Introducing Polygon 2.0 With new Govrnance and Tokenomics Will Hold its Position as Best L2

July 20, 2023

Darko Simunovski content is written in English. Translations into other languages are automated and there may be minor text errors.

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HUGE NEWS for Polygon MATIC holders, introducing Polygon 2.0 with new governance and new tokenomics, that will help Polygon to secure its spot as best layer 2 Ethereum’s solution. The democratization of access to information that the internet brought about was a transformative step in human history, breaking down barriers and empowering individuals with knowledge like never before. However, the internet’s full potential was not fully realized until the advent of the Value Layer, which further democratized access to the global economy.

The Value Layer represents a paradigm shift in how economic transactions and interactions take place online. It leverages decentralized finance (DeFi) principles, digital ownership, and novel coordination mechanisms to create an ecosystem that serves users directly, circumventing the need for traditional gatekeepers, rent-seekers, and middlemen that have often dominated centralized systems.

Polygon 2.0 goal is to serve as the blueprint for constructing this Value Layer. It proposes radical upgrades to nearly every aspect of the existing Polygon protocol, including protocol architecture, tokenomics, and governance. This ambitious endeavor seeks to address the limitations faced by individual blockchains, which have strict throughput limitations. While new chains can be created to enhance capacity, this approach often results in fragmented liquidity and compromises security and capital efficiency.

The core concept of Polygon 2.0 is to establish a network of ZK-powered Layer 2 (L2) chains, interconnected through a novel cross-chain coordination protocol. From the user’s perspective, this network will appear as a seamless and cohesive entity, akin to using a single chain. The advantage of this design is that the network can accommodate an almost unlimited number of chains, allowing for substantial scalability without sacrificing liquidity or security. The integration of Zero-Knowledge proofs (ZK) in the L2 chains contributes to enhanced privacy and efficiency in transactions, ensuring that cross-chain interactions occur safely and instantaneously without requiring additional security or trust assumptions.

By enabling such a Value Layer, Polygon 2.0 aims to empower individuals worldwide by providing them with greater control over their finances, ownership of digital assets, and access to a more efficient and open global economy. This groundbreaking approach paves the way for a decentralized future, where users are the true beneficiaries and protagonists of the digital landscape, ushering in a new era of economic democratization and empowerment.

Polygon 2.0: Tokenomics

Since its establishment in 2020, the Polygon network has been powered by its native coin, MATIC. However, recognizing the need to enhance the platform’s infrastructure and evolve it into the Value Layer of the Internet, a comprehensive redesign of the Polygon protocol architecture has been introduced. This redesign encompasses various technical upgrades that span across all aspects of the infrastructure, including the native token itself.

The objective of these improvements is to propel Polygon into a more sophisticated and capable ecosystem that can cater to the demands of decentralized finance (DeFi), digital ownership, and other groundbreaking applications. As a result, the token’s functionality and role within the network are being redefined to align seamlessly with the overarching vision of creating a Value Layer that democratizes access to the global economy.

Polygon’s POL (Successor of MATIC) takes the next leap in this direction and introduces the third generation of native assets (POL as one token for all Polygon chains), similarly to productive tokens, it enables its holders to become validators and receive rewards, but with two game-changing improvements:

  • Validators can validate multiple chains, i.e. as many chains as they want
  • Every chain can offer multiple roles (and corresponding rewards) to validators.
  • This novel design secures, coordinates and aligns the Polygon ecosystem and supercharges its further growth, at the same time offering practically unlimited opportunities to POL holders.

The utility of POL revolves around validators, with the goal of aligning and incentivizing them to perform useful work. Validators are required to stake POL in order to join the validator set and they stake POL, validators enter the validator pool and become eligible to subscribe to validate any Polygon chain. In return for performing this useful work, validators can establish at least three incentive streams:

  • Protocol rewards, which would replace current MATIC protocol rewards that Polygon validators will receive POL.
  • Transaction fees in POL native coin, that validators are allowed to validate on any number of chains.
  • Additional rewards to attract more validators, as some Polygon chains can choose to introduce additional rewards, such as stablecoins or native tokens of those Polygon chains.

