MATIC Holders to Benefit from Polygon’s Shift to POL? Key Details

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 for the PoS chain of the Polygon network.

This transition will enable enhanced network performance, and POL will be seen as one of the key contributors to Polygon’s AggLayer project.

MATIC to POL Migration: Key Details

This switch from MATIC to POL will be gradual in order to prevent any interruption of the service. POL will act as the gas and the staking token of the network that will be the successor of MATIC.

The upgrade will first affect Polygon MATIC holders on Ethereum, Polygon zkEVM, and those who have interacted with a CEX as a token swap will be needed.

Nevertheless, the MATIC token holders on the Polygon PoS chain will not have to do anything 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, Polygon zkEVM, and CEX may need to…

— Wu Blockchain (@WuBlockchain) August 19, 2024

Another vital element of this migration is the AggLayer project of Polygon. POL will also play a crucial role in this multi-chain system, which aims to increase compatibility and fast transaction processing within the Polygon network.

To this end, Polygon has introduced POL into the AggLayer in order to boost its scaling features while maintaining security and decentralization.

Impact on MATIC Price and Market Activity

MATIC’s price fluctuations have also been evident in the period leading to the migration, suggesting market volatility.

The token was trading at $0.4197 at press time, representing an increase of 1.51%. This has been attributed to the rise in trading volume, which has risen by 30% to about $144 million. The growing interest in MATIC shows that the market is bullish, and the token may continue to rise.

From the technical analysis point of view, MATIC may have the potential for an upward trend. The MACD indicator is also showing signs of a bullish crossover, which suggests that the pressure is positive.

If the price goes above the $0.45 level, the MATIC can reach $0.5 and potentially continue the upward movement. Nevertheless, if the market environment deteriorates, the price may fall back to the $41 support level.

MATIC price action | Source: TradingView

However, the network activity of Polygon has been observed to drop to multi-month lows even with these price actions.

On August 19, the Polygon PoS chain had the fewest transactions since December 2023, which suggests that users were waiting for the migration. This downtrend suggests that the users may choose to wait until the transition is over before proceeding with their transactions.

Outlook for Token Holders

MATIC holders are now at a crossroads as the project is preparing to switch to the POL network. The change could benefit the network and, therefore, increase the value of POL in the longer term.

Nevertheless, the effect on the MATIC price will not be apparent right away, as market factors will come into play.

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

Therefore, these figures demonstrate that there is still demand for Polygon’s DeFi products despite the network’s migration.

Source