Ethereum’s Layer-2 scalability solution Polygon undergoes a successful upgrade – MATIC price reacts

• Polygon completes a key hardfork that reduces gas fee spikes and solves chain reorganization issues. 
• The upgrade has been followed by a slight surge in the price of MATIC. 

As we had reported earlier, Ethereum scaling solution Polygon has successfully implemented an upgrade that is contributing to a MATIC price rally. Dubbed the “Polygon Delhi Fork” it brings several key improvements to the Polygon protocol.

Polygon developers explain in a blog post that the upgrade will majorly reduce gas spikes during transactions and improve transaction finality. It does this by reducing chain reorganization (reorgs).

The successful hardfork is expected to cause the rate of change of base gas fee to fall to 6.25% from the current 12.5%. The change will smoothen severe fluctuations in gas prices. Similarly, the second part of the upgrade that addresses reorgs is expected to reduce the depth and frequency of the anomaly.

The hardfork was implemented after being put to a vote on Polygon’s governance forum in December. The proposal garnered 15 votes of which 87% were in favor of implementing it.

Meanwhile, as of Jan. 18, all active Polygon PoS chain validators have executed the hardfork. This achievement sees 3.5 million staked MATIC, including delegations, now validating the chain’s upgraded version.

The upgrade is also not the only change that Polygon developers intend to make to the layer 2 protocol. They disclose that work is ongoing for longer-term upgrades like parallelization, and zkEVM.

“Longer-term technical upgrades to Polygon PoS are being worked on, like parallelization, even while other promising tech for scaling, like Polygon zkEVM, is being built,” the post said.

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MATIC surges to two months high following upgrade

The successful upgrade sparked a price surge for Polygon’s native token MATIC. It rose to a high of $1.05, recording a 25.7% price increase from its price in Nov. 2022.

However, at press time the token saw a slight retracement on the day. MATIC currently trades around $0.99, down 1.83% in the last 24 hours. The current price marks a 65.8% drop from its Dec. 2021 all-time high value of $2.91.

Meanwhile, Polygon’s upgrade comes after fellow Ethereum layer 2 scaling solution Optimism also implemented a testnet upgrade on Jan. 12. The Optimism upgrade is called Bedrock. Optimism developers state that the upgrade will make the protocol the “cheapest, fastest, most minimal codebase for an Ethereum-equivalent rollup, ever.”

When implemented on mainnet, it will allow the scaling solution to offer the lowest possible L1 data fees, future-proof its proof schemes, and support multiple execution clients.

Arbitrum, another Ethereum scaling protocol, implemented its last major upgrade in August 2022. The upgrade called Nitro was a major leap for the L2. It significantly increased throughput by around 7x to 10x, improving Ethereum L1 gas compatibility and L1 interoperability, as well as implementing safer retryables to stem failed transactions.

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