The initial supply of POL will be 10 billion tokens, which matches the supply of MATIC, which should make the migration quite straightforward. It is very important to note that distribution of POL would replace MATIC coins on exchanges, while for for self-custody MATIC holders, the migration would require swap from MATIC to POL, using the swapping smart contract that should be created for that purpose.

According to the whitepaper for POL, the maturity (all POL coins to be minted) phase could be realistically expected to happen in about 10-15 years.

Polygon 2.0: Governance

The Three Governance Pillars have been carefully crafted to address the need for effective governance within the Polygon ecosystem. These pillars serve as a comprehensive framework encompassing all governable elements in the network, ensuring clear definitions of decision-makers and the mechanisms through which decisions are made.

The rationale behind this approach lies in the concept of separating powers and competencies, this makes governance mechanisms become more scalable and efficient, streamlining the overall decision-making process. This separation allows for a compartmentalized governance structure, where different aspects of the ecosystem can be managed independently, promoting specialization and expertise in each domain.

With the Three Governance Pillars in place, the Polygon community can govern the network with clarity and purpose. This structured approach empowers the appropriate stakeholders to make informed decisions in their respective areas of expertise, fostering a governance system that is well-tailored to the diverse needs of the ecosystem.

  • Protocol Governance facilitates decentralized maintenance and development of the Polygon tech stack. The Polygon Improvement Proposal (PIP) framework has been thoughtfully designed to foster the open-source maintenance and development of the Polygon PoS chain. This framework introduces a structured approach to handling proposals, enabling seamless coordination and consensus-building for upgrades within the network. There are four distinct categories that a PIP can fall into, namely Core, Contracts, Interface, and Informational.
  • System Smart Contracts Governance facilitates the upgrades of protocol components that are implemented as smart contracts. To establish an effective governance process for smart contract upgrades, it is essential to break them down into distinct and comprehensive components. Regular upgrades focus on scheduled updates, ensuring a systematic approach to enhancing the smart contracts. On the other hand, emergency upgrades tackle critical vulnerabilities and exploits that pose a significant risk to the overall health and security of the network.
  • Community Treasury Governance facilitates ecosystem and public goods funding for the longevity of Polygon protocols. The proposal aims to enhance community involvement and authority in decision-making gradually. Initially, a council of ecosystem members will oversee application selection and fund distribution on-chain, ensuring transparency. However, the ultimate goal is to transition to a community-led framework where the community takes charge of fund allocation, project selection, voting, and implementation. Innovative governance models may be introduced later to facilitate this process.

The aim is to strike a balance between centralization and decentralization, where decisions are made by relevant participants while ensuring that the overall governance remains decentralized and community-driven. This way, the Polygon ecosystem can achieve effective governance that supports scalability, fosters growth, and promotes the long-term sustainability of the network.


The future of Polygon’s POL token holds great promise and potential for the ecosystem. As the network continues to evolve and transform into the Value Layer of the Internet, the POL token will play a central role in driving innovation, security, and decentralization.

With its highly decentralized pool of PoS validators, POL will strengthen the ecosystem’s security and credibility, providing a resilient foundation for thousands of interconnected chains. Its infinite scalability will enable mainstream adoption, facilitating seamless transactions and interactions for users worldwide. Moreover, the Three Governance Pillars will ensure efficient and scalable governance mechanisms, empowering the community to actively participate in decision-making processes. The introduction of the Polygon Improvement Proposal (PIP) framework further promotes open-source development and community-driven upgrades, fostering a network that adapts and evolves in a collaborative manner. This core updates will help Polygon to firmly secure its spot as best layer 2 Ethereum solution.

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