Ethereum EIP-1559 upgrade launches on Polygon to burn MATIC

The Ethereum upgrade, which introduced a partial network fee-burning mechanism in August 2013, has been launched on the layer two scaling network Polygon.

The EIP-1559 upgrade to Ethereum shipped last summer with the London hard fork. It has proven to be a success in terms both of gas price predictability, and network fee burning. In an effort to increase “fee visibility”, the upgrade was launched on Polygon, a layer-two scaling network. It was live at block 23850000 about an hour ago.

After its successful deployment on the Mumbai testnet, the Polygon team announced that the upgrade date was Jan. 17.

EIP-1559 upgrades introduce the same fee-burning mechanism as Polygon, resulting in the destruction MATIC tokens. It also eliminates the first-price auction method of calculating network fees, which results in better cost estimations, but does not lower gas prices.

“The burning” is a two-step process that begins on the Polygon network, and ends on the Ethereum network.

According to estimates, 0.27% of MATIC’s total supply will be burned each year. This is similar to Ethereum. MATIC tokens have a fixed supply at 10 billion. 6.8 billion are currently in circulation.

It stated that deflationary pressure would benefit validators and delegators as their rewards for processing transactions are denominated by MATIC.

Polygon, despite being a layer-2 network, has been experiencing its own gas crisis. According to Dune Analytics, Polygon gas prices soared earlier this month and some validators were unable to submit blocks. Sunflower Land, a DeFi yield farming game that rewarded early adopters of the game before degens lost their interest, was responsible for the surge in demand.

Related:How Polygon challenges the limitations of Ethereum

According to the burn tracker, 1.54 million ETH have been burned since Ethereum went live six months ago. This works out to be around $5 billion at current ETH prices. The tracker predicts that Ethereum issuance could fall by 2.5% per annum once “the merger” occurs and proof-of stake becomes the primary consensus mechanism.

According to CoinGecko, MATIC prices dropped 9% in the last day and fell to $2.22 as of the writing.

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