- Polygon is transitioning from the MATIC token to the POL token to enhance network security and validator rewards.
- Validators and delegators earn rewards from staking POL, which includes a share of annual inflation and transaction fees.
Polygon has recently changed its MATIC token to the POL token as part of the Polygon PoS staking process to enhance network security and validators’ rewards. The inclusion of POL as the staking token aims to improve the Polygon Proof of Stake (PoS) consensus mechanism. In the POL, validators have to lock tokens to participate in the validation and governance of the network.
This mechanism is crucial in ensuring network security, network size, and general health. Validators are subjects that are most important for the network, as they perform transaction validation and block creation, which is crucial for the blockchain.
Validators Perform Crucial Network Functions
The POL staking system is useful for validators and delegators on the Polygon network. Staking incentives are used to reward them, and these are a split of the annual inflation rate (1% ) and transaction fees. This reward structure guarantees a steady stream of motivation for the parties responsible for protecting the network and ensuring its optimal functionality.
Validators are supposed to perform important functions, including block creation, checkpoint signing, and block proposal. The reward system is carefully crafted in a way that these validators will be encouraged to maintain the security and reliability of the network efficiently.
Delegators, who are parties that do not directly engage in the network operations, can still help maintain the security of the network. As a result, they earn rewards that depend on the amount of staked POL that is proportional to the stake they have made. This system not only increases the number of stakers but also increases the security of the network by involving more people in the staking process.
The management of the staking mechanism is done through the Polygon Improvement Proposal (PIP) system to ensure that the staking process is scalable and suitable for the network. With this model, it is possible for the community members to make decisions on emission rate, security features and other important features of the staking process. The PIP process offers a clear means through which the network and its participants are able to evolve, and the process is underpinned by the views of the stakeholders.
From September 4, 2024, POL will be used as a gas fee payment and staking token for Polygon’s PoS chain. Polygon sees POL as a “third-generation” cryptocurrency, improving on the initial models of Bitcoin (BTC) and Ethereum (ETH) through increased token functionality and validator rewards.
Analyst Predicts Significant Price Increase for MATIC
Currently, Polygon’s native token named MATIC has seen a massive drop in its value, dropping to about 15% over the past month owing to the general bearish run in the market. On Monday, crypto analyst Cryptorphic posted a very optimistic prediction on X, stating that MATIC might rise by more than 600%. This prediction follows MATIC’s rebound from a significant support level, which Cryptorphic interprets as part of a bullish triangle pattern.
MATIC hit the lower support level as expected. Since our previous update, MATIC has dropped 30% and is currently within the support range of $0.316 to $0.387.
MATIC must hold this support because if it fails and breaks down, things could turn out poorly.
Key Observations… pic.twitter.com/oxNa3kZlAk
— Cryptorphic (@Cryptorphic1) August 12, 2024
Cryptorphic pointed out that MATIC has pulled back to its lower support area of $0. 316 to $0. 387 after a big 30% retracement. The analyst noted that the support of this level may bring some opportunities, with the price targets of $2. 923. However, Cryptorphic noted that if MATIC cannot hold this support level, the reverse may occur.