POL Rallies 50% in Seven Days as Polygon Targets Higher Yields
Polygon's POL token extended its August rally on Monday as co-founder Sandeep Nailwal previewed a staking and tokenomics overhaul designed to direct more of the network's economic activity toward token holders.
Summary:
- Polygon is preparing a major overhaul of POL staking and tokenomics.
- Priority fees would provide stakers with returns tied to network usage.
- Native staking could operate alongside Polygon’s existing Ethereum-based system.
- POL remains above its major moving averages after a sharp August rally.
The proposal is still being developed and requires community approval, but it arrives as Polygon reports stronger revenue and pushes deeper into payments infrastructure.
Thanks to Polygon community's vocal demand, the team has been working on a staking and tokenomics overhaul proposal. I just saw it and I can't stop myself from sharing some sneak peeks.
We delivered 10x growth this year in revenue. We delivered 5k tps, we delivered 25% reduction…
— Sandeep | CEO, Polygon Foundation (※,※) (@sandeepnailwal) August 22, 2026
Polygon Wants Network Fees to Reach POL Stakers
The central change is straightforward: Polygon wants a larger share of the economic value generated by transactions to reach the people staking POL.
Nailwal said the team is developing an L1-like native staking mechanism on Polygon PoS that would operate alongside the existing Ethereum-based staking system. Polygon Labs will develop the code before submitting the proposal to the community forum.
The planned structure builds on work already approved through PIP-85.
Under that proposal, Polygon changed how priority fees are allocated, creating a separate pool for stakers. PIP-85 set the staker fee share at 50% and called for distributions through Merkle-based claimers. Any priority fees remaining after the prescribed calculation are directed to a burn address.
Nailwal now argues that implementing fee sharing through native Polygon staking could make the process cleaner than relying exclusively on Ethereum.
The broader objective is to shift staking economics toward revenue generated by actual network usage, rather than relying predominantly on token issuance to compensate participants.
According to Nailwal, the proposed changes could nearly double POL staking yields. That estimate remains a projection tied to the forthcoming design, not a guaranteed return.
What Polygon Is Proposing for POL
- Native Polygon PoS staking: A new L1-style staking mechanism would run alongside Ethereum staking.
- Priority-fee rewards: Fees generated by transactions would flow toward POL stakers, expanding the role of network revenue in staking returns.
- Higher staking yields: Nailwal expects the redesigned economics to nearly double yields, largely through fee income rather than additional inflation.
- Gas incentives: Staking POL is expected to provide additional benefits, including discounts on transaction fees.
- More utility for sPOL: Polygon wants its liquid staking token to become more useful as collateral and productive capital across DeFi.
- Community approval: Polygon Labs will develop the implementation, but the changes still need to pass through Polygon’s governance process.
Why Native Staking Could Change POL’s Economics
The distinction between inflation-funded and fee-funded rewards matters.
When staking rewards primarily come from newly issued tokens, existing holders effectively finance those rewards through supply expansion. Transaction-fee rewards work differently. They connect part of the return earned by stakers to demand for blockspace.
Higher network activity generates more fees. A mechanism that redirects those fees to stakers can therefore make POL’s staking economics more sensitive to actual usage.
Polygon has already been moving in this direction.
PIP-85 said priority fees had risen 10-fold since the introduction of the PIP-65 system. More than 5.4 million POL was distributed to validators during February alone, prompting Polygon to redesign the formula so delegators could receive a share.
Polygon’s subsequent PIP-87 proposal went further by connecting payments activity with token economics. Under that design, fiat revenue collected from eligible payment companies can be converted into stablecoins, with POL bought on the market for distribution to stakers and for burning.
That gives the proposed staking overhaul a broader significance. Polygon is attempting to connect three parts of its strategy: transaction growth, payments revenue and POL ownership.
sPOL Could Turn Staked POL Into Productive DeFi Capital
The proposal also gives Polygon’s native liquid staking token, sPOL, a larger role.
Polygon launched sPOL in April to address a liquidity problem created by the billions of POL already committed to staking. At the time, more than 3.6 billion POL was staked, while Polygon estimated that only around 4% to 5% of that capital was liquid.
sPOL allows holders to maintain staking exposure while using a liquid representation of their position elsewhere in DeFi.
READ MORE: Phantom Drops Sui as an 82% DeFi Retreat Tests the Network
That becomes more attractive if the underlying staking yield rises.
A higher-yielding sPOL could potentially be used as collateral, supplied to lending markets or deployed in liquidity strategies without requiring holders to fully give up staking returns. Polygon seeded the system with 10 million POL from its treasury and said another 90 million would progressively follow.
The mechanism creates another consideration, however. Higher headline staking yields only become economically stronger if they come from sustainable transaction revenue. That makes Polygon’s ability to expand real network usage central to the proposal.
Payments Growth Is Becoming Part of the POL Investment Case
Nailwal said Polygon’s revenue has increased 10 times this year, while network throughput has reached 5,000 transactions per second and block times have fallen by 25%. The team is targeting block times below one second.
Recent commercial activity provides some context for that strategy.
Frax said last week that it is using Polygon to settle foreign-exchange markets built around its frxUSD stablecoin, including pairs linked to the Brazilian real, Korean won, Australian dollar and Indonesian rupiah. Polygon said the system currently covers more than six global stablecoin FX pools with near-instant settlement.
That type of activity matters more under a fee-linked staking model. If payment volumes translate into transaction and priority fees, increased commercial usage can feed directly into staking economics rather than existing only as an ecosystem growth metric.
The relationship is not automatic. Investors will need to distinguish transaction volume from actual fee generation and, eventually, from the amount of revenue distributed to POL stakers.
POL Extends 50% Weekly Rally as Price Tests $0.12
POL has gained roughly 50% over the past seven days, extending one of its strongest short-term advances in recent months as the token trades around $0.1148.
Price remains comfortably above all four major moving averages shown on the chart:
- 20-period SMA: $0.1040
- 50-period SMA: $0.0893
- 100-period SMA: $0.08238
- 200-period SMA: $0.07846
The structure remains bullish, but the size of the weekly advance makes the next resistance test increasingly important. POL is approaching the $0.115 to $0.12 area, where the previous surge encountered selling pressure.
Momentum is also becoming stretched. The 14-period RSI stands near 73, above the conventional overbought threshold. That does not necessarily signal an immediate reversal, but after a 50% weekly gain it raises the probability of consolidation or sharper intraday volatility if buyers struggle to clear $0.12.
On the downside, the rising 20-period SMA near $0.104 provides the first technical support, followed by the psychological $0.10 level. Holding those areas would preserve much of the structure created during the seven-day rally.
The Proposal Now Has to Turn Into Executable Tokenomics
The next important development is not another price target but the publication of Polygon’s full staking proposal.
Investors still need details on how native and Ethereum-based staking will coexist, how fee discounts will work, how rewards will flow into sPOL and whether the projected increase in staking yield remains achievable once the final parameters are published.
PIP-85 provides a foundation, but the latest plan appears broader than the existing fee-sharing framework. Until Polygon Labs publishes the code and governance proposal, the near-doubling of staking yields should be treated as Nailwal’s preview of the intended economics rather than a finalized protocol parameter.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Kosta Gushterov
Reporter at CoinsPress
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
