Crypto Polygon (MATIC) Starts Burning, Will The Price Rise Again?

Polygon MATIC starts burning (StrapiKoshelek)

JAKARTA – Recently, Polygon is reported to have started burning the MATIC token. The Ethereum layer-2 scalability solution is implementing its biggest upgrade called Ethereum Import Proposal (EIP) 1559. The EIP-1559 proposal also includes burning the MATIC token for each transaction.

Last week, Cryptopotato reported that EIP-1559 would soon be implemented. The update started rolling out on January 18th following the success of Polygon launching the Mumbai testnet. Among the most important changes that will be implemented on the Polygon network is the MATIC token burning mechanism while increasing the visibility of fees.

EIP-1559 omitted first-price auctions as the primary mechanism for costing. Instead, there is a separate price floor for transactions to be included in the next block and a priority fee to speed up processing.

The base fee, which fluctuates depending on network congestion, is then burned. The Polygon upgrade will be backed by the world's largest crypto exchange, Binance.

MATIC has a total supply of 10 billion tokens. With that fixed amount of supply, any reduction in the overall number of tokens available on the market will have a definite deflationary effect.

The team has simulated the potential impact on the total supply of MATIC, taking Ethereum's experience since the London hard fork and its conclusions suggesting an annual burn of 0.27 percent of the total supply of MATIC.

"Two-step burn initiated on the Polygon network and completed on the Ethereum network," the announcement reads.

The process of burning the MATIC token will be able to be seen and monitored by users through the public interface. However, this has not yet been shown by the developer.

At the time of writing, the Polygon (MATIC) crypto price was at the level of IDR 29.362. MATIC prices have decreased by 6.1 percent in the last 24 hours. MATIC had incised an all-time high price (ATH) on December 27, 2021, at the level of IDR 41.449, according to data from Coinecko.