Polygon (MATIC) to POL Token Migration: Key Details, Impact, and Outlook for Token Holders

Polygon has scheduled the change from MATIC to POL tokens for the 4th of September this year. The POL token will be the primary gas and staking token

Polygon (MATIC) is preparing to switch to the POL network, a move that will see the POL token become the primary gas and staking token for the PoS chain.

This change is part of a broader effort to enhance network performance and will also contribute to Polygon’s AggLayer project.

The transition will occur gradually to avoid disrupting service. After the upgrade, POL will serve as the gas and staking token, taking over from MATIC.

The upgrade will initially impact Polygon MATIC holders on Ethereum, zkEVM, and those who interacted with a CEX, where a token swap will be necessary.

However, MATIC token holders on the Polygon PoS chain will not need to take any action, as the tokens will be credited to their POL wallets at a 1:1 ratio.

Polygon announced that the migration of MATIC to POL tokens will take place on September 4. POL replaces MATIC as the native gas and staking token of the Polygon PoS network and will play a key role in the AggLayer. MATIC holders on Ethereum, zkEVM, and CEX may need to…

Another key aspect of this migration is Polygon’s AggLayer project. POL will also contribute to this multi-chain system, which aims to enhance compatibility and fast transaction processing within the Polygon network.

To achieve this, Polygon has integrated POL into the AggLayer to bolster its scaling capabilities while maintaining security and decentralization.

The Impact on MATIC Price and Market Activity

In the lead-up to the migration, MATIC’s price has also experienced fluctuations, indicating volatility in the market.

At press time, the token was trading at $0.4197, showing an increase of 1.51%. This rise can be attributed to the increase in trading volume, which surged by 30% to reach around $144 million.

The growing interest in MATIC suggests a bullish market sentiment, and the token may continue to experience price increases.

From a technical analysis perspective, MATIC could potentially experience an upward trend. The MACD indicator is also showing signs of a bullish crossover, indicating positive pressure.

If the price manages to break above the $0.45 level, MATIC could reach $0.5 and continue its upward movement. However, if the market conditions deteriorate, the price may drop back to the $41 support level.

Despite these price movements, Polygon’s network activity has dropped to multi-month lows.

On August 19, the Polygon PoS chain processed the lowest number of transactions since December 2023, suggesting that users may be holding back on transactions in anticipation of the migration. This decline indicates that users may be opting to wait until the transition is complete before resuming their transactions.

Outlook for Token Holders

As the project prepares to shift to the POL network, MATIC holders are presented with a unique opportunity. This change could benefit the network and, by extension, increase the value of POL in the long term.

However, the impact on MATIC price will not be immediately apparent, as market forces will continue to play a role.

Meanwhile, the Polygon DeFi sector continues to perform well despite the overall decline in activity. The network’s total value locked (TVL) increased by 5%, and the decentralized exchange (DEX) trading volume surged by 21%.

These figures demonstrate that there is still demand for Polygon’s DeFi products, even as the network prepares for its migration.

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