The Polygon network has implemented Ethereum Improvement Proposal (EIP) 1559, which brings a burning mechanism to the blockchain for its native MATIC token, as well as better fee visibility.
EIP-1559 went live on the Ethereum mainnet in August of last year through the London hard fork. This removed the first-price auction as the main mechanism for transaction fee calculation, instead using a base fee for transactions to be included in the next block and a priority fee for faster processing. The base fee changes based on network congestion and is burned.
The Polygon team has detailed that burning is a “two-step affair that starts on the Polygon network and completes on the Ethereum network,” and that the move does not lower the fees paid for transactions as those are determined by supply and demand.
MATIC is expected to become a deflationary token with EIP-1559, losing 0.27% of its circulating supply every year according to calculations. MATIC has a fixed supply of 10 billion, with 6.8 billion currently in circulation.
Source: https://www.cryptocompare.com/email-updates/daily/2022/jan/18/
