Any party can become a on the Polygon PoS mainnet and share the inflationary network rewards. While the number of validator nodes is capped at 100, anyone (technically) can participate by delegating. Users can set up their own node or lease to a community node. Rewards for staking depend on the amount of MATIC tokens staked and the transactions in the network. As of Q1 2023, there are ~22,300 stakers on the PoS chain.
Polygon allocates 12% of the total supply of 10 billion MATIC tokens to fund these staking rewards with 600,000+ being distributed so far. Validators can set their own commission for accepting delegations. The remaining scheduled validator reward distributions can be seen in the table below.
Staked funds can be slashed and penalized if a validator acts maliciously or is unavailable. Staking on the PoS mainnet currently offers 5.5% APY or ~3% APY when accounting for network inflation. 39.3% (3.9 billion MATIC tokens) of the total MATIC supply is currently staked.
Polygon experienced a dramatic increase in staking participation in Q3 2022 due to the Polygon team pledging MATIC acquired from the 2021 vesting unlock. The MATIC stake increased by ~20% quarter-over-quarter due to this move.
The PoS mainnet has an unbonding period of nine days for unstaking tokens. Users who wish to unstake and opt out would need to send an unbonding request first and delegated tokens will immediately start to unbond. During this unbonding period, the tokens can still be slashed for validator misbehavior. It should also be noted that staked tokens are locked into a contract deployed on the Ethereum blockchain and validators don’t custody their delegate’s tokens.
Fees, Gas, Value Accrual, and Valuation Metrics
MATIC is used within the Polygon ecosystem just as ETH is used in Ethereum: as a gas token. In the most straightforward way, Ether is digital money on the Ethereum network. It’s required when you interact with the network to pay network fees in the form of “gas.”
is the allocative internal pricing mechanism in Polygon used in transactions and can reach high price levels during periods of network congestion. Gas is a derivative of MATIC designed to mitigate spam attacks on the network and efficiently allocate computational resources. Network transactions must have some cost; otherwise, malicious actors could send millions of transactions a day for free, congesting the network.
Users pay different amounts of gas depending on the type of transactions they're looking to execute. The more complex the transaction, the more gas is required. Sending 1 MATIC to a friend (a MATIC transfer) is far simpler (computationally speaking) than minting an NFT. Thus, minting an NFT requires more gas and is more expensive.
Despite doing 5x+ times the amount of transactions of Ethereum and comparable transactions to BNB Chain, Polygon earns 1/100th of ETH fees and 1/20th of what BNB Chain earns per week (in Q1 2023). This can be attributed to Polygon’s incredibly low transactional fees, which, as of 2023, sit around $0.02 per transaction compared to ~$3.50 for Ethereum (second figure).
Exchanges
The MATIC token can be purchased on major centralized exchanges, such as Coinbase, Gemini, Okex, Bittrex, Kraken, Coinlist, and Binance. The MATIC token has a market capitalization of as of 2023 and is available on over 100 exchanges. The MATIC token is also available as an ERC-20 token on the Ethereum network. It's additionally available as a BEP-20 token on the BINANCE Smart Chain, as an SPL token on the Solana blockchain, and on the Moonbeam network.
To read the entire FREE report, click
