EIP-1559 on Polygon

Polygon Improvement Proposals Proposal Ideas
21

Excuse me? Legal and regulatory issues? Sounds to me like you need to give up more ownership of you’re ever worried about this. A truly decentralized network should never have to worry about that. This is more concerning of an issue than what’s even being proposed and I’m amazed you can just bring that up while brushing it under the rug as if it’s a secondary consideration.

Implement the burn, don’t make excuses to pocket money. If you’re worried about going to jail, you own too much of the network. The entire network is constantly at danger if there are ever entities that feel they have enough stake to face legal consequences.

2 Likes
22

It’s important that if burned, the amount burned will still allow the network to be sustainable for the foreseeable future. Polygon would be useless if the tokens are worth 100k each but only a few tokens are left. That being said I say burn them but make sure the burn rate is sustainable so that the network can be utilized for at least a few hundred years and the token price can increase faster for those supporting, promoting and maintaining the network. Allowing a DAO control, where the majority holders consist of a few validators, isn’t fair for the rest of the community.

Also a thought for the amount burned in regards to how long the network could still be used in the future with mass adoption: If a layer 3 and 4 implementation allows for a mass amount of transactions to be verified on polygon for less matic than the same amount on polygon would require then that could allow for more burn and still allow the network to be sustained for a long period of time.

2 Likes
23

The burning of MATIC (which is a fixed supply cryptocurrency) may not be the best move ahead, as it would lead to dramatic scarcity (owing to the amount of activity in the Polygon network), thereby increasing the prices for new token holders, and early adopters get to dump their bags on them. I would say this is a net negative if the ecosystem is to scale.

An alternative, which I propose, is to buyback ETH with a part of the MATIC fees, which can then be burned on the Layer 2 side. This way, the values of EIP-1559 are preserved even in Layer-2 (or sidechain, or what have you). This would make the bond between Polygon and the Ethereum network even stronger.

6 Likes
24

Let’s be honest there are too many short-term-minded Polygon Matic investors who are focused on burning Matic to increase the value of their portfolios and don’t focus on the long-term growth of Polygon. The proposal of transferring the base fee to a DAO governed by the community is great long-term thinking. Polygon Matic has gotten this far by having a big treasury that has allowed it to fund projects and create incentives that have driven users to use Polygon. DAOs are the future of the crypto space and having a treasury that can allow Polygon to bully the competition is important for the long-term survival of this project.

6 Likes
25

I would burn the tokens.

5 Likes
26

They should be burned.

I’m not a supporter of giving the DOA more tokens. Burning them is like giving them to the whole community. Reducing the token supply over time.

7 Likes
27

It should be burned.

6 Likes
28

I want burning of tokens.

5 Likes
29

I’m not in favor of burning. We should focus on growing the network instead.

If we do burn I’m in favor of a soft burn. At this stage, it would be better to improve the value of the network, not just the asset.

I am also in favor of increasing decentralization of the DAO. The network would be stronger if more than two parties have a meaningful stake.

Not sure if we already do this, but we could use quadratic voting on DAO proposals. Another avenue could be to raise the supply cap and make a conscious effort to spread the newly minted tokens among the smaller participants (that already have some stake in the network).

3 Likes
30

From what I read, it seems that holding on to the coins instead of burning them, for future use in developing important community proyect will be the best option. If it doesn’t work we could always come back and change it.

4 Likes
32

Agree 100%

33

I think many are taking the short-term view by wanting to burn the supply. At some point this will have a negative impact on users. As Matic gets more expensive because the circulating supply is reduced, the transaction cost goes up and once the tokens are burned there is no going back.

In the short term, this will be great for investors and as an investor, there is nothing more I would love to see than Matic increase in value, but we have to consider longevity. I personally like the proposal and I think it accomplished a few things:

  1. It locks up supply reducing the circulating amount, which effectively does the same thing as burning the token. It’s the difference between “Market Cap” and “Fully Diluted Market Cap.” Most of us know what this means.

