Polygon allocates $250 million to open payment infrastructure layout, POL deflation initiates the "Year of Rebirth"

Once defined as an “Ethereum sidechain solution,” Polygon is now thoroughly rewriting its own narrative. As Polygon co-founder Sandeep Nailwal declares 2026 as the “Year of Rebirth” for POL, this scaling ecosystem is embarking on a multi-dimensional strategic shift—from purely technical scalability to a dual-driven approach centered on payments and tokenization. Within a week of the announcement, the POL token price surged over 30%, with the latest data showing a trading price of $0.14 and a 24-hour increase of +4.13%.

Through acquisitions of Coinme and Sequence, as well as unveiling a new technical roadmap, Polygon is materializing an ambitious vision: to become the “underlying layer” for global payments and tokenization markets. This is not just a product iteration but a fundamental redefinition of ecosystem entry points and infrastructure.

Major acquisitions connect on-chain cash flow, with full-spectrum deployment from devices, channels to licenses

Polygon is adopting a highly aggressive strategy, directly penetrating the traditional financial world.

On January 13, Polygon Labs announced the completion of acquisitions of Coinme and Sequence, with a total transaction value exceeding $250 million. The true value of this deal goes far beyond the surface asset transfer.

Coinme focuses on cash and crypto asset exchanges, operating a network of crypto ATMs across 49 US states and thousands of retail outlets (such as Kroger supermarkets). Sequence provides on-chain infrastructure services, including crypto wallets and related products. Polygon Labs CEO Marc Boiron and Sandeep Nailwal stated that this acquisition is a core part of their stablecoin and payment strategy, aimed at strengthening infrastructure deployment.

This move signifies Polygon’s critical leap from a “smart contract platform” to “physical financial infrastructure.”

Coinme is one of the earliest licensed Bitcoin ATM operators in the US. Its most valuable asset is not the ATM hardware itself but the comprehensive compliance framework behind it—including nationwide retail partnerships and essential licenses such as Money Transfer Licenses (MTL).

In other words, Polygon is acquiring a “cash entry channel.” For users without bank accounts or those unfamiliar with centralized exchanges, Coinme’s ATMs provide a direct route to convert cash into on-chain assets (stablecoins or POL tokens) at supermarket checkout counters. This is both a technological innovation and a compliance barrier—creating a high threshold that competitors find difficult to replicate.

Despite some regulatory adjustments faced by Coinme (such as issues in Washington State), for Polygon, this remains the optimal solution to unlock physical liquidity. Sandeep Nailwal openly admits that this move will enable Polygon Labs to compete head-on with Stripe. Over the past year, Stripe has acquired stablecoin and crypto wallet startups and developed its own public chain tailored for payments. Polygon’s acquisition signals an attempt to restructure and scale through mergers, aiming to reach the same level as traditional fintech giants.

Technological breakthroughs usher in a new era of performance, evolving from 5,000 to 100,000 TPS

The outcome of the payment war ultimately depends on whether the underlying technology can support it. The TPS (transactions per second) roadmap revealed by Sandeep Nailwal reflects Polygon’s goal: to bring blockchain execution efficiency to the level of traditional networks.

Recently, Polygon completed the Madhugiri hard fork upgrade, which initially increased on-chain TPS by 40%, reaching 1,400 transactions/sec. But this is just the beginning.

The first phase aims to reach 5,000 TPS within six months, solving PoS chain congestion during peak transaction periods and enabling Polygon to handle global retail payments. The second phase is more aggressive—targeting 100,000 TPS within 12 to 24 months, allowing Polygon to process Visa-level transaction density.

Achieving this leap depends on two major technological pillars:

First is the Rio upgrade, which introduces stateless validation and recursive proofs, reducing finality time from minutes to about 5 seconds and eliminating chain reorganization risks. Second is AggLayer (Aggregation Layer), which uses ZK proofs to enable multi-chain liquidity sharing, making 100,000 TPS not just a burden for a single chain but a distributed effort across the entire Polygon network.

In this sense, Polygon is not just transforming a single chain but building a federation—a seamlessly compatible, dynamically scalable distributed payment alliance.

Backed by three fintech giants, payment applications penetrate daily consumption

Once the entry and throughput channels are in place, payments naturally become a logical next step. Polygon is deepening its integration with global fintech giants, positioning itself as the technological backbone of the worldwide payment network.

Revolut’s full integration is the most direct example. As Europe’s largest digital bank with 65 million users, Revolut has integrated Polygon as its primary infrastructure for crypto payments, staking, and trading. Revolut users can directly perform low-cost stablecoin transfers and stake POL tokens via the Polygon network. By the end of 2025, Revolut’s cumulative transaction volume on Polygon is approaching $900 million, showing steady growth.

Flutterwave’s settlement bridge reflects Polygon’s penetration into cross-border payments. As an African payments giant, Flutterwave chose Polygon as its default public chain for cross-border settlements, focusing on stablecoin transactions. Given the high costs of traditional remittances in Africa, Polygon’s low fees and fast settlement offer better solutions for local drivers’ payments and trade collaborations with platforms like Uber.

