Polygon Announces Details About POL Upgrade: Where Is MATIC Price Headed Next?

Polygon has announced today details about the POL upgrade and its PoS staking mechanism. On September 4, 2024, POL will replace MATIC as the native gas

Polygon (CRYPTO: MATIC) has announced details about the POL upgrade and its Proof-of-Stake (PoS) staking mechanism on Monday.

Here's a summary of the key features and the latest on MATIC price movements.

What Happened: On September 4, 2024, POL will replace MATIC as the native gas and staking token for the Polygon PoS network.

The goal is for POL to have expanded utility compared to MATIC.

The transition from MATIC to POL is planned to occur over a period of time, potentially up to four years.

There are currently no deadlines for MATIC holders on Ethereum and Polygon zkEVM to upgrade to POL, although the community may decide to establish a deadline in the future.

Key Features Of POL And Staking Mechanism: The staking token is crucial in maintaining security, incentivizing validators, and ensuring network health and scalability. Staking is central to Polygon PoS consensus.

By staking POL, validators commit tokens to participate in network validation and governance. This secures the network but also ensures validators are committed to confirming transactions smoothly and efficiently.

Validators and delegators earn rewards for their participation. These rewards come from staking incentives (1% of annual inflation) and transaction fees, ensuring a steady stream of incentives for validators working hard to maintain network security and performance.

Validators have key responsibilities like block production, checkpoint signing, and proposing new blocks. The incentives are structured to ensure they’re adequately motivated to maintain the security and resilience of the network.

POL’s delegation mechanism allows broader participation in staking to further expand network security.

Delegators can stake POL with trusted validators and earn rewards proportional to their staked amount for adding to network security, making it accessible for all token holders.

Governance of the staking mechanism is decentralized through the Polygon Improvement Proposal (PIP) process. This allows the community to adjust emission rates, oversee security protocols, and ensure the system remains adaptable to network needs.

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MATIC Price Now: At the time of writing, MATIC price was trading slightly above $0.41, as per CoinMarketCap data.

The token has seen a price drop of over 86% from its all-time high of $2.92, reached in December 2021.

Investors might have issues investing in a token that won’t exist with that ticker in the future. This can be a psychological barrier even though it will be a 1:1 upgrade to POL.

The 200-day Moving Average is now at $0.74, which is very bearish for MATIC. This indicator suggests that the long-term trend is downward, and the price needs to climb significantly to reverse this bearish sentiment.

MATIC has been trading in a descending channel since March, and the price still hasn’t broken out of this channel. This continued downtrend is concerning for investors and traders alike.

We don’t expect any heavy price pumps for MATIC in the upcoming weeks, especially when the market is in its current state. Even if the market starts pumping, MATIC should first flip the 200-day MA resistance into support, but that doesn’t seem likely at the moment.

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