Ethereum’s EIP-1559 deflationary upgrade is now live on Polygon mainnet

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The EIP-1559 upgrade, which launched on Ethereum (ETH) last August, is now live on the network’s scaling solution, Polygon (MATIC).

For Ethereum, the upgrade came with the London hard fork, introducing gas fee predictability and token burning. Polygon, on the other hand, first introduced the upgrade on the Mumbai testnet on Jan. 17. Following its successful deployment, the team has now taken the upgrade live on the Polygon Mainnet about four hours ago at block 23850000.

Just like in Ethereum, EIP-1559 improves “fee visibility” on Polygon. It also brings the same fee-burning mechanism, destroying MATIC tokens. And even though it does not effectively cut down on transaction costs, the upgrade does away with the first-price auction method of calculating gas fees. This makes it easier for users to estimate transaction costs on the network.

EIP-1559 now live on Polygon mainnet

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

According to the Polygon team, 0.27 percent of MATIC’s total supply will be destroyed annually, possibly resulting in a deflationary system. MATIC has a total fixed supply of 10 billion units, with 6.8 billion of these currently in circulation. The team noted;

Deflationary pressure will benefit both validators and delegators because their rewards for processing transactions are denominated in MATIC,

Even more, EIP-1559 is expected to deter spam transactions and reduce network congestion. Despite being a layer-two network, Polygon has had its share of gas fee crisis. Earlier this month, Polygon-based yield farming gaming Sunflower Land saw a surge in interest since it rewarded early adopters. Dune Analytics notes that this resulted in skyrocketing of Polygon fees, causing failure to submit blocks by some validators. The likelihood of a repeat event is expected to be lowered with EIP-1559 on Mainnet.

Side notes

Per the Ethereum burn tracker, 1.54 million ETH has been burned since EIP-1559 was implemented about six months ago. At current ETH prices, the amount burned is about $5 billion. The tracker also predicts that ETH issuance will become deflationary by -2.5 percent once “the merge” is done. Ethereum’s proof-of-work (PoW) network is expected to merge with the proof-of-stake Beacon chain this year. The more eco-friendly, efficient, and secure PoS will become the primary consensus for Ethereum.

Just as the wider crypto market is registering losses on a short-term scale, the MATIC token is down 8.0 percent in the day to trade at $2.22. However, the network has seen and continues to see various developments – the reason why one analyst is quite bullish on MATIC this year.

Source: https://www.crypto-news-flash.com

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