Polygon Foundation CEO Sandeep Nailwal announced Friday that the project will permanently burn 100M POL tokens, pending final approval from the Security Council. The move is part of a deflationary strategy as Polygon's protocol revenue reaches $24.5M year-to-date.
Base fees generated by Polygon transactions are collected in a wallet currently holding 121M POL, valued at approximately $1.2M. The planned 100M token burn would remove roughly 1% of POL's circulating supply from circulation, with manual quarterly burns to follow implementation.
Polygon has repositioned itself as a platform for payments and stablecoin-based transfers. According to the announcement, the protocol's fee generation now exceeds Arbitrum by 3x and Near Protocol by 5x. Protocol revenue has crossed $25M annually, marking a two-year high according to DeFiLlama data.
POL's price increased 10% following the burn announcement. The token rallied 80% during Q3, from $0.07 to $0.11, before consolidating above the $0.09 support level in September. A Friday recovery added 20% to the weekly gain as Bitcoin reclaimed $80,000.
Technical analysis shows the daily RSI had not yet entered overbought territory at the time of announcement, though the ATR indicated low volatility. The $0.11 level represents a significant resistance point, coinciding with the 50-week moving average that blocked the August rally.
Large whale wallets liquidated over 30M POL tokens in the three days following the announcement, potentially limiting upward momentum in the near term.
