Polygon is prepping for the next crypto market bull cycle with an aggressive POL deflationary plan. In a post on X on Friday, Polygon Foundation CEO Sandeep Nailwal announced the project will permanently burn 100M POL tokens, citing impressive protocol revenue.
Polygon is printing revenue. $24.5m YTD. We are deploying a change that lets anyone in the community trigger its burn.
Nailwal noted the proposal is now awaiting the final Security Council sign-off to be implemented. Following the same, there will be manual quarterly burns.
Polygons base fees add POL to its collector wallet.
According to Nailwal, the collector currently holds 121M POL, worth about $1.2M. If the 100M tokens are burnt as planned, that will remove 1% of POL circulating supply from the market.
Will Polygon‘s burns boost POL’s value？
Polygon has aggressively repositioned itself for payments, especially stablecoin-based transfers. According to Nailwal, the traction and the generated fees are now 3x that of Arbitrum and 5x that of Near Protocol.
In fact, according to DeFiLlama, Polygons collected annual revenue crossed $25M too, marking a two-year high.
Source: DeFiLlama
Whether the traction will hold steady in the coming months and fuel POLs burn rates remains to be seen though.
In the meantime, POLs price surged by 10% on the 100M token burn update. The altcoin had initially rallied +80% from $0.07 to $0.11 in Q3, before a sharp pullback in late August. It spent September consolidating above the $0.09 support (which doubles as the 200-day Moving Average, blue).
The Friday pump was part of the tokens weekly 20% recovery gain as Bitcoin reclaimed $80K. The 100M token update also boosted the move.
Source: POL/USDT, TradingView
There may still be room for POLs recovery to extend because the daily RSI was yet to hit overbought territory at press time. However, the ATR (Average True Range) was flat, signaling low volatility.
This implied that a strong breakout above $0.11 might remain elusive in the short term. Here, its also worth pointing out that the $0.11-level was also the 50-week Moving Average (MA) that blocked the explosive August rally.
Source: Santiment
Interestingly, key whale wallets dumped over 30M POL in the last three days, which could further stall the rally as the sell-off persists.
If POL stalls again at the dynamic resistance (near $0.11), a retest of the $0.09-support could not be ruled out. On the contrary, clearing the $0.11 overheld hurdle may mark the next leg of its recovery.