what does this crypto migration mean for you? Experts weigh in

What are the potential dangers and advantages of holding POL as a substitute of MATIC, and the way do consultants predict the token’s future position in Polygon’s 2.0 roadmap?

MATIC turns into POL

On September 4, Polygon (POL), the Ethereum (ETH) scaling community, formally made a notable shift in its ecosystem by migrating from the well-known MATIC token to a brand new native token known as POL.

In keeping with the announcementwill exchange the POL token MATIC because the native fuel and staking token on Polygon’s fundamental proof-of-stake chain. It’s going to additionally play an important position in Polygon’s bigger 2.0 roadmap, which goals to construct a extra environment friendly and scalable blockchain community.

For MATIC holders, this migration raises a number of questions: what does this imply for the way forward for their property? How will this impression Polygon’s total efficiency? And what can we count on because the community continues to evolve?

Let’s dive deeper to know what POL is, why the improve occurred, and what it means for the way forward for Polygon and its customers.

Understanding the migration

The migration from MATIC to POL is a community-driven improve that goals to reshape the way forward for Polygon. POL is being launched because the Polygon ecosystem evolves right into a so-called “aggregated community” by means of a brand new know-how layer generally known as the AggLayer.

This improve is a part of Polygon’s imaginative and prescient to unify liquidity and data throughout chains inside its ecosystem, permitting it to develop right into a extra highly effective and interconnected blockchain community.

What precisely is POL? In easy phrases, it’s a new utility token designed to do extra than simply exchange MATIC. Whereas it is going to nonetheless be used for primary capabilities like fuel reimbursements and betting on the Polygon community, its future potential is way broader.

POL is what Polygon calls a “hyperproductive” token, which means it’s set as much as tackle a number of roles throughout the Polygon ecosystem. For instance, it may assist safe not only one chain, however a whole community of blockchains, as Polygon shifts to superior applied sciences comparable to zero-knowledge rollups.

Initially, POL will perform in the identical manner as MATIC: enabling transactions on Polygon’s PoS community. Validators securing the community and customers performing transactions will begin utilizing POL as a substitute of MATIC. This transition can be easy due to backward compatibility.

Because of this apps, validators and customers is not going to be affected through the improve. All the pieces will work because it at all times has, however with the added advantages that POL brings.

What is particularly attention-grabbing about POL is its future usefulness, which can be formed by the neighborhood. Polygon’s roadmap envisions POL taking part in a central position within the community’s staking hub, which is anticipated to launch in 2025.

This might broaden using POL nicely past simply staking and fuel charges, doubtlessly giving it better affect over the governance and safety of the broader aggregated community.

One of the vital important adjustments at POL lies in tokenomics, or the way in which the token provide is managed.

Over the subsequent ten years, POL could have an annual issuance charge of two%, which means new POL tokens can be created to help the community. Half of those tokens go to validators as a reward for securing the community, whereas the opposite half goes to a neighborhood fund. This treasury will fund improvement initiatives inside the Polygon ecosystem and help builders and innovators.

Clean transition or challenges forward?

For many MATIC holders, the transition to POL is designed to be a easy and computerized course of. In case your MATIC is saved on the Polygon PoS chain, you do not have to fret about taking any motion: your tokens can be routinely transformed to POL at a 1:1 ratio.

Nonetheless, issues are somewhat totally different for individuals who have MATIC on the Ethereum community. On this case, customers will need to manually migrate their tokens to POL through the Polygon Portal Interface, which Polygon has offered particularly for this objective.

For customers with MATIC on the Polygon zkEVM community (layer 2) or on centralized exchanges, further steps could also be required to finish the migration.

In these circumstances, it’s possible you’ll must hyperlink your MATIC tokens again to the Ethereum community earlier than you’ll be able to convert them to POL. Polygon has created a migration contract to assist customers with this course of, however this technique is geared toward extra superior customers who’re snug with technical operations.

For the reason that course of is permissionless, no approvals are required, however it is strongly recommended that solely these with the suitable technical data try this feature.

It is usually potential to your trade to routinely full the migration in your behalf with out you having to take any motion, however this varies from trade to trade so be sure you test for the newest updates.

In case you retailer your MATIC in {hardware} wallets, the method might require guide intervention. Whereas Polygon has not but launched particular directions for this, customers with chilly storage wallets ought to keep tuned for additional steering on easy methods to proceed.

