Polygon Labs has announced Ethereum Layer 2 blockchain Polygon’s technical upgrade for MATIC to POL will go live on September 4, 2024.
The Polygon (MATIC) price traded lower amid the news, although the losses also reflected the downside pressure across other cryptocurrencies.
MATIC to POL transition
Polygon’s transition from MATIC to POL is an upgrade that first surfaced in July last year and made to community governance via PIP-17 in September.
In this proposal, the key idea is the replacement of MATIC with a new token that would be used for gas and staking. This upcoming upgrade is a step that follows the POL ERC-20 contract implementation in October 2023.
Polygon Labs made the official announcement for the upgrade to POL on Thursday, revealing the initial phase as one that will see POL replace MATIC. In later phases of the upgrade, POL will take on more network functionality, including in the AggLayer.
The AggLayer is a decentralized protocol with a common bridge and ZK-powered mechanism designed to solve issues of blockchain fragmentation through sovereign chains and shared liquidity.
“But even as the aggregated Polygon network emerges, POL will have immediate utility on the widely adopted Polygon Proof-of-Stake (PoS) network that exists today: POL will be the native gas and staking token of Polygon PoS—and fundamental to Polygon network security,” Polygon Labs wrote in a blog post.
What does it mean for MATIC holders?
According to Polygon Labs, those who hold MATIC on the Polygon PoS chain don’t have to do anything as the upgrade from MATIC to POL will be automatic.
However, for holders with their MATIC tokens on other chains and platforms may have need take certain actions. These other chains include Ethereum and Polygon zkEVM as well as centralized exchanges (CEXs).
In this case, when the upgrade date rolls in, those ready to migrate MATIC to POL will need to use a migration contract.