How much is the POL (ex-MATIC) currency issued?

The issuance of POL (ex-MATIC) is essential for maintaining the security, stability, and governance of the Polygon network, controlling inflation while rewarding validators and empowering the community.

Dec 07, 2024 at 09:23 pm

The Issuance of POL (ex-MATIC) Currency

Introduction

POL (formerly known as MATIC) is the native cryptocurrency of Polygon, a leading layer-2 scaling solution for the Ethereum blockchain. POL facilitates various transactions within the Polygon ecosystem, including gas fees, staking rewards, and governance participation. Its issuance plays a crucial role in maintaining the stability and functionality of the Polygon network.

Issuance Mechanism

POL's issuance follows a predefined schedule, ensuring a controlled and consistent supply over time. The initial supply of POL was 10 billion tokens, and the issuance mechanism is designed to gradually release these tokens into circulation. The issuance process involves the following steps:

1. Staking POL to Participate in Polygon's Proof-of-Stake Consensus

To maintain the network's security and validate transactions, Polygon utilizes a proof-of-stake (PoS) consensus mechanism. Users stake POL tokens to become validators, which involves committing POL tokens to the network for a certain duration. In return for securing the network, validators receive POL rewards proportional to their staked tokens.

2. Issuance of Block Rewards

As validators successfully process and validate new blocks on the Polygon blockchain, they receive a block reward. These rewards consist of newly minted POL tokens, which are added to the circulating supply. The block reward amount is gradually reduced over time to control the rate of issuance.

3. Inflation Rate Control

Polygon's issuance mechanism includes measures to control inflation and maintain the value of POL. The issuance schedule is designed to gradually decrease the block reward amount, thereby reducing the rate at which new POL tokens are introduced into circulation. As the network stabilizes and transaction volume increases, the block reward may be further adjusted to fine-tune the inflation rate.

4. POL Burns

Besides reducing block rewards, Polygon also employs a POL burning mechanism to reduce the circulating supply and control inflation. A portion of the transaction fees collected on the network are periodically burned, permanently removing those POL tokens from circulation. This mechanism helps to maintain the scarcity of POL and potentially increases its long-term value.

5. Governance Voting and Community Involvement

POL token holders have the right to participate in the governance of the Polygon ecosystem through the Polygon DAO (decentralized autonomous organization). POL holders can vote on proposals that shape the direction of Polygon's development, including updates to the issuance schedule and other network parameters. This decentralized governance model ensures that the community has a say in the future of Polygon.