Cryptocurrency News

Polygon’s EIP-1599 Upgrade is Slated for Next Week, MATIC Burning is Finally Here

By January 13, 2022 No Comments

On Wednesday, Polygon announced that the highly-anticipated EIP-1599 upgrade is coming to the leading Ethereum Layer-2 scaling solution early next week. The network upgrade will introduce MATIC burning mechanics and start putting deflationary pressure on its value.

Key takeaways:

  • The Polygon team shared the news on Twitter and clarified that the set of Ethereum improvement proposals (EIPs) that were first introduced via Ethereum London hard fork in August of 2021, are finally coming to the Polygon mainnet.

  • The team is aiming to activate EIP-1599 and related proposals on Polygon’s mainnet on January 18, at around 8:00 AM UTC, at block number 23,850,000. The mainnet launch comes a month after the hard fork rolled out to Polygon’s Mumbai testnet.

  • The London upgrade’s main features include a better estimation of transactions costs, which leads to a reduction in overpayments, and a fundamental change in the way transaction fees are handled – fees that were previously paid to miners will now be removed from circulation. 

  • Token burning, or destroying, is the process of removing coins from circulation, which plays a pivotal role in the supply and demand dynamics of a particular currency and creates deflationary pressure on the value of a single unit of currency.

  • When Ethereum burning was first introduced in August, the second-largest crypto began a multi-month long rally that saw its price reach the highest point to date of $4,867 on November 10. In the six months since ETH burning went live, more than 1.48 million ETH, worth nearly $5 billion, have been burned.

  • Polygon’s implementation of real-time burning mechanics comes a little over a month after Binance Coin burning was introduced on Binance Smart Chain (BSC). BNB burning differs from Polygon and Ethereum’s solution as some transaction fees are still distributed among the network’s validators and not entirely removed from circulation.

  • The price of MATIC has been trending upwards in recent days – the token gained roughly 25% in the last 72 hours and is trading just below its cycle high of $2.45 at the time of this writing.