A brand new proposal to overtake Polygon’s tokenomics is gaining momentum on the undertaking’s governance discussion board and throughout social media, as buyers voice frustration over POL’s steep underperformance in comparison with the broader crypto market.
The proposal, authored by activist token investor Venturefounder, requires main revisions to Poilygon’s (POL) provide mannequin, together with the elimination of its 2% annual inflation fee and the introduction of a treasury-funded buyback or burn program to scale back ongoing promote strain.
“These adjustments are meant to align the availability dynamics of POL with its present technological and strategic actuality, reinforce investor confidence, and stop additional token devaluation and community stagnation,” Venturefounder wrote within the discussion board put up.
Underneath the present mannequin, Polygon’s 2% annual inflation provides roughly 200 million new POL tokens to the market every year — an element the writer argues has created persistent downward strain on worth. The proposal suggests both transferring to a 0% inflation goal to determine a set provide or adopting a tapering schedule, lowering inflation by 0.5% per quarter till it reaches zero.
The writer cites BNB (BNB), Avalanche (AVAX) and Ether (ETH) as examples of tokens which have benefited from deflationary or fixed-supply fashions, arguing {that a} comparable method might strengthen POL’s worth proposition.
The proposal follows a broadly circulated manifesto posted by Venturefounder on X, which has garnered over 25,000 views. In that put up, the investor described POL’s 46% decline over the previous 12 months, and its present buying and selling stage beneath 2022 bear-market lows, as “inexcusable” throughout what many contemplate a crypto bull market led by Bitcoin (BTC) and Ether.
“These excuses are NOT VALID,” Venturefounder wrote. “There may be nothing unsuitable with the market, there’s something SERIOUSLY unsuitable with POL, and it’s DOWN BAD.”
Along with the inflation concern, the manifesto criticized a sequence of strategic missteps by the Polygon group since 2022, whereas urging extra clear communication and quicker supply of key infrastructure like Agglayer.
The proposal has drawn constructive engagement from inside the Polygon ecosystem. Brendan Farmer, Polygon co-founder, reacted to the dialogue, and Polygon Labs CEO Marc Boiron acknowledged the proposal on social media.
The discussion board thread stays open as neighborhood members debate the feasibility of funding validator rewards with out inflation, the sustainability of buybacks and the general influence on community safety.
Associated: Polygon says blocks nonetheless operating regardless of consensus bug disruption
Polygon faces confidence challenges as competitors intensifies
As soon as some of the extremely touted Ethereum scaling options, Polygon constructed its popularity on sturdy technical innovation, from its zkEVM rollout to the bold AggLayer framework designed to unify a number of chains. But regardless of these developments, investor confidence has waned, and competitors from newer layer-2 ecosystems equivalent to Arbitrum, Optimism and Base has intensified.
In 2024, Polygon started migrating its native token from MATIC to POL as a part of a broader governance and tokenomics overhaul meant to reinforce neighborhood participation and safe the community. The transition launched a 2% annual emissions schedule to fund validator rewards and ecosystem incentives.
Regardless of its latest struggles, Polygon retains a robust developer neighborhood, notably amongst builders searching for technical maturity and enterprise-grade infrastructure.
As Cointelegraph not too long ago reported, citing a examine throughout Mexico, Brazil, Peru and Bolivia, Latin American builders proceed to favor Polygon and Ethereum over newer protocols for deploying decentralized functions.
Polygon has additionally doubled down on the tokenization of real-world property (RWAs). In a latest instance, AlloyX, a tokenization infrastructure supplier, launched a tokenized cash market fund on Polygon. This rising RWA exercise has helped gasoline broader onchain engagement, together with a milestone the place Polygon’s NFT gross sales surpassed $2 billion.
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