Layer 2 blockchain Polygon is set to migrate its MATIC token to POL as a part of its upgrade to Polygon 2.0

According to a July 18 X post from the Polygon Foundation, the upgrade will commence on September 4. Initially, POL will replace MATIC

Layer 2 blockchain Polygon (MATIC) will soon be migrating its MATIC token to POL as part of its upgrade to Polygon 2.0. According to a July 18 X post from the Polygon Foundation, the upgrade will commence on September 4. Initially, POL will replace MATIC as the primary token for gas payments and the staking token for its proof-of-stake (PoS) consensus. Over the long haul, the token would “serve a crucial role in the AggLayer,” Polygon’s growing network of aggregated blockchains.

“The current community consensus proposes that POL will support broader roles in the Polygon staking hub (to be released in 2025), including block generation, zero-knowledge proof generation, and participation in Data Availability Committees (DACs).”

The POL upgrade went live on the Polygon testnet on July 17, giving network developers and infrastructure providers time to prepare for the mainnet upgrade.

Users holding MATIC on the Polygon network are not required to do anything, and their tokens will be automatically upgraded. However, those holding on Ethereum, Polygon zkEVM, or centralized exchanges will be required to bridge, update smart contracts, or use a migration contract.

For users on most major centralized exchanges, Polygon expects the upgrade to be done automatically.

“Centralized exchanges will be handling the token migration for their users. Most users will not have to take any action for the token migration on centralized exchanges. However, if a centralized exchange is not able to integrate the token migration, users will have to withdraw their MATIC to a self-custodial wallet and follow the instructions above.”

Those holding MATIC on Ethereum or zkEVM will be given ample time to upgrade to POL without any deadline, the announcement noted. However, if a non-custodial user fails to update the Remote Procedure Call (RPC) settings in their crypto wallets, it may incorrectly display “MATIC” instead of “POL” as the token symbol.

RPC settings are configuration details that allow wallets like MetaMask to communicate with a specific blockchain network. At the time of publication, there’s no deadline set for MATIC holders on Ethereum and Polygon zkEVM to upgrade to POL.

“The community will have the power to establish a deadline in the future,” the announcement noted.

Plans to replace MATIC with POL were initially announced in July 2023, with the Ethereum contract for the POL token launched a few months later, on Oct. 25.

The POL migration is the first step in laying the foundation for Polygon 2.0, which is touted as the “Value Layer of the Internet.” The upgrade is expected to offer significant scalability and liquidity improvements.

POL will have an initial supply of 10 billion and offer holders governance rights in the Polygon 2.0 ecosystem. Two percent of the entire POL supply will be set aside annually for validator rewards and the community treasury.

The announcement comes as Polygon’s NFT sale volume eclipsed that of Solana (SOL) and Bitcoin (BTC) earlier this month. The surge was witnessed despite the overall NFT sector witnessing a more than 70% drop in the total number of NFT buyers.