What is Polygon Ecosystem Token (POL)

1. Project Introduction

1. What Is Polygon?

Polygon is a decentralized Ethereum scaling solution that enables developers to build scalable and user-friendly dApps at low transaction costs without compromising security. The platform was originally launched in 2017 under the name Matic Network, and in 2021 it was rebranded to Polygon. On September 4, 2024, the network underwent a token migration from MATIC to POL, making POL the unified native token for the Polygon ecosystem. POL now serves as the gas, staking and governance token across the Polygon PoS chain and, in the future, across AggLayer and other Polygon chains. The introduction of POL marks the beginning of the Polygon 2.0 era.

2. How Does Polygon Work?

The primary components of Polygon include:

1) Agglayer: It is a cross-chain settlement layer that connects the liquidity and users across any blockchain to enable fast, low-cost interoperability and growth. Agglayer tackles blockchain fragmentation via a complex, multi-component architecture. Rather than simply building a bridge between chains, Agglayer establishes a unified interoperability protocol to enable seamless cross-chain operations just like single-chain transactions. Its features include: 1> Unified liquidity, not wrapped assets: Traditional bridges create wrapped versions of assets (e.g. WETH or bridged USDC). However, Agglayer enables true unified liquidity. Specifically, ETH held on Ethereum and ETH used on Polygon are the same native asset. There is no need for wrapping, no bridging delays and fragmented liquidity pools. 2> Atomic cross-chain transactions: With Agglayer, users can execute complex operations across multiple chains in a single transaction. 3> Mathematical security guarantees: Agglayer does not rely on trusted validators or multi-signature schemes; instead, it uses mathematical proofs to ensure safety.

2) Polygon PoS: It is an EVM-compatible Proof-of-Stake sidechain with high throughput and low costs. Based on PoS consensus mechanism, Polygon PoS consists of a consensus layer called Heimdall-v2 and an execution layer called Bor. Nodes on Polygon adopt a two-layer implementation represented by Bor (the block producer layer) and Heimdall-v2 (the validator layer). The architecture of the Polygon PoS chain can be roughly divided into three layers: Ethereum layer, Heimdall layer and Bor layer. 1> Ethereum layer: a set of contracts on the Ethereum mainnet. 2> Heimdall layer: It is the PoS validator layer. The validators in the Heimdall layer run in parallel with the Ethereum mainnet, ensuring real-time monitoring of the staking contracts deployed on Ethereum. In addition, Heimdall is responsible for periodically publishing state snapshots of blocks produced by the Bor layer on Ethereum. 3> Bor layer: It is the block producer layer. Block producers are selected by Heimdall-v2 and are responsible for packaging transactions and generating blocks.

3) Polygon CDK: It is a multi-stack toolkit for building custom Layer-2 chains that are natively connected to Agglayer. CDK‘s’ multi-stack design gives users great flexibility. For example, users can choose between the CDK OP Stack, the most widely adopted on Ethereum, for a familiar setup or cdk-erigon for more customization. It is purposefully designed for Ethereum developers and fully compatible with EVM. It also offers seamless Web3 connectivity by connecting users’ L2s to Agglayer by default to enable cross-chain sharing of liquidity and state.

4) Miden: It is an edge blockchain developed by Polygon to enable applications to scale via both public and private transactions. Through edge execution and self-custodied state control, users could have full control over their data and transaction details. Miden leverages Rust and built-in account abstraction for secure smart-contract development, while minimizing the attack surface by using native asset storage for user accounts.

3. Who Founded Polygon?

1) Sandeep Nailwal: Co-founder of Polygon and now CEO of the Polygon Foundation. Sandeep began his career as a software engineer and in 2015 launched India’s largest professional services marketplace, ScopeWeaver, where he designed blockchain-based decentralized application architectures. Before that, he worked in the technology department of Asia’s largest textile company, Welspun, and as an advisor at Deloitte.  In 2017, he co-founded Polygon with Jaynti Kanani and Anurag Arjun.

2) Marc Boiron: CEO of Polygon Labs. He previously served as Chief Legal Officer at dYdX, overseeing all legal affairs. Before joining dYdX, he was a partner in the blockchain, cryptocurrency, and financial services divisions at Manatt, Phelps & Phillips, LLP. He is also a Doctor of Juridical Science from Pennsylvania State University.

3) Mudit Gupta: CTO of Polygon. He previously worked at SushiSwap and Polymath.

Funding (according to publicly available information):

On February 7, 2022, Polygon completed a $450 million funding round led by Sequoia Capital India. Other participants included Tiger Global, SoftBank Vision Fund 2, Galaxy Digital, Republic Capital, Makers Fund, Alameda Research, Alan Howard, Alexis Ohanian, Steadview Capital, Elevation Capital, Animoca Brands, Spartan Fund, Dragonfly Capital, Variant Fund, and Kevin O’Leary. This funding will support Polygon's efforts to expand its suite of Ethereum scaling solutions and attract a larger developer ecosystem.

On May 26, 2021, Polygon received investments from Galaxy Interactive and Mark Cuban.

On April 30, 2019, Polygon secured seed funding from Coinbase Ventures.

On April 25, 2019, Polygon raised $5 million through an Initial Exchange Offering (IEO).

4. Polygon Tokenomics

The POL token is the native token of the Polygon network, transitioning from MATIC in 2024. The initial supply is 10 billion tokens with an annual inflation rate of 2%. The newly issued tokens will be distributed to validators as staking rewards and allocated to the community treasury to support ecosystem development and innovation. As of September 2025, the total supply has reached approximately 1.05 billion tokens with the remaining supply to be gradually released through annual emissions.

5. Token Utility

POL is the native token of Polygon, enabling users to interact with tens of thousands of dApps across Polygon blockchains. Users can also stake POL to contribute to the network security.

1) Gas Token: When users conduct transactions or utilize applications built on Polygon PoS, they jsut need to pay a small gas fee in POL. This incentivizes validators to process and verify transactions, ensuring the network's functionality and security.

2) Network Security: Polygon employs a Proof-of-Stake (PoS) mechanism, utilizing staked POL to achieve consensus across the network. By staking POL, users contribute to securing Polygon PoS and earn rewards.

3) Governance: Validators play a crucial role in Polygon PoS by implementing Polygon Improvement Proposals (PIPs) and contributing to the decentralization of the network, ensuring its evolution based on community consensus.

4) Community Fuel: POL drives sustainability through its unique emission model with a portion of emissions allocated to fund community-driven initiatives.

5) High-Efficiency Token: POL introduces the concept of a "hyperproductive token", enabling validators to secure multiple chains and perform various roles within the Polygon blockchain aggregation network.​