Polygon's native token, POL, is experiencing a significant shift in its supply dynamics, entering what its leadership calls an "S-curve" phase driven by on-chain activity. Network data from early January 2026 reveals that approximately 1 million POL tokens are being burned daily through base fees, a trend sustained over a 3-4 day period. This burn mechanism is automatic, permanently removing POL from circulation with each transaction.
Polygon CEO Sandeep Nailwal highlighted the scale of this deflationary pressure, stating that if the current burn rate continues for a full year, it would amount to 3.5% of POL's total supply being destroyed annually. This burn activity is directly linked to a sharp increase in network usage, with daily transaction counts stabilizing above 5 million and occasional spikes to 7 million. The network processed a record 1.4 billion transactions in 2025.
Concurrently, a substantial portion of the supply remains locked. Data shows around 3.6 billion POL is staked across the network, supporting security while being unavailable for trading. Stakers and validators earn a combined annual reward of about 1.5%, which is lower than the projected burn rate, creating a net deflationary effect on the circulating supply.
This surge in on-chain activity has translated into a 425% increase in the network's daily fees and revenue over the past three months, reaching approximately $115,000. Market analysts are closely watching these usage-driven supply changes, noting that POL's price has responded positively, rising 21% from $0.09 to $0.127 over the past week, with a 4.67% daily gain at the time of reporting.
