MATIC to become deflationary with Polygon's EIP-1559 upgrade
- Ethereum's EIP-1559 introduces a fee-burning mechanism launched on the MATIC network earlier today.
- Proponents have estimated 0.27% of MATIC's supply will be burnt in a year.
- Increased fee visibility on MATIC could reduce spam transactions and network congestion.
- Analysts have predicted that MATIC prices could continue their downtrend until March 2022.
EIP-1559 upgrade is now live on the Polygon network. The upgrade could positively impact MATIC price with burn implementation. Proponents noted that previously the network’s congestion and unpredictable fees drove traders to competitors like Avalanche.
Analysts are bullish on MATIC price as Polygon commences burn
EIP-1559 implementation on the Polygon network was much-anticipated by proponents and traders. As the upgrade commences, 0.27% of MATIC supply could be burned over the span of a year.
Better fee visibility and predictability are expected to increase users and transactions on the Polygon network. Native token MATIC could witness a spike in on-chain activity with reduced network congestion and spam transactions.
In the case of Ethereum, the London hard fork triggered a supply shortage that drove up the altcoin's price. Proponents expect a similar impact on the Polygon network's native token, MATIC.
The MATIC network’s hard fork went live earlier today, at 3 AM UTC.
Nevertheless, MATIC price has posted 10% losses over the past 24 hours. Yet, despite this, analysts are bullish on the Polygon network's native token. @iam_Beast_, a pseudonymous crypto analyst and trader, compared MATIC price trend and FTM, predicting a rally in the token's price.
The analyst has set a target of $2.7 for MATIC price. @Trader_XO, a crypto analyst and investor, holds the contrarian view. The analyst believes that MATIC price could continue its downtrend till March 2022.
Will come back to this end of March...
— Trader XO (@Trader_XO) January 17, 2022
Short on Matic from $2.40 pic.twitter.com/o8s3b0H4XD
Lark Davis, a crypto analyst and YouTuber, commented on MATIC's implementation of EIP-1559. Davis believes that the hard fork is a significant update to the Polygon network.
$matic is pretty quiet considering the big hard fork coming up that will start burning supply!
— Lark Davis (@TheCryptoLark) January 18, 2022
FXStreet analysts believe that the MATIC bear trap could push the price to $2.70.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
