MATIC 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.
MATIC 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.
To take part in the consensus on the network, users must stake MATIC. The staked MATIC 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 MATIC will be forfeited.
There is 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).
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.
The total breakdown of the MATIC token supply is 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%
The remaining 2.5 billion MATIC tokens that are not in circulation yet, will be distributed over the next 4 years through staking rewards.
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