Original Author: @eth_xinyi
Original Source: Twitter
Could this be the next opportunity for a fortune on the public chain: Polygon is about to usher in the token upgrade MATIC2.0 — $POL.
Can this “peak at the debut” #Layer2 project that led some people to get rich with ETH expansion layer bring surprises to everyone again?
Pay attention to several key points of Polygon2.0 and keep them in mind! Find the opportunity to get on board!
1/ Key points of the official article:
1. Polygon Labs is planning a major update called Polygon2.0
2. As part of this update, Polygon Labs will introduce a new token “POL,” which will replace the current MATIC token at a 1:1 ratio
3. This change may greatly alter the economic purpose of Polygon’s native token and may impact its utility
2/ Since the establishment of the #Polygon network in 2020, MATIC has always been the native token of the protocol. Recently, Polygon researchers published a white paper proposing POL, which is a technical upgrade to the native assets of the Polygon network. POL is the next-generation protocol token that aims to be the primary tool for coordinating and developing the Polygon ecosystem, as well as the main driving force behind the vision of the Internet of Value. So, what are the benefits of the token upgrade?
3/ Hyperproductive Tokens
It is well known that BTC was the first very successful native token, but it is a non-productive asset; theoretically, it has no function. ETH improved upon this and established second-generation native protocol assets – productive tokens. Productive tokens allow their holders to become validators in their respective protocols, perform useful work, and be rewarded accordingly.
4/ Returning to Polygon, after this upgrade, POL has also taken a step in this direction, introducing third-generation native assets – hyperproductive tokens. Similar to productive tokens, it allows holders to become validators and be rewarded, but with two game-changing improvements:
1. Validators can validate multiple chains, i.e., any number of chains;
2. Each chain can provide multiple roles (and corresponding rewards) for validators. This novel design protects, coordinates, and adjusts the Polygon ecosystem, accelerates its further development, and provides POL holders with almost infinite opportunities. So, what unique advantages does this redesigned protocol architecture POL have?
5/ Summary of advantages:
1. Ecosystem security. The highly decentralized PoS validator pool can provide security, elasticity, and trusted neutrality for each Polygon chain. Validators are incentivized to join the pool and protect as many chains as possible.
2. Infinite scalability. POL can support exponential growth and eventual mainstream adoption of the Polygon ecosystem. It enables the validator pool to scale to support thousands of Polygon chains, securely.
3. Ecosystem support. The Polygon ecosystem and the entire industry are still in the early stages and will require continuous support in the coming years. POL can provide a sustainable mechanism within the protocol for these activities.
4. No friction. Blockchain protocols often require users and developers to hold, stake, or use their native tokens in order to access the platform, which can create friction and reduce user experience. POL is designed in a way that does not introduce any such friction.
5. Community ownership. With decentralization as a core value, Polygon aims to be governed by its community. POL should have governance rights and be used within the governance framework. Additionally, there are multiple aspects of utility and incentives: POL’s utility revolves around validators, with the goal of incentivizing them to perform useful work. Validators need to stake POL in order to join the validator set.
Staking provides several benefits to the protocol: (i) prevents Sybil attacks, (ii) aligns validators with the success of the ecosystem, and (iii) enables slashing, i.e., punishing malicious validators. Once they stake POL, validators enter the validator pool and qualify to subscribe to validate any Polygon chain. As a reward for performing this useful work, validators can establish at least three incentive streams:
1. Protocol rewards: Staking the protocol continuously emits a predefined amount of POL and distributes it to all active validators as a base protocol reward. These rewards will replace the current MATIC protocol rewards that Polygon validators receive.
2. Transaction fees: As mentioned above, validators can validate any number of chains and typically collect transaction fees from all of these chains.
3. Additional rewards: To attract more validators, some Polygon chains may choose to introduce additional rewards. These rewards can be any token, including but not limited to POL, stablecoins, or native tokens of these Polygon chains.
4. In addition to validating multiple chains, validators can also perform multiple roles on a single chain. These roles include: (1) narrow validation, i.e., accepting transactions and generating blocks, (2) generating zero-knowledge proofs, (3) participating in the Data Availability Committee (DAC), and any other useful work on any Polygon chain.
7/ POL Ecosystem The Polygon ecosystem and Web3 in general take time to mature and achieve mass adoption. Before that happens, ideally, the Polygon ecosystem should have sufficient resources for various important activities: protocol development, protocol research, ecosystem grants, and other incentives.
8/ Seamless upgrade
Upgrading from MATIC to POL requires a simple technical operation – sending MATIC to an upgrade smart contract that will automatically return an equivalent amount of POL.
Token holders will have sufficient time to upgrade, for example, 4 years or longer. If the community reaches a consensus to support this proposal, the migration could start in the next few months.