Polygon Welcomes London Hardfork Upgrade

The Polygon blockchain is finally launching the latest EIP 1559 upgrade, which will enable the burning of the native MATIC token and improve fee visibility. 

MATIC Token Now Deflationary

News of the implementation, which has been in the works long enough, was announced yesterday by the Polygon team via a blog post. It was first successfully implemented on the Mumbai testnet. Boosted by the success, Polygon’s core development team is finally launching in on the mainnet on January 18, 3 AM UTC. The team has also estimated that the annual burn rate will be around 0.27%, reducing the fixed MATIC supply of 10 billion tokens by 27 million tokens per year.

The report stated, 

“The burning is a two-step affair that starts on the Polygon network and completes on the Ethereum network.”

Standardization Of Gas Fees

Also known as the London hardfork, the EIP-1559 upgrade was launched on the Ethereum mainnet in August 2021. The upgrade introduces a discrete base fee for transactions to be included in the next block and a priority fee to speed up processing. The base fee depends on the congestion in the network and is eventually burned. In this way, the first-price auction mechanism of fee calculation is eliminated.

In fact, with EIP 1559 now coming to the Polygon network, users can now participate in the burning process through a public interface. Since gas prices are based on supply and demand, the upgrade is not going to lower transaction fees. However, users will be able to predict costs better and avoid overpaying because of the standardized minimum amount of the base fee for inclusion in the next block. However, while EIP-1559 would benefit all of Polygon’s stakeholders, it would reduce the amount of MATIC available to existing and new investors.

Benefits For All Stakeholders

In the announcement, the team also highlighted the implications of the upgrade for all of Polygon’s stakeholders. Token holders will benefit from the annual 0.27% burn of the total MATIC supply and the subsequent deflationary effect. DApp users on Polygon will benefit from some of the lowest fees in the industry and more predictable gas prices. At the same time, the developers will experience seamless Ethereum tooling with minimum challenges. Finally, even validators and delegators will benefit from deflationary pressure as these changes will lead to fewer spam transactions and less network congestion.

Polygon community members are hopeful that the upgrade will ensure zero repetition of the incident that occurred on the network earlier this month when its gas fees skyrocketed and led to some validators failing to submit blocks. Furthermore, hopefully, the upgrade will give the blockchain some bonus points in the Polygon vs Solana race.  

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.