Polygon (MATIC) Tokenomics

What is MATIC?

MATIC is an ERC-20 token which powers the Polygon layer-2 Proof of Stake (PoS) blockchain built on top of the Ethereum blockchain.

 

Four things make Polygon Unique:

  1. Transforms Ethereum into a multi-chain system - like an internet of blockchains.
  2. Increases transaction speeds.
  3. Decreases transaction fees.
  4. Capitalizes on the security of the Ethereum blockchain.

Who founded Polygon?

The Polygon Network was founded in India, in October 2017, by three software engineers: Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. Mihailo Bjelic, an Information Systems Engineer, is a co-founder. In 2019, they changed the name to Polygon. Polygon’s partners include Chainlink, MakerDAO, and Decentraland.

What does Polygon do?

Polygon was created to try to solve Ethereum’s scaling and latency problems. Although Ethereum is popular for its Decentralized Finance (DeFi) projects and security, it has slow transaction speeds, high fees, and can offer a subpar user experience.

 

Polygon’s layer-2 solution for Ethereum works to improve the blockchain by making it more scalable and increasing transaction speeds.

 

Polygon processes transactions faster than Ethereum and has much lower gas fees. Polygon sidechains can handle up to 72,000 transactions per second, while the Ethereum blockchain can handle only around 30 per second. 

 

Additionally, one Polygon block can hold just over 65,000 transactions in one block. An Ethereum block can hold about 380 transactions.

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What is Polygon’s objective?

To provide access to Web3 for all. They attempt to achieve this by providing developers a scalable user-friendly platform for building dApps with low transaction fees and without sacrificing security.

How are MATIC staking rewards distributed?

12% of the total MATIC supply was allocated for staking rewards. All 1.2 billion were set to be released over a five-year period. There are over now over 400 million left to distribute.

 

The rewards are distributed between validators and delegators.  

How does MATIC get minted?

The entire MATIC supply was minted in its first block. The non-circulating supply sits in a reserve.

 

On the first mint, MATIC was distributed as follows:

  • Advisors: 4%
  • Private Sale: 4%
  • Network Operations: 12%
  • Team: 16%
  • Launchpad Sale: 19%
  • Ecosystem: 23%
  • Foundation: 22%

How does MATIC get burned?

A portion of each transaction fee is burned. The Polygon team estimates 0.27% of MATIC’s total supply (around 27 million) will be burned each year. 

Is MATIC inflationary or deflationary?

MATIC will eventually become deflationary once all 10 billion tokens are in circulation. 

When you own MATIC what exactly do you own?

You own the ability to transact on Polygon, stake MATIC, as well as vote on its governance.

What is on the Polygon roadmap?

Polygon plans to continue to work on scalability so that more dApps will be created, adding to the thousands already available on the Polygon network, like SushiSwap and Aave.

Polygon’s Green Manifesto aims to focus on sustainable development for blockchain. They have committed US$20 million to various initiatives utilizing Web3 technology building sustainable futures for all.

 

On top of the Green Manifesto, they are currently carbon neutral. 

 

What risks does MATIC have?

Polygon is not the only Ethereum scaling solution out there. It has many layer-2 competitors, including Arbitrum, Immutable-X, and Loopring (LRC). And if The Merge is successful at lowering transaction fees it may decrease a layer-2’s value proposition.

MATIC Tokenomics

MATIC ticker: $MATIC

Whitepaper

Lightpaper

Polygon Roadmap: Unable to source

Max Supply: 10,000,000,000

Total Supply: 10,000,000,000

Circulating Supply: 8,042,124,673

Market Cap: CA$9,341,877,283

Fully Diluted Market Cap: CA$11,616,180,627

Price: CA$1.16

ATH: CA$3.78

TPS (Transactions per second): 72,000 (estimate)

Developer Activity: High

TVL (Total Value Locked): US$2,312,684,442

Total Staked: US$2,393,874,947

 

Crypto Asset Statement - Polygon (MATIC)

*as of August 17th, 2022 at 11:00AM ET

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