As for the timeline, there’s presently no set deadline for MATIC holders on Ethereum or zkEVM to transform their tokens to POL. Nonetheless, Polygon has indicated that the neighborhood might vote on setting a deadline sooner or later, so it is necessary to control any upcoming bulletins or adjustments.

Group response and value motion

For the reason that announcement of the migration from MATIC to POL, the value of POL has been on a downward pattern.

As of September 12, POL is buying and selling round $0.38, reflecting a decline of 10.7% prior to now month. The market capitalization presently stands at $1.25 billion.

Nonetheless, there’s one element value mentioning: POL’s circulating provide is roughly 6.7 billion tokens, whereas the overall provide is roughly 10.25 billion tokens. This discrepancy is as a result of ongoing migration from MATIC to POL, which isn’t totally mirrored in CoinMarketCap’s knowledge.

A person on This incomplete migration is without doubt one of the the explanation why POL has fallen available in the market capitalization rankings, rating thirtieth as of September 10.

In the meantime, Ali Martinez, a revered crypto analyst, shared insights on POL’s potential future value actions. He famous that POL seems to be forming a descending triangle sample, a standard technical indicator of a bearish pattern.

Martinez talked about the significance of the $0.34 help degree and prompt that if POL holds this line, it may get better to $0.94. Alternatively, if help breaks, a correction to $0.19 may very well be in play.

What do consultants suppose?

To raised perceive the implications of Polygon’s transition from MATIC to POL, crypto.new reached out to a few trade consultants: Daria Morgen, Head of Analysis at Changelly, Tim Zinin, Founding father of Botanica College, and Vadym Grusha, CEO of Trustee Plus.

In keeping with Morgen, the fast impression will possible be minimal, with extra significant adjustments occurring over time. She mentioned:

Within the quick time period, issues will stay steady. The migration is designed to be backwards suitable so that each one current functions proceed to perform with out interruption. Because the community develops, POL will play a key position in rising each transaction pace and safety.

Zinin shared comparable views however emphasised POL’s long-term potential, which may rework Polygon’s safety mannequin.

We might expertise a couple of bumps within the quick time period, however as soon as POL is totally built-in, transactions can be streamlined and the community will change into extra environment friendly. POL not solely secures one blockchain, however locks a number of chains inside Polygon’s interconnected community. Plus, with ZK know-how within the combine, you are including an additional degree of safety that makes the system even more durable to compromise.

Nonetheless, the migration to POL is not only about higher safety and pace; it’s also a giant step in the direction of decentralized governance. POL introduces a community-controlled treasury, the place customers get a say in how cash is allotted. Morgen sees this as a strong instrument:

The introduction of a neighborhood treasury means Polygon customers now have extra management. They are going to be capable to resolve how the funds are used, which can possible encourage extra builders and validators to hitch the ecosystem, making a extra engaged and lively neighborhood over time.

Grusha was equally excited concerning the potential for community-driven governance.

What we see here’s a self-sustaining mannequin. With this new treasury, the neighborhood could have an actual voice in deciding the way forward for Polygon. Decentralized governance is not going to solely convey extra individuals into the group, however it is going to additionally enable them to make significant contributions to the expansion of the undertaking.

Grusha believes this construction, mixed with Polygon’s imaginative and prescient for Polygon 2.0, may result in one of the crucial progressive and user-driven ecosystems within the crypto area. Nonetheless, Zinin expressed warning about one side of POL’s tokenomics: the brand new emissions mannequin.

With MATIC we had a restricted provide, making it a stable long-term funding. However POL introduces persistent issuance, which may create inflationary pressures. Whereas that is essential to reward validators and safe the community, it additionally opens the door to potential manipulation. That is one thing buyers ought to pay shut consideration to.

In the meantime, consultants agree that POL has nice potential to draw each non-public and institutional gamers.

The best way ahead

The migration from MATIC to POL marks an thrilling part for Polygon, particularly as competitors within the Layer 2 area will increase.

Nonetheless, the POL token’s value motion has been risky because the announcement, and as with every evolving market, it’s important to commerce cautiously. At all times keep in mind the golden rule: by no means make investments greater than you’ll be able to afford to lose.