Polygon, an India-based scaling solution for Ethereum, powered by MATIC, is releasing an update to deploy a fee-burning mechanism line like Ether (ETH) and Binance Coin (BNB). Polygon will implement Ethereum's EIP-1599 update and introduce the burning of native token MATIC to provide better transaction fee visibility and other smaller features.The upgrade is being released in the network as a testnet and will be called the Mumbai Testnet. A testnet is an alternative blockchain used for testing and experimentation.
The EIP-1599 update on Ethereum's blockchain addressed two vital aspects in transaction fees: the burning of transaction fees depending on the network load and reduced gas price volatility.
Coin burning is a process in which miners remove a specific portion of coins from circulation. It means the miners send those tokens to an address with no private key. Without any private key, access to the coins is restricted and results in effective removal or burning.
Also Read |Explained: What is crypto coin burning and how it impacts investors
Before its update, Ethereum priced transaction fees using an auction mechanism. It involved users sending a transaction with bids, also known as gas prices, and then miners choosing the transactions that had the highest bid. The transactions the miners select pay the bid they had specified.
However, experts suggested there were many inefficiencies with the auction mechanism for fee calculation. Some of the issues were:
- A mismatch between the volatility of transaction fee levels and the social cost of transactions.
- Needless delay for users due to the natural volatility in transaction volume.
- Complex fee estimation algorithms, that were necessary due to the auction mechanism, would often end up not working, leading to frequent fee overpayment.
Also Read | Should you invest in Polygon (MATIC) Indian cryptocurrency? Here's what experts suggest
EIP-1599 completely eliminates the first-price auction mechanism to calculate the fee for a transaction. In the EIP-1599 update, there is a base fee for transactions to be included in the next block and a priority fee that speeds up the processing of transactions. The base fee fluctuates according to the network congestion and is then burned.
These changes in the transaction fee system allow users to estimate cost better since the base fee is the minimum price for being included in the next block. Overall, this will result in fewer users overpaying for transactions.
What does this mean for MATIC?
MATIC has a fixed supply of 10 billion coins in network. Burning the coin would have a deflationary effect. But experts believe the deflationary pressure will benefit both validators and delegators, as rewards for processing transactions would be denominated in MATIC.
Polygon's core development team used Ethereum's experience with the upgrade as a baseline to simulate the impact on MATIC's total supply. The team's analysis shows the annualised burn would only represent 0.27 percent of the total MATIC supply in the network.
Also Read |Explained: Proof-of-work vs Proof-of-stake mining and why Ethereum is transitioning to latter
FAQs
Polygon will burn Matic tokens with every transaction to provide better transaction fee visibility and other smaller features. It will be carried out after an upgrade that is being released in the network as a testnet and will be called the Mumbai Testnet. Burning the Matic coin would have a deflationary effect.
What is the burn rate of polygon Matic? ›
Polygon's core team projected an annual burn of MATIC amounting to 0.27% of the token's total supply — around 27 million tokens.
How many transactions can Polygon handle? ›
Unlike Ethereum, which can only process around 17 transactions per second, Polygon can handle 65,000 transactions per second, a remarkable improvement.
Why is my Polygon transaction taking so long? ›
If your transaction has been pending for a few minutes and has not progressed, it is likely that you are submitting it during a period of high network demand. This usually indicates that you have not included a sufficient gas fee to process your transaction promptly.
Does Polygon Matic burn? ›
The MATIC tokens are now burned and indexed in the “Completed Burns” section, which will also show the final transaction hash.
What is the prediction for polygon Matic? ›
Polygon (MATIC) Price Prediction - Industry Expert Opinion
DigitalCoinPrice predicts that MATIC could reach $2.43 in 2023 and $3.91 in 2025. Their long-term projection for 2030 is $11.45.
What is Polygon Matic explained simply? ›
Polygon is a “layer two” or “sidechain” scaling solution that runs alongside the Ethereum blockchain — allowing for speedy transactions and low fees. MATIC is the network's native cryptocurrency, which is used for fees, staking, and more.
Can Polygon hit $1000? ›
To cut a long story short, the answer is probably no. Let's take a closer look at the numbers to show you why you shouldn't expect Polygon to reach a price of $1,000. If Polygon had a market capitalization of $10 trillion, it would be more valuable than the world's 5 most valuable companies combined.
