The leading ethereum layer-2 scaling solution Polygon announced that the long-awaited Ethereum improvement proposal EIP-1559 upgrade will go live next week. In the official announcement, the project noted that the upgrade which will initiate the burning of the MATIC tokens will go live on the mainnet on January 18, 2022, at 8 am UTC. The EIP-1559 upgrade knowns as the London Hardfork can revolutionize how the free market works on the Ethereum network. It eliminates the first-price auction as the main mechanism for the fee calculations and it also introduces a discrete base fee that is burned rather than paid to the miners.
While the change doesn’t low transaction fees that are governed by the demand and supply, it allows users to estimate costs better and to reduce the number of users overpaying. These changes will have far-reaching effects for all of the Polygon stakeholders including its native token MATIC holders, delegators, dapp developers, validators, and users. Polygon scheduled the upgrade for next week and since MATIC has a fixed supply of 10 billion tokens, any reduction of the coins will have a deflationary effect on the asset.
The project’s core team noted that the analysis concluded with an annual burn of MATIC will represent 0.27% of the token’s supply or about 27 million MATIC. For the dapp users on the network, the EIP-1559 upgrade will increase the benefits of enjoying lower fees. However, there will be fewer MATIC tokens available and the developers on the other hand will receive a boost of the ETH toolings and will work seamlessly with minimal negative effects. The deflationary pressure will benefit both the delegates and validators since their rewards for processing transactions are denominated in MATIC. The changes will result in a few spam transactions and less network congestion since the base fee increases automatically when filled up. In the meantime, Polygon also detected and fixed a bug that would have jeopardized over $24 billion worth of tokens.
As recently reported, The number of NFT sales on the Polygon network reached an all-time high last month just shy of 2 million. According to Dune Analytics, this marks a 60% rise in comparison to November and the third consecutive monthly increase for the network. An Ethereum-based scaling solution that is seeking to construct and manage securities on the blockchain technology, Polygon’s ecosystem grew exponentially over the past 12 months and registered more than 3000 decentralized applications on the network with a total value locked of $3.86 billion.