MATIC Burn Starts As EIP-1559 Goes Live On Polygon Mainnet

MATIC burn starts as the EIP-1559 went live on the Polygon mainnet as we are reading more in today’s blockchain news.

Polygon is one of the most popular layer-2 scaling solutions of ETH which saw its mainnet implement one of the biggest upgrades as of late. This is the Ethereum improvement proposal latest 1559 which will start burning MATIC tokens as a part of every transaction. The reports show that EIP-1559 was scheduled to go live soon and the team announced that the update has been rolled out after an upgrade of the Mumbai testnet.

Among other things, the most important change will happen to the Polygon network as the introduction of the deflationary token burning mechanism that will destroy the network’s MATIC token while also improving fee visibility. The MATIC burn starts now as EIP-1559 got rid of the first-price auction as the main mechanism for fee calculation so there’s also a discrete base fee for transactions to get included in the next block and a priority fee to speed up the processing. The base fees that fluctuate depending on the network congestion are also burned, according to the announcement.

The upgrade itself was supported by a few major exchanges including Binance and it took place at block height 23,850,000. At the time of writing, MATIC’s price got down by 7.8% in the past day and it is worth taking a look at the long-term implications of the introduction of the burning mechanism. However, unlike Ethereum, MATIC has a fixed supply of 10 billion so a reduction in the overall number of tokens available ont the market will have a deflationary effect.

The team even simulated the potential impact on the MATIC total supply which took Ethereum’s experience since the London hard fork with the conclusions suggesting an annualized burn of 0.27% of the MATIC total supply. The official post reads that:

“The burning is a two-step affair that starts on the Polygon network and completes on the Ethereum network.”

There’s also a public interface where the users can monitor the entire process but it has yet to go live at the time of writing.