The supply of POL will exceed the original limit of 10 billion MATIC, with a 2% annual increase over the next 10 years

ChainCatcher news, the POL white paper shows that in order to ensure rewards for validators and support for the ecosystem, POL will issue additional tokens annually at a specific rate beyond the initial supply of 10 billion (all converted from MATIC).

Specifically, regarding validator rewards, Polygon suggests setting the annual issuance rate of POL for this purpose at 1% of the supply, which cannot be changed during the first 10 years. After that, the community can decide the specific value through the governance framework, but the issuance rate will never exceed 1%; for ecosystem support, Polygon also suggests setting the annual issuance rate of POL for this purpose at 1% of the supply. Similar to the validator reward issuance, this value can be reduced through the governance framework after 10 years, but will never exceed 1%.

Polygon explains that this setup is because the Polygon ecosystem and Web3 as a whole still need time to further mature and achieve mainstream adoption. Based on the historical adoption cycles of the internet and computing platforms, the maturity phase may actually take about 10-15 years. During this period, the ecosystem will require continuous economic support.

It is worth mentioning that in the previous MATIC token economic model, the token supply cap was fixed at 10 billion.

ChainCatcher previously reported that as part of the Polygon 2.0 roadmap, Polygon has proposed a technical upgrade for its native MATIC token. While waiting for community approval, MATIC will be converted to Polygon (POL), and the POL token is designed to operate across all Polygon protocols, including PoS, zkEVM, and Supernets. The overall goal of the upgrade is to ensure the scalability of the ecosystem without compromising security.

The upgrade plan from MATIC to POL is very straightforward. Token holders need to send their MATIC tokens to a specific smart contract, which will then return an equivalent amount of POL tokens. Polygon proposes to provide token holders with at least a four-year grace period to complete the upgrade process. (Source link)