Polygon Activates EIP-1559 Hardfork – Crypto Briefing

Polygon has launched EIP-1559 to initiate the real-time burning of MATIC tokens.

EIP-1559 Goes Live on Polygon

Ethereum sidechain network, Polygon has initiated EIP-1559, also called “London Hardfork.”

The update was activated at block height 23850000 at 2:48 am UTC. It replaces Polygon’s previous fee system based on “auctions” with a model that relies on a base fee.

EIP-1559 on Polygon introduces the concept of base fee–an estimated amount of needed for a transaction to be accepted for block validation.

EIP-1559 makes the network fee system more predictable and stable against demand shocks. The base fee amount is adjusted up and down by the protocol based on how congested the network is. This also allows Web3 wallets to automatically adjust the gas fees for users in a reliable manner. 

The Polygon team hopes EIP-1559 will address frequent fee spikes that may affect users’ ability to make transactions on the network.

Instead of paying fee to its validators, EIP-1559 enforces each transaction to burn the base fee paid in MATIC token. The new fee system compensates validators with small priority fee acting as an incentive for them. 

EIP-1559 was launched first on Ethereum as part of the network’s London hardfork in August of last year. Besides achieving predictability in gas fees, EIP-1559 caused a fundamental shift in ETH’s monetary policy. The Ethereum gas fee burning mechanism has a significant effect on reducing the circulating supply of Ether.

In a Monday blog post, the Polygon team said that similar to Ethereum, EIP-1559 may also have a deflationary effect on MATIC due to its fixed token supply of 10 billion tokens. In an analysis, the team found that the EIP-1559 is estimated to burn 0.27% of the total MATIC supply in one year.