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- Polygon has officially transitioned from MATIC to POL, marking the beginning of a new era in the development of the Ethereum Layer-2 network.
- The token’s price has failed to surge following the transition and is forming a descending triangular pattern; if it dips below $0.34, this pattern could break down and lead to a massive drop.
Polygon has finally completed its long-anticipated transition from MATIC tokens to POL, ushering in a new era of development for a project that has emerged as the leader in Ethereum scaling.
As CNF has been reporting, the project has been working on the transition for months, with the final piece of the puzzle happening on Wednesday.
It’s official. The MATIC to POL upgrade is now live, after a year of community-led discussions and consensus 💜
What happens now? Starting today, every transaction on Polygon PoS uses the hyperproductive token as the native gas and staking token.https://t.co/j6vlMTh9ZX pic.twitter.com/hx9l7GS4zv
— Polygon | Aggregated (@0xPolygon) September 4, 2024
Quick Catchup: The migration is part of the network’s redesign, dubbed Polygon 2.0. This redesign necessitates the development of a new token to power the new tokenomics, and POL is the solution. POL is a third-generation ‘hyperproductive’ token that offers all the functions of MATIC (a second-gen token), like staking and gas fees. However, beyond that, it will allow holders to validate multiple chains or serve under multiple roles within one ecosystem (hence the ‘hyperproductive’ label).
The POL Era is Here
The transition was finally completed on Wednesday. Now, users are paying for every transaction on the Polygon network in POL. Validators on the proof-of-stake network are also staking POL to validate transactions and earn rewards and transaction fees.
As we have reported, holders of MATIC on the Polygon network (which is the vast majority) will not need to take any action as the transition will be automatic. However, those who hold MATIC on Ethereum or Polygon’s zkEVM will need to use third-party solutions to transition. Major exchanges have unveiled solutions to assist with the transition, but you can check the tutorial from Polygon here.
However, this was just the beginning. The road that lies ahead for the entire ecosystem is exciting. For one, POL unlocks several developments that MATIC could not, including:
- A portion of the POL emissions is programmed to go to validators to incentivize them, boosting security.
- Another portion will be channelled to boost community growth.
- These portions can be adjusted through community consensus in the future to cater to other causes.
- Validators will be more incentivized, underpinning long-term growth.
Despite the transition, the price of the token has failed to respond. It trades at $0.3652, dipping 2.33% in the past day, a bigger drop than any of the top ten cryptos, which on average recorded a slight gain. The overall market cap, however, dropped 4.63%.
According to Ali Martinez. MATIC has been stuck in a multi-year descending wedge, and its price action over the next few weeks could make or break its long-term momentum. As the renowned analyst points out, dipping below $0.34 could prove disastrous for the token as it would breach the lower trendline of the wedge and possibly dip even further. However, if it holds above this level, $0.94 could be next, which would be a 157% rise from its current price.
#Polygon seems to be forming a descending triangle pattern. Keep a close eye on the $0.34 support level — if it holds, $POL $MATIC could rebound to $0.94.
However, if it breaks, a correction down to $0.19 is possible. pic.twitter.com/70QGdQtsap
— Ali (@ali_charts) September 4, 2024
