Polygon’s EIP-1559 Upgrade Will Happen Next Week – Initiates MATIC Burning
Polygon’s London hardfork, which will introduce the burning of MATIC tokens, will take place on January 18, 2022.
Leading Ethereum layer-2 scaling solution, Polygon, announced that Ethereum Improvement Proposal (EIP) 1559 upgrade will go live on the mainnet next week.
According to the official announcement, the India-based project noted that the upgrade, which will also introduce the burning of MATIC, is planned to go live on the mainnet on January 18, 2022 at about 8 a.m. UTC.
The EIP-1559 upgrade, AKA London hardfork, revolutionizes how the fee market works on the Ethereum network. It eliminates first-price auction as the main mechanism for fee calculation and introduces a discrete base fee that is burned instead of paid to miners.
However, the change does not lower the transaction fees – which are governed by the forces of demand and supply – but it does allow users to estimate costs better and reduce the number of overpaying users.
EIP-1559 will have far-reaching effects for all of Polygon’s stakeholders, including its native token (MATIC) holders, validators and delegators, decentralized app (dApp) developers, and users.
MATIC to Deflate
MATIC has a fixed supply of 10 billion tokens, and any reduction in the number of available coins will have a deflationary effect on the asset.
According to Polygon’s core team, its analysis concluded that an annual burn of MATIC would represent 0.27% of the token’s total supply, about 27 million MATIC.
dApp users on the network will get further benefits from even lower fees, although, there will be fewer MATIC tokens available.
Developers will receive a boost as all of their Ethereum toolings will work seamlessly and face minimal adverse effects.
The deflationary pressure will mutually benefit both validators and delegates since their rewards for processing transactions on the Polygon network are denominated in MATIC.
The changes will result in fewer spam transactions and less network congestion since the base fee increases automatically once the block is filled up.
