Polygon (MATIC) is launching the EIP 1559 upgrade.
Activation of EIP1559 will introduce real-time burning of Polygon’s native token MATIC. On Dec 14th the developers of the Polygon first announced that they will deploy a fee-burning mechanism, like BNB and ETH.
After the successful rollout of EIP1559 on Mumbai Testnet last month, Polygon now has a block number for London Hardfork on Mainnet. Polygon will hit the London Block, where the EIP1559 and related EIPs will be activated on the Mainnet around 8 AM UTC on Jan 18th, 2022.
Polygon tweeted, “After the successful EIP-1559 upgrade on Mumbai Testnet last year, the much-awaited London Hardfork on Mainnet is here! EIP1559 and related EIPs will be activated on the Mainnet on Jan 18th around 3 AM ET / 8 AM UTC.”
After the successful EIP-1559 upgrade on Mumbai Testnet last year, the much-awaited London Hardfork on Mainnet is here!#EIP1559 and related EIPs will be activated on the Mainnet on 18th Jan around 3 AM ET / 8 AM UTC.
— Polygon | $MATIC 💜 (@0xPolygon) January 11, 2022
EIP 1559 aims to change the fee market mechanism. The upgrade eliminates the first-price auction as the main gas fee calculation.
In first-price auctions, people bid a set amount of money to pay for their transaction to be processed, and the highest bidder wins. With EIP-1559, there will be a discrete “base fee” for transactions to be included in the next block. Users who want to prioritize their transaction can “tip,” which is called a “priority fee,” to pay a miner for faster inclusion.
Although this upgrade will not help reduce transaction fees, it aids in decreasing the number of users that are overpaying and make users better estimate their costs.
The introduction of the EIP-1559 upgrade will help Matic become a deflationary asset that will have a broad effect on the Polygon community, including holders, validators, delegators, and developers.
Polygon’s MATIC has a fixed supply of 10 billion, so any reduction in available tokens will have a deflationary effect. Polygon team took Ethereum’s experience since the upgrade as the baseline to simulate the potential impact on MATIC’s total supply. The analysis conducted by the team shows that annualized burns would destroy 27 million MATIC in a year.