Mastercard’s identity solution demonstrates Polygon’s innovation at the payment experience layer. Mastercard uses Polygon to power the “Mastercard Crypto Credential” identity scheme, introducing verified user names for self-custodial wallets, significantly lowering usage barriers and transfer risks, and enhancing overall payment experience.

Polygon is gradually establishing roots in daily consumption scenarios. Dune Analytics shows that by the end of 2025, small-value transactions on Polygon (single transactions of $10–$100) approached 900,000, reaching a record high and increasing over 30% since November. This transaction range overlaps heavily with everyday credit card spending. Leon Waidmann, head of Onchain research, points out that Polygon is gradually becoming a primary gateway for payments and PayFi (payment finance).

Institutional capital floods into the tokenization track, BlackRock’s $500 million bet signals confidence

If payments are Polygon’s user traffic entry point, then tokenization is its foundation as an institutional-grade infrastructure.

In the RWA (Real-World Asset) distribution space, Polygon has become the preferred testing ground for top global asset management firms. Its low interaction costs and seamless compatibility with the Ethereum ecosystem give Polygon a clear advantage in migrating traditional financial assets onto blockchain.

In October 2025, the world’s largest asset manager, BlackRock, deployed approximately $500 million of assets on Polygon through its BUIDL tokenization fund. This move is the highest-level endorsement of Polygon 2.0’s security architecture and signals a large-scale influx of institutional funds, further boosting Polygon’s TVL and liquidity depth.

AlloyX’s Real Yield Token (RYT) launched on Polygon exemplifies the integration of traditional finance and DeFi. This fund invests in short-term, low-risk instruments like US Treasuries, supporting a looping leverage strategy—investors can use RYT as collateral in DeFi protocols to borrow and reinvest, amplifying yields.

Germany’s NRW.BANK issued digital bonds on Polygon, representing a major regulatory breakthrough. Operating under Germany’s eWpG (Electronic Securities Act), this bond demonstrates Polygon’s capability to issue not only standard tokens but also compliant assets under strict regulatory frameworks.

POL deflation accelerates, a new logic for token value capture

From MATIC to POL, it’s not just a token symbol change but a comprehensive overhaul of economic logic.

Since early 2026, Polygon has accumulated over $1.7 million in on-chain transaction fees and burned more than 12.5 million POL tokens (about $150,000). Castle Labs notes that the main driver of fee surges is Polymarket’s 15-minute prediction market fee feature, generating over $100,000 in daily revenue for Polygon.

More notably, the Polygon PoS network has recorded a single-day burn of 3 million POL, about 0.03% of the total supply. This is not accidental but a natural result of entering high-frequency usage stages.

According to the EIP-1559 mechanism, when network utilization remains above 50% over the long term, gas fees enter a rapid escalation phase. Currently, Polygon’s daily burn rate stabilizes around 1 million POL, with an annualized burn rate of approximately 3.5%, more than double its staking annual yield (~1.5%).

This means that through on-chain activity alone, POL’s circulating supply is being “physically” reduced at a significant pace. This high-density value capture is a key engine supporting Sandeep Nailwal’s concept of “token rebirth.”

Moat and challenges coexist: four risks before rebirth

Despite Polygon’s seemingly bright outlook, four major challenges remain:

Regulatory double-edged sword. While acquiring Coinme secured licenses, it also exposes Polygon directly to US state-level regulation. If issues with Coinme’s compliance history escalate, it could impact POL’s 2026 “rebirth” plan.

Fragmentation of technical architecture. Polygon 2.0 encompasses multiple complex modules—PoS, zkEVM, AggLayer, Miden. While more powerful, maintaining such a large and diverse ecosystem poses high engineering and security risks. Especially, vulnerabilities in AggLayer’s cross-chain interactions could trigger systemic crises.

Intense competition in the public chain market. Base, backed by Coinbase, has gained significant user growth, encroaching on Polygon’s market share in community and payments. High-performance L1s like Solana still hold advantages in speed and developer experience, and Polygon’s 100,000 TPS target remains to be validated over time.

Financial sustainability concerns. Token Terminal data shows Polygon posted a net loss of over $26 million in the past year, with fee income insufficient to cover validator costs. This reliance on ecosystem incentives indicates it is still in a “burn-to-market” phase. Even if it turns profitable by 2026, the sustainability of its revenue-generating capacity remains uncertain.

Polygon is no longer content with being just an “Ethereum plugin.” Its 2026 transformation roadmap is clear: break performance bottlenecks through technological scalability, lower entry barriers via investments and acquisitions, gain credibility through top-tier institutional backing, and strengthen user engagement through high-frequency scenarios.

As the “Year of Rebirth” in 2026, the milestone will not only be POL token price fluctuations but also Polygon’s profound metamorphosis into a global payment and tokenization infrastructure. For investors, tracking the progress of Polygon 2.0’s technical implementation, capital inflows and turnover, and financial performance will be key indicators of whether Polygon can successfully open a new chapter.