In the main Polygon network, on the block 23 850 000, implemented a mechanism for burning part of the transaction fees, similar to Ethereum. Activation took place on January 18 at 05:48 (Moscow time).
folks, #EIP1559 is a few hours away from going live on the #polygon mainnet.
The highly-anticipated upgrade brings $MATIC burn and improved fee visibility.
Find out more: https://t.co/7fRxSZIrdv
— Polygon | $MATIC 💜 (@0xPolygon) January 17, 2022
The supply of native tokens of the MATIC network is limited to 10 billion, of which only 6.8 billion are in circulation, according to CoinGecko. Developers believethat the protocol will burn 0.27% of the total MATIC emissions annually. In their opinion, the deflationary effect will benefit validators and delegates.
With the update, the project team has also abandoned the first price auction model for calculating gas fees. Thanks to this, users of dapps on the blockchain will receive more predictable commissions.
Because Polygon is a layer 2 secure solution network, token burning is a two-step process that ends on the Ethereum blockchain:
“Burning is a two-step process that starts on the Polygon network and ends on Ethereum. The Polygon team created public interface, where users can observe and participate in the process.”
As part of the process, tokens are transferred to special address in the Polygon network. However, the withdraw() function, which ensures that all coins are burned, “can be called by any address.”
On the Ethereum network, the target smart contract deployed at the same address. After the completion of the procedure at Polygon, ERC-20 standard tokens are burned in the blockchain of the second largest cryptocurrency by capitalization. The corresponding function can also be called by any user.
At the time of writing, the Polygon network has retired 2,693 MATICs (~$5,924 at current exchange rates), according to Polygonscan.
In December 2021, a similar mechanism was deployed on the Mumbai testnet. Since that time, the protocol has burned over 100,000 MATICs.
Recall that in 2021, the Bruno hard fork took place in the Binance Smart Chain network, during which the developers also implemented the algorithm for burning part of the transaction fees.
