POL is an ERC-20 token that powers Polygon, a Layer-2 solution, designed to help scale the Ethereum network and improve its functionality.^[1]

Overview

POL is the native token of Polygon. It is used to govern and secure the network by staking. It's the currency of Polygon apps that enables users to interact with hundreds of decentralized applications involved in the Polygon ecosystem.^[1]
As POL is an ERC-20 token issued on Ethereum, it can also be purchased using a variety of decentralized exchanges such as Uniswap and Sushiswap. In addition, a user can use the official Polygon Bridge in order to exchange assets between Ethereum and Polygon.^[2]

POL acts as an economic investment to encourage users to contribute and participate in the Polygon ecosystem. It is used to pay validators as a unit of exchange, and active users who have contributed to the network will receive incentives in the form of this token.^[6]

Consensus

To take part in the consensus on the network, users must stake POL. The staked POL also serves as a form of punishment for malicious behavior, such as proposing invalid blocks, verifying blocks illegally, or executing invalid transactions, by requiring stakers to put up their stake as collateral. If a staker violates the network rules, their staked POL will be forfeited.^[6]

Tokenomics

There was a total supply of 10 billion MATIC tokens and, as of August 2022, over 7.4 billion have already been minted and released into the system. On January 18, 2022, Polygon went through the EIP-1559 upgrade, which introduced a deflationary effect on the token. As per the team, the MATIC tokens would go through annual burns that would remove 0.27% of the token’s total supply (about 27 million MATIC).^[3]

Polygon held its initial exchange offering (IEO) on Binance using the Binance launchpad in April 2019. They were able to sell 19% of their tokens at a rate of $.00263/MATIC through this launchpad. Shortly after this IEO, Polygon held 2 additional funding rounds. The first was a seed round where they sold 2.09% of the total MATIC tokens at a rate of .00079/MATIC. The second was a token sale dedicated to early supporters, where 1.71% of MATIC tokens were sold at a rate of $.00233/MATIC.^[4]

The total breakdown of the MATIC token supply was as follows:

• private sale (seed round + early supporters): 3.8%
• Binance Launchpad: 19%
• Team: 16%
• Advisors: 4%
• Staking Rewards: 12%
• Foundation: 21.86%
• Ecosystem: 23.33%

Token Distribution

The remaining 2.5 billion MATIC tokens that are not in circulation yet, were planned to be distributed over the spin of 4 years through staking rewards.^[5]

Release schedule of MATIC

MATIC - POL Migration

In July 2023, Polygon Labs announced a proposal to upgrade the MATIC token to POL. POL is intended to be the native token of Polygon. ^[7]

The POL token would have an initial supply of 10 billion tokens that is entirely dedicated to the migration of MATIC for POL. The digital asset has a yearly emission rate of 2% which would be used for validator incentives and community treasury. ^[7]

The layer2 network projected POL’s price during a 10-year growth scenario to an average of $5, adding that the ecosystem could see up to 25 public chains and more than 3000 supernets if it is heavily adopted during this period. Additionally, Polygon stated that POL holders would act as validators for multiple chains, and each chain can offer validators various roles and corresponding rewards. MATIC holders would be allowed to upgrade their holdings to POL at a 1:1 ratio for a prolonged period. The protocol stated that MATIC and POL would not and can not coexist, adding that “POL can only replace MATIC.”^[7]

POL Token Contract Launch

On October 25, 2023, Polygon Labs launched the Ethereum contract for the new Polygon token, POL. ^[9]

"POL, a next-generation hyperproductive token, will power a vast ecosystem of zero knowledge-based Layer 2 chains via a native re-staking protocol that allows POL holders to validate multiple chains and perform multiple roles on each of those chains (sequencing, ZK proof generation, participation in data availability committees, etc.)" - the blog post mentioned.

The contract address for the POL token on Ethereum is 0x455e53CBB86018Ac2B8092FdCd39d8444aFFC3F6. ^[8]

Following the POL contract launch, Polygon Labs confirmed the MATIC - POL migration for September 4, 2024. ^[10]

According to the announcement shared with Cointelegraph, MATIC holders on Polygon PoS would be automatically upgraded to POL without intervention. However, MATIC holders on Ethereum, Polygon zkEVM, or centralized exchanges will need to either bridge, update smart contracts, or use a migration contract for a manual upgrade. The announcement added:

“If users don’t update RPC settings in a wallet (MetaMask, Rabby, Zerion, etc.), the wallet may still display “MATIC” instead of “POL” as the token symbol for the native gas token for the Polygon PoS chain.”^[10]

MATIC-POL Migration Complete

On September 4, 2024, MATIC was upgraded to POL across the Polygon network meaning every transaction that takes place on Polygon PoS would use POL as the native gas token. MATIC token holders on Polygon PoS were automatically upgraded by September 4 alongside all staked MATIC. ^[11]