How much is 1 polygon matic worth in dollars? ›
Convert Polygon to US Dollar (MATIC to USD)
The price of converting 1 Polygon (MATIC) to USD is $0.6240 today.
Is Solana better than Polygon? ›
Polygon is more suitable for users who want to access a wide range of dApps on Ethereum with low gas fees and fast transactions. Solana is more suitable for users who want to access a new generation of dApps with low gas fees and ultra-fast transactions.
Polygon (MATIC) Price Prediction 2026
MATIC's price might continue to increase in 2026 as hype around the Ethereum ecosystem remains present. Furthermore, the total value locked of assets on the Polygon network could rally to $5 billion.
How many Polygon Matic holders are there? ›
How many Polygon holders are there? According to CoinCarp, there were 5,52,236 MATIC holders as of 9 December, up from 5,05,200 wallet holders on 10 November, a rise of 9.31%.
How do I cancel a stuck Polygon transaction? ›
If you'd like to "cancel" the transaction, the easiest way to do so is to set the send amount to 0.00000001 MATIC and increase the gas price.
What is the all time high of polygon Matic? ›
The all-time high of Polygon is $2.92.
Why is Polygon faster than Ethereum? ›
Ethereum (ETH) vs Polygon(POL): Key Differences
Polygon uses a Proof of Stake (PoS) consensus algorithm. Limited scalability leads to higher transaction fees and slower confirmation times during network congestion. Polygon is designed to enhance Ethereum's scalability, providing faster and cheaper transactions.
Can Polygon hit $100? ›
Polygon Price Prediction: Can Polygon Reach $100? At $100, Polygon Matic's Market Cap will be $872 B, not an impossible number in the long run. If Matic were to rise 30% a year, it would take it 18 years to reach $100. That would be the year 2040.
How much Polygon Matic is left? ›
The current circulating supply of Polygon is 9.28B.
What is the best wallet for Polygon Matic? ›
Best Polygon Wallets Compared
| Wallet name | Type of wallet | Price |
|---|
| Exodus WalletRead More | Hot wallet | Free |
| Trezor Model TRead More | Hardware wallet | $219 |
| WalletConnetRead More | Software wallet | Free |
| SafePalRead More | 3 in 1 (hardware and software wallet) | App and extension: Free Hardware: $49.99 |
7 more rows2030 could be the year when Polygon trades at more than $50 for the first time according to a Matic price prediction given by Trading Education experts. The experts explain that the coin may trade between $43.68 and $54.85 per coin. It will therefore manage an average price of $50.45 by the end of the year.
How much will a Polygon be worth in 2025? ›
Top 10 Cryptos in 2024
| Coin | Market Capitalization | Current Price |
|---|
| Ethereum (ETH) | $422 billion | $3515 |
| Binance Coin (BNB) | $87 billion | $595 |
| Solana (SOL) | $66 billion | $143 |
| Ripple (XRP) | $27 billion | $0.499 |
6 more rows6 days ago
MATIC Price Prediction 2026
Anticipating further expansion, MATIC's potential high for 2026 is projected to be $4.48, while the potential low is estimated at $3.42, resulting in an average price of $3.95.
Who is behind Polygon MATIC? ›
Polygon began as the Matic Network in 2017, co-founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun, and Mihailo Bjelic.
How to get free MATIC? ›
Unlike mainnet tokens, it is possible to acquire testnet MATIC through a Polygon faucet for free! Crypto faucets are generally web-based applications enabling anyone to acquire free tokens. These apps often feature a minimal interface where users only need to enter their wallet address and hit a button.
Is Polygon Matic inflationary? ›
MATIC's current inflation rate is about 5%, but it's expected to decrease as the total supply approaches the maximum limit of 10 billion tokens.
How high can a polygon Matic go? ›
Polygon (MATIC) Price Prediction 2040
Crypto adoption is expected to skyrocket in 2040. Because of this, the broader market cap could be more than $10 trillion, and this could impact MATIC positively. With this forecast, MATIC could trade at $10 in 2040.
What is the carbon footprint of Polygon Matic? ›
The Polygon network's annual carbon emissions through July 2022 stood at 60,953.26 tonnes of carbon dioxide equivalent (tCO2e), according to a CCRI estimate. This puts the total emissions for the chain since its inception at 94,782 tCO2e.
