Polygon Burns 100 Million POL Tokens as Price Pressure Persists

Polygon, the Ethereum layer-2 scaling network, has permanently burned 100 million $POL tokens, equivalent to roughly 1% of its original supply, yet the token has continued to struggle despite the reduction in circulating supply.

According to market data from CoinGecko, $POL was trading near $0.103 on October 12, down from approximately $0.12 in late September. The token has remained under pressure even as Polygon reported progress in reducing its supply through network-generated fees.

Polygon co-founder Sandeep Nailwal said in an October 11 post on X that the network had burned 100 million $POL approximately two weeks earlier. Another 22 million tokens, representing about 0.2% of the original supply, are lined up for the next burn.

Polygon protocol burnt 100M $POL (~1% of supply) 2 weeks back powered by fees generated on the network Already 22M $POL more(~0.20% of supply) is lined for next stage of burn Plus we haven't disclosed to the fullest extent how Polygon OMS impacts $POL (soon) Last week was 2nd…

— Sandeep | $POL Shiller (@sandeepnailwal) October 11, 2026

The September burn was funded through fees accumulated on the network rather than tokens taken from the Polygon Foundation's treasury. It permanently removed the tokens from supply as part of Polygon's existing feeurning mechanism, modeled on Ethereum's EIP-1559 standard, which destroys base transaction fees rather than directing them to validators.

Nailwal also disclosed that Polygon's Open Money Stack (OMS) had processed more than $1 billion in annualized volume — a figure extrapolated from recent weekly processing — for two consecutive weeks. He suggested that additional details about the payment infrastructure's implications for $POL would be released later.

Why hasn't the burn lifted the price?

The supply reduction arrives alongside an issuance mechanism that continues to introduce new $POL into circulation — a dynamic central to understanding why the burn has not translated into sustained price support.

Under Polygon's original tokenomics framework, $POL was designed with a 2% annual emission rate, divided equally between validator rewards and the community treasury. Based on the initial supply of 10 billion tokens, that mechanism represents approximately 200 million $POL in annual issuance before accounting for compounding and any subsequent governance changes. The 100 million token burn therefore has to be assessed against continuing issuance rather than treated as an equivalent reduction in net annual supply.

Data from POLTRACK's supply and value capture dashboard showed that Polygon recorded approximately 17.45 million $POL in protocol emissions during the 30 days ending October 11, compared with 13.23 million $POL in base fees accumulated toward burning. The figures point to a net supply increase of roughly 4.22 million $POL over that period, before accounting for the timing of separately executed burns — underscoring why token issuance and fee destruction must be weighed together when assessing Polygon's supply changes.

Burns have previously coincided with stronger price performance. In January, $POL rallied as network activity and token burns accelerated, with decentralized exchange trading volumes and transaction fees climbing alongside the recovery. The relationship has not held consistently, however: $POL subsequently surrendered much of those gains even as development of Polygon's payment infrastructure continued.

Market demand is another factor. $POL, which succeeded MATIC as Polygon's native token through a migration launched in 2024, is used to pay transaction fees and support staking within the Polygon ecosystem, but removing tokens through accumulated fees does not create an equivalent amount of new buying activity on exchanges at the time of the burn. The token's recent decline does not establish that the burn had no market impact, since broader cryptocurrency market conditions and exchange trading activity can move prices independently of supply changes.

Can growing payment activity lift $POL demand?

Polygon has increasingly focused on payment infrastructure and stablecoin transfers, with its Open Money Stack designed to support payment processing across both blockchain and traditional financial systems.

The network recently integrated TRON into its Open Money Stack, allowing businesses to manage USDT deposits, wallet services, cross-chain transfers, and fiat payouts through a single integration. The expansion gives businesses access to TRON's established stablecoin infrastructure while using Polygon's payment routing and conversion services.

Polygon has pursued other payment-related developments as well. In May, the network introduced private stablecoin transfers using zero-knowledge proofs to conceal transaction details while retaining compliance checks and audit capabilities.

Payment processing volume, however, does not directly represent revenue earned by the Polygon network. Stablecoin transaction volume measures the value transferred through payment infrastructure, while the burn mechanism depends on fees collected from transactions executed on Polygon. Services operating across multiple blockchains may generate activity without routing every transaction through Polygon or requiring an equivalent amount of $POL for settlement. Nailwal's disclosure of more than $1 billion in annualized OMS processing volume therefore does not establish how much additional $POL demand or fee revenue the infrastructure will generate.

For now, the next measurable development is the proposed burn of another 22 million $POL, roughly 0.2% of the original supply. Nailwal did not specify an execution date, and further details about the Open Money Stack's economic relationship with $POL remain undisclosed.

Source: crypto.news