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Polygon Increases POL Staking Rate to 8% for Two Months Starting October 1
Polygon has announced a significant increase in the staking rewards for its POL token, raising the annualized gross rewards to approximately 7.7% from the current baseline of about 3%. This change will take effect on October 1 and will last for two months, reverting to the baseline rate on December 1. The increase is made possible through a governance proposal known as PIP-92, which reallocates over 27 million POL tokens from accumulated network fees into the staking rewards for validators and delegators without minting new tokens.
The proposal, confirmed on September 28, directs approximately 27.33 million POL tokens, sourced from priority fees accumulated under a previous proposal, into the existing staking reward mechanism on Polygon's proof-of-stake network. This adjustment will increase the CHECKPOINT_REWARD parameter from around 25,213 POL to 64,500 POL at each checkpoint, resulting in nearly a 2.6-fold increase in payouts during the two-month period. With around 3.45 billion POL currently staked, this distribution translates to the estimated 7.7% annualized rate, although individual returns will vary based on validator commission rates.
In a related move, Polygon executed a burn of approximately 100 million POL tokens on September 24, reducing the total token supply by about 1%. The distribution of the 27.33 million POL tokens as additional rewards is funded entirely by fees already collected, ensuring no new tokens are minted and no inflation is introduced. Looking ahead, a follow-up proposal, PIP-93, aims to automate the distribution of fees to stakers, potentially allowing for consistent rewards tied directly to network revenue.
Source: KLEA News