  2. By locking up tokens and not burning them, it gives us options, options we don’t have if we burn them.

  3. Lastly, to Polygon’s point, this allows us to bank these tokens for a rainy day. Again, options. Things change. The Polygon network will change. All of Crypto will change. And for that reason alone, we need to think long term. That means we may need these tokens from maintaining the network to incentivizing our validators. If we don’t, we are asking for trouble.

6 Likes
34

ETH burning is a problem for the Matic network because it has a fixed supply of Matic tokens. If it gets burned per transaction it will eventually reach zero which would require changing the monetary policy of Matic. ETH burning works for Ethereum because there is no fixed supply of ETH.

3 Likes
35

Burn the tokens. Make Matic more scarce.

3 Likes
36

That is true but they also mentioned that the community can vote to burn it or to use it for something else. I don’t see anything bad about this

37

Honestly I don’t get why people keep on stating “burn the tokens”. It can still happen if the community votes for it in the DAO. There is nothing wrong about this proposal because it can adapt to different needs.

38

Based on seeing it work incredibly well in the one project I’ve ever seen implement it as a strategy I’d like to propose an alternative solution to either option, and will clarify my thoughts on a few things first.

To clarify, I personally don’t feel as though 1559 is even necessary to implement on Polygon due to the fact that network fees becoming unmanageable is extremely unlikely to ever happen. If I’m simply wrong and the implementation of 1559 is necessarry to remain directly compatible with Eth as a commit-chain, just ignore this bit.

Assuming that 1559 is mandatory: Burning ETH from transaction fees makes sense as a way to reduce issues caused by MEV and whale gas-wars because these issues make eth un-useable for the average person, and undesirable to new retail investors. At the same time, it doesn’t permanently reduce the supply of Eth as it doesn’t have a hard cap at which no more will ever be produced, so a constant slow burn is sustainable without excluding new users based on an unreasonable entry price and eventually a dead network when no one is willing to keep reducing supply to transact on mainnet; burning transaction fees of $MATIC, especially considering the rate of adoption, could lead to exactly this situation, so I don’t think burning is the solution.

I think that directing fees to a DAO is likely a better option at first glance, but on closer inspection raises a few questions: Who has voting rights in the DAO? If its everyone holding $MATIC, is voting token weighted, making decentralization essentially a facade when considering that validators, whales, and the protocol teams would still have all the control? If voting were 1 vote per holder, regardless of held quantity, I think that it would be a more reasonable option. Ideally (imho) the proposed DAO would adopt Colony’s voting structure, in which the a DAO pays members in its native token for tasks completed that contribute to the improvement or development of the DAO as a whole, or to the project(s) it governs; and the payments reward the payee with reputation, which is used to determine their “vote weight”.

**The solution I think is most beneficial to users, the protocol, and the value of the Matic token : **

The basefee that would be either burned or added to the DAO treasury is instead used to supplement liquidity across leading exchanges and leading token pairs (eg: Sushi , Quickswap , and Dfyn into MATIC/DAI , MATIC/ETH, and MATIC/USDC)
after which the LIQUIDITY TOKENS are burned, or permanently locked within the DAO treasury.

If the LP tokens are burned, it serves a similar purpose in reducing the overall circulating supply of $MATIC, but in doing so also supports and bolsters the token value by creating a permanent liquidity reserve.

If the LP tokens are permanently locked into the DAO; it essentially acheives the same result of a permanent liquidity base that can’t ever be removed and constantly grows as transactions take place, but with the added benefit of the DAO generating revenue to be used in development, grants, etc. by providing a constant influx of LP rewards from transction fees.

1 Like
40

Don’t not add token burning to Matic. Matic has a fixed supply and burning tokens will not help the blockchain in the long run.

3 Likes
41

Take a page from Amazon’s books and give back the fees to the users.
There is no reason for this not to be the solution.

2 Likes
42

Wouldn’t solution 1 essentially be the same as giving transactions fees to the validators, i.e. as is?