In brief
- The CEO of the Polygon Foundation has detailed new mechanisms for Polygon’s POL token, including deflationary burns and staking rewards tied directly to network usage.
- The move follows a slump in active addresses and a surge in daily transaction fee revenue.
- POL is down 6.7% on the day, with analysts attributing the drop to normal market volatility and a healthy pause, rather than a rejection of Polygon’s long-term roadmap.
The CEO of the Polygon Foundation released a primer Friday explicitly outlining the value accrual mechanisms for the network’s native token, POL, framing it as a direct beneficiary of the ecosystem’s growth.
Sandeep Nailwal said that his tweet was intended to “explicitly restate what has always been true: If Polygon Chain and Agglayer succeed, then POL holders benefit. Full stop.”
Following Nailwal’s tweet, POL hit a weekend high of $0.1842, before erasing the lion’s share of its gains with a drop of 6.7% over the past 24 hours, according to CoinGecko data.
Polygon’s choppy start to the week occurred against a backdrop of bullish fundamental messaging from executives and a broader altcoin rally, coinciding with mixed on-chain signals.
While Polygon’s daily revenue surged from lows of about $13,000 in mid-December to around $200,000 in the past week, its active address count has slumped from highs of 2.9 million in mid-December to roughly 489,000, according to Growthepie data.
According to Ryan Lee, Chief Analyst at Bitget, POL’s recent price drop “appears to be normal market volatility following an initial surge after the Open Money Stack announcement.” He argued that, “Enhanced utility, burns, and staking mechanisms strengthen POL’s fundamentals, supporting sustained growth for the industry.”
Nailwal’s post highlighted three primary benefit streams for POL holders, including transaction fees, staking rewards, and future interoperability fees from Agglayer.
His tweet also emphasized the token’s deflationary design, noting that 100% of base transaction fees on the Polygon chain are burned.
The Polygon Foundation CEO cited recent network demand, which saw a single-day burn of 3 million POL, arguing that an average burn rate of 1.5 million POL per day would translate to an annual deflation of roughly 5% of the total supply, which he claimed would make POL “the most deflationary token in the entire industry.”
Transaction counts have also been elevated, recently hitting 5.9 million in a day, though this still trails Base’s 10.1 million.
Polygon’s Open Money Stack
Alongside Polygon Labs CEO Marc Boiron, Nailwal recently unveiled plans for an “Open Money Stack,” a long-term initiative that aims to move “all money onchain.”
The ambitious framework targets the multi-trillion-dollar global money movement market, positioning Polygon’s existing infrastructure as the foundation for the next era of financial transactions.
Bitget’s Ryan Lee hailed the Open Money Stack as a “a highly innovative and forward-thinking initiative that integrates blockchain rails, stablecoin interoperability, compliance tools, and fiat on/off-ramps into a modular framework,” adding that it positions Polygon as “a leader in enabling seamless, global on-chain payments, and arguing that it will “significantly drive mainstream adoption in the crypto industry.”
Jamie Elkaleh, CMO at Bitget Wallet, echoed the view that short-term price action shouldn’t overshadow Polygon’s strategic vision. “The upgraded tokenomics through stronger utility, burns, and staking suggest fundamentals are improving even as short-term sentiment fluctuates,” Elkaleh told Decrypt.
Looking ahead, Lee expects POL to “consolidate and oscillate in the $0.15–0.25 range in the near term,” providing what he termed “a healthy accumulation zone ahead of broader ecosystem expansion.”
Meanwhile, the wider investor outlook remains largely bullish, with users of prediction market Myriad, owned by Decrypt’s parent company Dastan, putting a 76% chance on Bitcoin hitting $100,000 rather than dropping to $69,000. However, they place just a 19% chance on an “alt season” taking place in the first quarter of the year.
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