What is Polygon (POL) and how did it come about?

Founded in 2017 by three Indian developers to tackle the nagging issue of scalability, Polygon is an Ethereum-based blockchain. Its cryptocurrency, initially known as MATIC, was officially launched in 2019 via an Initial Exchange Offering (IEO) on Binance.

In 2021, the ‘Matic’ project was rebranded as ‘Polygon’, evolving from a mere Layer 2 blockchain into a fully-fledged framework for developing scalable decentralised applications (DApps).

In September 2024, the team unveiled a significant upgrade, Polygon 2.0, which includes the official migration from MATIC to POL as the core token of the Polygon ecosystem. Today, Polygon remains a key reference point for developers building decentralised applications on Ethereum.

Intriguingly, the Polygon team has coined a specific definition for the new POL token: the “hyperproductive token” or “third-generation token.” This terminology becomes clearer when you look at their communication, which classifies tokens based on their productivity:

• Bitcoin (BTC): Considered an unproductive token (first generation). While essential for the Bitcoin blockchain, it doesn’t offer any governance benefits to its holders.
• Ethereum (ETH): Falls into the productive token category (second generation). It allows holders to take on the role of validators and receive rewards for that activity.
• Polygon (POL): Is defined as hyperproductive: It incorporates all the features of “productive” tokens but introduces two crucial improvements: validators can operate across multiple chains, and each individual chain can offer validators various roles, with corresponding rewards.

Why Consider Buying Polygon (POL)?

Purchase Polygon, irrespective of the current value of POL, because it’s a blockchain that promises to solve one of Ethereum’s biggest headaches: scalability. What’s more, Polygon is increasingly emerging as a leader within a network of interconnected blockchains via Agglayer, aiming to unify liquidity and share information more easily and securely.

On Polygon, gas fees—the necessary charges to process transactions—are paid in the POL token, which also permits participation in the protocol’s governance. This is a point of difference, as on most Ethereum Layer 2 blockchains, you are forced to use ETH for this purpose. This burning mechanism, where a small amount of POL is used (and thus ‘burnt’) every time someone uses the network, could be another good reason to buy Polygon.

POL Price Performance

As mentioned, Polygon has undergone a year of transformation with the highly anticipated migration to the new POL token, which kicked off on 4th September. This update certainly stirred up a bit of action concerning the token’s price performance: in the first three months following the launch, POL achieved notable results, even touching the psychologically important $1 mark. However, once the initial excitement subsided, the token returned to lower levels, settling at roughly $0.15, before then staging a comeback: in the last month, it has climbed by around 40%. In any case, despite the volatility, strategic partnerships and the shift to POL could offer new long-term growth opportunities for the project.