Ethereum EIP-1559 upgrade launches on Polygon to burn MATIC

The layer-two scaling network Polygon has deployed the Ethereum upgrade that featured a partial network fee burning mechanism in August last year.

Last summer, Ethereum released the EIP-1559 upgrade with its London hard fork, which has shown to be a success in terms of gas price predictability and network fee burning. The upgrade is already live on Polygon, a layer-two scaling network, with the goal of improving “fee visibility.” It became online at block 23850000 approximately an hour ago.

Following its successful deployment on the Mumbai test net, the Polygon team announced the upgrade date on Jan. 17.

Polygon receives the same fee-burning mechanism with the EIP-1559 upgrade, resulting in the destruction of MATIC tokens. It also does away with the first-price auction approach of determining network fees, which improves cost estimates but does not lower gas costs.

“The burning takes place in two stages, beginning on the Polygon network and ending on the Ethereum network.”

START TRADING NOW WITH INCREDIBLE LOW TRADING FEES

According to the creators, MATIC’s supply is anticipated to become deflationary, with 0.27 percent of the overall supply being burned every year, similar to Ethereum. There are a total of 10 billion MATIC tokens in circulation, with 6.8 billion actively in use.

“Because their rewards for processing transactions are denominated in MATIC, deflationary pressure would benefit both validators and delegators,” it continued, before adding that the update would help cut spam and network congestion.

Despite being a layer-two network, Polygon just experienced its own gas shortage. According to Dune Analytics, Polygon gas fees increased earlier this month, causing some validators to fail to submit blocks. The rise in demand was caused by Sunflower Land, a DeFi yield farming game that rewarded early adopters before the degens lost interest.

According to the burn tracker, the upgrade has resulted in the burning of 1.54 million ETH since it went live on Ethereum some six months ago. This calculates out to about $5 billion at current ETH pricing. The tracker also forecasts that after “the merge” occurs and proof-of-stake becomes the network’s dominant consensus mechanism, Ethereum issuance would become deflationary by -2.5 percent every year.