Technically, there is a possibility of "unmigrating" (as the documentation puts it) POL back into its previous form of MATIC. It therefore follows that POL is a direct representation of MATIC.
POL is the sole medium with which blockspace can be purchased within the Polygon PoS network (i.e., the only medium in which transaction fees are paid).
It means that all ecosystem-wise value-transfer activities (native POL and any tokens or assets) require POL payment for the transaction
[1] = ƒ(blockspaceDemand, feeMarketPressure)
blockspaceDemand — measurement of the computational resources required to process transactions (directly tied to POL's exchange utility)feeMarketPressure — an abstract reflection of the competitive dynamics of transaction fee bidding (a direct value transfer mechanism)Since 2022, Polygon has followed Ethereum in implementing a EIP1559-like base fee burn mechanism. This generates a consistent guaranteed upward deflationary pressure on the value of POL, which somewhat counteracts its base inflationary nature.
[21] = ƒ(token_extant, token_burnt, token_generated)
token_extant — the amount of POL in existencetoken_burnt — the amount of POL burnt in a given timeframetoken_generated — the amount of POL minted in a given timeframeBoth delegation and validator value of POL are unlocked by staking the tokens; Unstaking is associated with a cooldown period of 80 checkpoints (on average equal to 40 hours). Moreover, both delegators and validators are subject to slashing in case of validator misbehaviour. Presently, the minimal validator self-stake is 10,000 POL, but it can be increased to 100,000 POL if PIP-70 passes.
[7] = ƒ(staking_period, amount_staked, price_at_staking)
staking_period — the duration of the lock-up periodamount_staked — the amount of tokens locked up by the userprice_at_staking — the price of the locked token position at the moment of locking; defines the locked value together with the lockedOnce a validator is included in the active set (presently 105 validators at most), he must also participate in the consensus, both to avoid being slashed (i.e., penalised in terms of partial stake alienation) and to qualify for remuneration.
[81] = binary
Reflects rewards earned by validators. When a validator performs his duties correctly, he is eligible to receive staking rewards taken from a yearly reward allocation pool. In addition, a Bor block producer is given a certain percentage of the transaction fees collected in each block. The selection of producers for any given span is also dependent on the validator’s ratio in the overall stake. The remaining transaction fees flow through the same funnel as the rewards which get shared among all validators working at the Heimdall layer.
[22] = ƒ([81], tx_fee_income, consensus_reward_parameters, MEV)
tx_fee_income — the variable transaction fee income of a validatorMEV — validator income due to MEVconsensus_reward_parameters — the parameters of the consensus reward emissionsPolygon has inbuilt delegation mechanisms for POL. Any staker may delegate to a validator for a share of rewards.
[82] = binary
Delegators receive a proportional share of rewards accrued by their delegatees.
[23] = ƒ([82], validator_income, stake_share)
validator_income — income of the delegateestake_share — share of the delegator in the delegatee's stakeReflects the value originating from participating in decicision-making in the Giza Governance. The scope of governance is not formally limited in theory.
[31] = ƒ([83], user_vote_allocations, user_strategy_representation)
user_vote_allocations — is the representation of allocations of votes by the user during the votinguser_strategy_representation — is the representation of the user's governance outcome preferencesRepresents participation in the Polygon community governance process
[83] = Binary
Reflects delegation of voting power within the framework of Polygon.
[84] = Binary
Represents extraction of tangible and/or intangible governance value derived from voting power delegation, i.e., the realisation of indirect governance participation.
[32] = ƒ([84], delegate_vote_allocations, user_strategy_representation)
delegate_vote_allocations — is the representation of allocations of votes by the user's delegate during the votinguser_strategy_representation — is the representation of the user's governance outcome preferences