MATIC and POL

The community-driven upgrade comes at a critical time, and every aspect of the network is changing. Polygon becomes an aggregate network through AggLayer, unifying liquidity and state across an entire network of chains. AggLayer solves the problem of blockchain fragmentation by allowing sovereign chains to securely share liquidity, users, and state.

If the Agg concept, currently undergoing Polygon Improvement Proposal (Pre-PIP) discussions, is approved by the community, it will allow Polygon PoS to connect to AggLayer and evolve into a ZK chain, thereby integrating POL into the wider aggregate network.

Overall, the migration to POL not only updated the token for the Polygon PoS network, but also allowed future upgrade phases to expand the utility of the native token to support more aggregated blockchains.

At its core, POL is a hyper-productivity token that allows validators to participate in multiple chains and take on different roles within the network. At the same time, it is a utility token that, subject to community consensus in the future, will play a larger role in various aspects beyond securing a single network.

In the first phase of the migration, according to community consensus, POL will replace MATIC as the native token for gas fees and staking for Polygon PoS. Subsequent phases will be determined by the community, but in any case, POL will play an important role.

Changes and innovations

The update has already brought many innovations:

  • Backwards compatibility. This aspect ensures that existing applications and users can make a smooth transition without disruptions, which will ease the upgrade process and keep the Polygon network stable. Overall, this makes the transition from MATIC to POL much easier for validators, delegates, applications, and users.

  • The native token for gas fees and staking for Polygon PoS. POL now secures the Polygon PoS network, and every transaction on the network is done using POL.

  • Future utility for the aggregate network, if the community decides to go that route. There are already plans for a staking hub in 2025, and in the long term, POL will be able to support more complex models on the aggregate network.

  • Tokenomics Changes: A change subject to community approval involves issuing 2% over a decade to support network security and community development. Half of the tokens will go to the Polygon PoS staking contract to reward validators who secure the network, and the other half will go to a community budget that supports developers through a grant program. This issuance model will continue for as long as needed, with the community having the ability to adjust or discontinue it based on changing needs.

So now, while the community is trying to implement the idea of ​​an aggregated Web3, the network already has a native token that will help ensure its security and support the implementation of this idea. And as Polygon continues to evolve into a multifaceted aggregated network, POL will be an important part of it: it will be used as the native token for staking and gas in Polygon PoS, and therefore will be fundamental to the security of the Polygon network.

Overall, we are talking about major changes that affect all network participants. What will happen to them?

  • There is no action required from MATIC holders on Polygon PoS. MATIC will be automatically updated to become the native token for gas fees and staking on Polygon PoS. However, users will need to update the token symbol in their wallet settings. If the symbol is not updated, the wallet may continue to display MATIC as the token name.

  • MATIC holders on Ethereum need to migrate to POL via the Polygon Portal interface.

  • For oracles, DeFi protocols, smart contract developers, wallets, bridges, and RPC providers, things are a bit more complicated. They will need to go through additional procedures, which are described in the blog post in the documentation.

Conclusion

Overall, the transition from MATIC to POL marks the beginning of a journey towards a complex system of aggregated solutions. The migration provides a suitable basis for further transformations.