TL;DR
In July 2023, Polygon founders and researchers published a white paper proposing POL, a big upgrade of the asset currently known as MATIC. POL, which can be collected 1:1 for existing MATIC, is supposed to become ‘one token to power all Polygon chains’. It has much more utility than MATIC.
Let’s first take a step back and ask ourselves: why do blockchains have a coin, or to be more precise, a native token? Well, remember that they are open-source projects, where people mostly contribute for free. Compare open-source projects to a communal garden, where everyone can benefit from the fruits, but only a few people tend to it. Over time, those few hard workers might get tired and feel unrewarded, leading to a less flourishing garden.
While these traditional types of communal gardens/open-source projects can work without a coin (Wikipedia never had a coin, to give just one example), the free rider problem can hurt them. How to protect a blockchain, how to keep it in a healthy condition and make it flourish? Launching a coin – when done right – can introduce just the right financial incentives: a way to keep everyone who participates in this open-source software project in line. If everyone will financially gain or lose by providing value versus hurting the project, it has a better chance of surviving.
The main way this works in proof-of-stake networks like Ethereum, is that validators lock up capital and get rewarded for this. They put something at stake and some even put in the work of running a validator node. Their service secures the network – and that’s why they get coins in return.
Introducing the POL Token
Polygon has a token called MATIC. Think of MATIC as the original tool for the garden – useful, but limited. Soon, there will be a new and improved tool introduced, called POL, aimed at making the Polygon garden even more robust, efficient, and expansive. The team calls it a third-generation token.
If MATIC was a simple gardening tool, then POL would be a multi-tool. The Polygon team has come up with a name for this: a hyperproductive token. What do they mean by this?
They call the traditional proof-of-stake tokens ‘productive tokens’. Just like productive tokens, the new ‘hyper-productive’ token POL will enable its holders to become validators and receive rewards. But there are two improvements. First of all:
- Validators will be able to validate multiple chains. This ‘hyperproductive’ POL allows its holders to work on (validate) multiple areas (chains) of the garden.
Wait, what? Multiple chains? Yes. Remember Polygon was created as a framework for building and connecting Ethereum-compatible blockchain networks. It’s a network of networks and as such provides a scalable environment for building and deploying decentralized applications. It uses various types of chains (sidechains, plasma chains, and standalone chains) depending on the type of scaling solution that an app needs. These chains operate alongside the Ethereum main net, offloading transactions, and computations to enhance throughput.
So, future validators can be validators for all these chains. But there’s more:
- Every chain can offer multiple roles to users who tend to the ‘garden’. Not just watering the plants but also taking care of other ‘garden areas’. These roles include zero-knowledge proof generation,…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
