There are various strategies for boosting the price of a cryptocurrency whose performance is considered disappointing. This is the approach that Polygon investors want to apply to its POL token, with a proposal calling for a revision of its tokenomics.
Polygon: towards a revision of POL tokenomics?
At a time when the ecosystem deployed in parallel with the Ethereum blockchain was less developed, the Polygon project established itself as a leading player in deploying popular protocols and hosting projects led by iconic companies.
Its significant popularity in 2021 is currently experiencing a notable slowdown, to the point where its total value locked (TVL) has fallen eightfold since that period, currently standing at $1.18 billion.
And what about the price of its POL cryptocurrency, which has fallen by almost 40% over the past year? With a price of around $0.25, it is difficult to imagine it reaching a new high anytime soon, let alone its previous ATH of $2.90 in December 2021, when it was still trading under the MATIC ticker.
Clearly, this disappointing performance is not acceptable to some POL token holders, such as the investor known by the pseudonym Venturefounder, who has just posted a proposal on the official Polygon forum. The goal? A thorough review of the tokenomics of this cryptocurrency.
These changes aim to align the dynamics of POL’s supply with its current technological and strategic reality, strengthen investor confidence, and prevent token devaluation and network stagnation.
Venturefounder
On the agenda: lower inflation, buyback, and burn
The focus of this proposal is the current tokenomics of the POL cryptocurrency, whose supply is increasing by approximately 200 million additional units each year, representing an estimated annual inflation rate of 2%. According to Venturefounder, this factor is responsible for persistent selling pressure on its price.
In light of this situation, two options are proposed (the first of which is presented as the preferred option):
- Lock POL’s annual inflation at 0% as of the next protocol upgrade;
- Initiate a schedule to reduce inflation by 0.5% per quarter until it reaches 0%.
In conjunction with this, the author of this proposal is also calling for the implementation of a POL token buyback program, combined with a burn procedure, “financed by Polygon’s Treasury surpluses or ecosystem revenues.”
According to Venturefounder, this situation is largely attributable to the Polygon team’s mismanagement since 2022, particularly its delay in delivering key infrastructure such as its AggLayer interoperability protocol.
Despite everything, the Polygon ecosystem remains very present in the development of popular markets, such as the tokenization of real-world assets (RWA), while maintaining a large community of developers, particularly in Latin America.
