The long-awaited MATIC token burn is finally here in the form of Polygon EIP-1559.  Covered: Polygon EIP-1559 Is Ethereum’s EIP-1559 Necessary For MATIC? Polygon EIP-1559 Upgrade Finally, the wait is over… The much-awaited EIP-1559 upgrade for Mumbai testnet is here. Read more ?? https://t.co/m1oKQCxdnN https://t.co/wBTO5OSxXp pic.twitter.com/e8sbgPbxvY — Polygon | $MATIC – We're hiring! (@0xPolygon) December […] The post Polygon EIP-1559: Major Upgrade Bringing Token Burning To MATIC appeared first on CryptosRus.

Polygon EIP-1559: Major Upgrade Bringing Token Burning To MATIC

The long-awaited MATIC token burn is finally here in the form of Polygon EIP-1559. 

Covered:

  • Polygon EIP-1559
  • Is Ethereum’s EIP-1559 Necessary For MATIC?

Polygon EIP-1559 Upgrade

 

Yet another major announcement from Polygon this month. Not even a week after announcing their 400 million USD deal with MIR protocol to beef up their ZK Rollup game, Polygon is back and this time, token holders should feel listened to.

Via their official blog, Polygon announced today that the Testnet for Polygon EIP-1559 is ready to go. The Testnet, if successful, will introduce token burning per transaction similarly to Ethereum’s EIP-1559.

“EIP-1559 gets rid of first-price auction as the main mechanism for fee calculation,” Polygon explained via their blog. “Instead, there is a discrete base fee for transactions to be included in the next block and a priority fee to speed up processing. The base fee, which fluctuates depending on network congestion, is then burned.”

Like Ethereum, MATIC will be burned every transaction, meaning the circulating supply will decrease. Currently the circulating supply is almost 7 billion.

“Polygon’s MATIC has a fixed supply of 10 billion, so any reduction in the number of available tokens will have a deflationary effect,” Polygon added, before also nothing that an analysis of the effect the upgrade could see an “annualized burn” 0.27% of total supply.

Recommended: How To Use The Polygon Bridge To Save On Gas Fees

Is Ethereum’s EIP-1559 Necessary For MATIC?

“These changes have far-reaching implications for all of Polygon’s stakeholders,” Polygon said.

Polygon’s gas fees are already not an issue, so it’s an interesting move from the layer-2 network. According to the layer-2 protocol’s blog, the upgrade was requested heavily by the community, after the massive effect the upgrade had for Ethereum’s (ticker symbol ETH) price.

ETH’s price benefited greatly from the token burn. The original smart contract protocol fell as low as 1,800 USD back in July, but since the August 5th upgrade, Ethereum has more than doubled. ETH currently sits in the $3,800 USD range, but reached an all-time high in November of almost $4,900.

Some are dubious of how much of an effect it will have.

It remains to be seen what effect the burn will have over time on MATIC. But, it’s yet another positive news catalyst for MATIC. Couple it with the strong Dapps building on top of Polygon, with the inroads its made with ZK rollups, the future is bright.

“These changes have far-reaching implications for all of Polygon’s stakeholders,” Polygon said.

Polygon’s MATIC is currently trading in the $1.82 range at press time. It reached $2.57 last week in anticipation of the Polygon Summit, which was just shy of its May all-time high of $2.62.

Recommended: Three Top Projects On Polygon You Need To Check Out

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