiple reward lanes from the different CDK chains.
POL would also facilitate community-run governance of important aspects of the Polygon ecosystem.
The initial supply of POL is set to 10 billion tokens, to match that of MATIC, one-to-one, and the entirety of the fund will be dedicated to migration from MATIC. Following a successful migration, POL will be released at an annual emission rate of 1% separately for validator rewards and ecosystem support, for a period of 10 years. This timeline is fixated to accommodate for the Polygon ecosystem growth as well the industrial maturation. It's expected that, in the set period, the ecosystem would scale legibly to allow the network transaction fees and other rewards alone to sufficiently incentivize the validators to keep staking and securing the network. At the onset of such a state, the community can govern over the further emission of POL tokens, to either reduce its emission rate or to stop it altogether, but never going abroad over the set rate of 1%.[3]
Given the initial supply of POL, matching that of MATIC, migration becomes pretty straightforward. There is no action needed from users holding MATIC on Polygon POS as the entire MATIC on the mainnet would get automatically upgraded to POL, irrespective of whether the toen is held in a self-custody wallet, centralized exchanges or locked in vesting contracts.
MATIC holders on Ethereum L1 can use the live Polygon Portal Interface for seamless token upgrades. Users holding MATIC on Polygon zkEVM are also advised to use the Polygon Portal Interface, after bridging the MATIC tokens to Ethereum L1.
Currently, there are no set deadlines for MATIC to POL migration and everyone is allowed to progress with the process at their own pace. Further information and recommendations on MATIC-POL migration can be found in Polygon's detailed blog.[4]
The POL-powered Polygon 2.0, introduces a novel, infinitely scalable, and seamlessly interconnected network of Layer2 chains. The drafted tokenomics of POL aims to supercharge this vision and accelerate its consummation. Being one major pit-stop on that roadmap to Polygon2.0, the MATIC - POL upgrade, is bringing us closer to facilitating better user experiences, both on and off-chains, via cross-chain interoprability. The future is bright and Polygon2.0 is for sure, something I'm counting down to.
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/ nandagopan .