Let’s talk about MATIC's transition to POL

What is POL?

Polygon plans to convert all MATIC tokens to POL on the 4th of September this year. So, what exactly is POL? First, we must know that Polygon is a well-known Layer 2 blockchain solution in the cryptocurrency market. POL, known as Proof of Stake Liquidity, is a new consensus mechanism for Polygon. Introducing this consensus mechanism may represent a new way of operating the blockchain network, aiming to handle transactions more effectively, ensure network stability, and support the ecosystem.

Challenges Facing MATIC Now

According to the official announcement from Polygon, the mainnet upgrade is scheduled for September 4, 2024. After the upgrade, $POL will replace $MATIC as the primary token for gas fees and staking functions within the network. $POL is expected to maintain the existing token economics, distribution, and total supply of $MATIC. So, why is the native token $MATIC undergoing this bold transformation?

In reality, the situation for $MATIC is quite concerning based on on-chain data. Since April of this year, the number of daily active addresses has severely declined, and overall network growth and activity have also been on a downward trend.

From the perspective of price and performance metrics, the current price has dropped 86% from its peak of 2.8743 in 2021, now standing at just $0.4123. Considering user activity and price performance, transitioning to $POL may represent a promising turning point.

Comparison of Market Capitalization Among Leading Layer 2 Projects

Layer 2 refers to solutions designed to extend and enhance the underlying blockchain (Layer 1) technology and network protocols. They play a crucial role in the blockchain ecosystem. Here is a comparison of the market capitalization and price of some mainstream Layer 2 projects

• NEAR: Market Cap $4.28 billion, Price $3.86
• OP: Market Cap $1.61 billion, Price $1.35
• ARB: Market Cap $1.74 billion, Price $0.49
• LDO: Market Cap $907 million, Price $1.01
• MATIC: Market Cap $1.80 billion, Price $0.38

What Benefits Will Transitioning to POL Bring to Users?

The most noticeable change is in the price volatility. According to data from Bitrue, after the announcement, the price of MATIC saw a 24-hour cumulative increase of over 10%. Although it later retraced due to fluctuations in the BTC market, MATIC's attention and trading volume have been steadily rising. As of September 3, 2024, the open interest for MATIC futures has reached 2 million, with long positions making up 88% of the total. Most users believe this news is beneficial for the future development of Polygon.

Bitrue now supports the conversion of Polygon (MATIC) tokens to Polygon (POL). You can keep an eye out for more updates and announcements. If you're interested in trading futures and want to earn significant returns on Bitrue, click the "Check the event now" button above to participate in our latest futures activities and claim generous rewards!

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