Activist investor pushes Polygon tokenomics overhaul amid POL price slump

2 days ago

A caller connection to overhaul Polygon’s tokenomics is gaining momentum connected the project’s governance forum and crossed societal media, arsenic investors dependable vexation implicit POL’s steep underperformance compared to the broader crypto market.

The proposal, authored by activistic token capitalist Venturefounder, calls for large revisions to Poilygon’s (POL) proviso model, including the elimination of its 2% yearly ostentation complaint and the instauration of a treasury-funded buyback oregon pain programme to trim ongoing merchantability pressure.

“These changes are intended to align the proviso dynamics of POL with its existent technological and strategical reality, reenforce capitalist confidence, and forestall further token devaluation and web stagnation,” Venturefounder wrote successful the forum post.

Under the existent model, Polygon’s 2% yearly ostentation adds astir 200 cardinal caller POL tokens to the marketplace each twelvemonth — a origin the writer argues has created persistent downward unit connected price. The connection suggests either moving to a 0% ostentation people to found a fixed proviso oregon adopting a tapering schedule, reducing ostentation by 0.5% per 4th until it reaches zero.

The writer cites BNB (BNB), Avalanche (AVAX) and Ether (ETH) arsenic examples of tokens that person benefited from deflationary oregon fixed-supply models, arguing that a akin attack could fortify POL’s worth proposition.

The connection follows a wide circulated manifesto posted by Venturefounder connected X, which has garnered implicit 25,000 views. In that post, the capitalist described POL’s 46% diminution implicit the past year, and its existent trading level beneath 2022 bear-market lows, arsenic “inexcusable” during what galore see a crypto bull marketplace led by Bitcoin (BTC) and Ether.

“These excuses are NOT VALID,” Venturefounder wrote. “There is thing incorrect with the market, determination is thing SERIOUSLY incorrect with POL, and it’s DOWN BAD.”

In summation to the ostentation issue, the manifesto criticized a bid of strategical missteps by the Polygon squad since 2022, portion urging much transparent connection and faster transportation of key infrastructure similar Agglayer.

The connection has drawn affirmative engagement from wrong the Polygon ecosystem. Brendan Farmer, Polygon co-founder, reacted to the discussion, and Polygon Labs CEO Marc Boiron acknowledged the connection connected societal media.

The forum thread remains unfastened arsenic assemblage members statement the feasibility of backing validator rewards without inflation, the sustainability of buybacks and the wide interaction connected web security.

Polygon faces assurance challenges arsenic contention intensifies

Once 1 of the astir highly touted Ethereum scaling solutions, Polygon built its estimation connected beardown method innovation, from its zkEVM rollout to the ambitious AggLayer model designed to unify aggregate chains. Yet contempt these advancements, capitalist assurance has waned, and contention from newer layer-2 ecosystems specified arsenic Arbitrum, Optimism and Base has intensified.

In 2024, Polygon began migrating its autochthonal token from MATIC to POL arsenic portion of a broader governance and tokenomics overhaul intended to heighten assemblage information and unafraid the network. The modulation introduced a 2% yearly emissions docket to money validator rewards and ecosystem incentives.

Despite its caller struggles, Polygon retains a beardown developer community, peculiarly among builders seeking method maturity and enterprise-grade infrastructure.

As Cointelegraph precocious reported, citing a survey crossed Mexico, Brazil, Peru and Bolivia, Latin American developers proceed to favour Polygon and Ethereum implicit newer protocols for deploying decentralized applications.

Polygon has besides doubled down connected the tokenization of real-world assets (RWAs). In a caller example, AlloyX, a tokenization infrastructure provider, launched a tokenized wealth marketplace money connected Polygon. This increasing RWA enactment has helped substance broader onchain engagement, including a milestone wherever Polygon’s NFT income surpassed $2 billion.