- MATIC has seen repressed price action in the current cycle and is ranging around June 2022 lows.
MATIC holders will be able to convert their balances to the multipurpose POL token in September.
As a seasoned researcher with years of experience in the dynamic world of cryptocurrencies, I’ve witnessed firsthand the rollercoaster ride that is Polygon [MATIC]. The current market cycle has seen MATIC repressed in its price action, ranging around the June 2022 lows. However, the upcoming transition to Polygon 2.0 and the introduction of the multipurpose POL token have me excited about the future of this promising project.
Polygon [MATIC] is moving towards a more sophisticated, fully-decentralized structure from its existing setup.
In June 2023, the announcement of Polygon 2.0 presented a collection of suggested improvements that aim to restructure Polygon’s token system, network architecture, and decision-making processes.
The upgrades also involve enhancements to the network’s consensus mechanism, ensuring it can support the anticipated growth and scaling demands.
Polygon’s ambitions to become a multi-chain solution
In simpler terms, Polygon 2.0 presents a fresh structure emphasizing limitless scalability and uniting liquidity across various chains within the Polygon network. The groundwork for these advancements was laid last year by setting up the infrastructure to support the concept of a comprehensive ecosystem.
In September 2023, Polygon Labs initiated the rollout of their initial Polygon Improvement Proposals (PIPs), signifying the commencement of the Polygon 2.0 development phase.
One month down the line, during October, the Polygon development squad rolled out the smart contracts for the Polygon ecosystem token (POL) on the primary Ethereum network.
Hyperproductive POL token
In simpler terms, the upcoming version of the POL token is designed using a modern contract template, allowing for smooth and adaptable functions within the Polygon network.
The total number of POL tokens that can be issued initially is set at 10 billion, after which a yearly inflation rate of 1% will be applied for the subsequent ten years.
The POL token will serve as a flexible tool, enhancing scalability and administration efficiency across various blockchain networks.
Holders of POL tokens can also engage in enhancing the security of Polygon networks using an upgraded, decentralized staking system that provides increased incentives for those who stake their tokens.
MATIC to POL migration
On September 4th, as originally projected, the MATIC-to-POL upgrade is set to take place, marking a shift where POL will assume the role of the native gas and staking token within the Polygon Proof-of-Stake (PoS) network, replacing MATIC.
MATIC token, itself rebranded before, has been the backbone of the Polygon ecosystem.
The upgrade will allow users to swap their tokens and is a significant milestone in the Polygon 2.0 roadmap because it represents the actual shift in the network’s tokenomics and governance.
In the course of a four-year transition period, it’s necessary for MATIC token holders to execute a swap operation (at a 1:1 exchange rate) to move their balances into the updated contract. Once this is done, the original MATIC will no longer be available.
MATIC price action
In recent market conditions, Polygon’s MATIC has experienced significant losses among altcoins. From April to June, MATIC managed to hold above the $0.61 support level, but eventually broke free from its prolonged period of sideways movement.
So far this month, the value of the token has decreased by 10%, potentially facing further drops due to ongoing market instability. According to IntoTheBlock’s data, a mere 2% of MATIC holders are currently making a profit, while an additional 1% is just breaking even at its current price level.
Despite MATIC/USDT recovering from the $0.334 support set on 5th August, its recent price movements are still cause for worry. For the past three weeks, the pair has been oscillating within a range of $0.38 to $0.42 on the 4-hour chart.
Still, the near-term outlook is not all bleak. Bullish speculators target the $0.50 psychological level for more upside as it previously provided support between July 2023 and August 2024.
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2024-08-19 19:04