By: Jae, PANews
In the long history of Ethereum scaling, Polygon was once remembered as a 'sidechain.' Now, it is quietly shedding its old shell, striving for a rebirth.
Recently, Polygon co-founder Sandeep Nailwal has labeled 2026 as the 'Year of Rebirth' for POL. Within a week of his post, the POL token price surged over 30% in response.
As Polygon completes the acquisitions of Coinme and Sequence, and unveils its technology roadmap, this Ethereum scaling solution appears to be evolving into the 'payment and tokenization infrastructure' for the global market.
Spending over $250 million on acquisitions, bridging the last mile of cash on chain
Polygon has begun to adopt a highly aggressive strategy, directly penetrating the financial entry points of the physical world.
On January 13, Polygon Labs announced the completion of the acquisition of two cryptocurrency companies, Coinme and Sequence, with a total transaction amount exceeding $250 million. Coinme focuses on cash and cryptocurrency asset exchange operations and operates a cryptocurrency ATM network in the U.S.; Sequence provides on-chain infrastructure services, including cryptocurrency wallets and other products.
Polygon Labs CEO Marc Boiron and Sandeep Nailwal stated that this acquisition is an important part of their stablecoin and payment strategy, aimed at strengthening Polygon's layout in the infrastructure domain. This move also marks the extension of Polygon from 'smart contracts' to 'physical infrastructure.'
It is worth mentioning that Coinme is one of the earliest licensed Bitcoin ATM operators in the U.S. This transaction not only acquired its ATM network covering 49 states and tens of thousands of retail points (such as large supermarkets like Kroger) but more importantly, it secured a complete set of licenses essential for payment institutions in the U.S. — the money transfer license (MTL).
The deep logic behind this acquisition is to establish a physical deposit and withdrawal network. For those without traditional bank accounts or for ordinary users of CEX (centralized exchanges), Polygon provides a channel through Coinme's ATMs to directly convert cash into on-chain assets (such as stablecoins or POL) at supermarket checkouts.
This is a shortcut for 'cash on chain' and a heavy compliance barrier. Acquiring an entity that has been in operation for more than a decade and has a mature compliance framework will provide Polygon with a very high entry threshold. Although Coinme still faces some regulatory challenges (such as the refund directive from Washington State DFI), this remains the best solution for Polygon to tap into the liquidity of the physical world.
In short, this major acquisition is not just about buying equipment, but also about buying channels, buying licenses, and buying trust.
Sandeep Nailwal stated that this move will put Polygon Labs in direct competition with Stripe. Over the past year, Stripe has also acquired stablecoin and cryptocurrency wallet startups and developed its own public blockchain for payment scenarios, creating a complete technology stack from payment processing to user asset storage.
Overall, in the new round of stablecoin arms race, Polygon Labs is trying to stand on the same starting line as traditional fintech giants through acquisitions.
From 5000 to 100,000 TPS performance sprint
Participating in the war of stablecoin payments cannot be separated from strong support at the technical level.
According to the TPS (transactions per second) roadmap revealed by Sandeep Nailwal, Polygon aims to elevate the execution efficiency of the blockchain to the level of traditional networks.
The recent Madhugiri hard fork upgrade completed by Polygon has seen initial results, increasing on-chain TPS by 40% to 1,400 TPS.
The team's first-phase plan is to reach 5,000 TPS within six months; the goal of this phase is to address the congestion issues currently faced by the PoS chain during peak transaction times, enabling Polygon to meet the throughput demands for global retail payments.
A more aggressive second-phase upgrade plan aims to increase the TPS of the entire ecosystem to 100,000 within 12 to 24 months, meaning Polygon is expected to handle Visa-level transaction density.
Achieving this goal relies on two major technological leaps:
Rio upgrade: Introducing stateless verification and recursive proofs, reducing transaction finality from minutes to about 5 seconds, and eliminating chain reorganization risks;
AggLayer (Aggregate Layer): Through ZK proofs aggregation, achieving seamless sharing of multi-chain liquidity, making 100,000 TPS not a single chain's burden, but the distributed synergy of the entire Polygon network.
It can be said that Polygon is not transforming a single chain, but rather building a federation.
Payment business infiltrates retail scenarios, integrating three major fintech giants
Once the deposit and withdrawal channels and throughput capabilities are in place, payments will naturally follow.
Polygon is positioning itself as the technological backbone of the global payment network through deep ties with fintech giants.
Revolut's full access: As the largest digital bank in Europe with 65 million users, Revolut has integrated Polygon as its main infrastructure for cryptocurrency payments, staking, and trading. Revolut users can directly conduct low-cost stablecoin transfers and POL token staking through the Polygon network. By the end of 2025, the transaction volume of Revolut users on Polygon has shown a steady upward trend, with the cumulative transaction volume nearing $900 million.
Flutterwave's settlement bridge: African payment giant Flutterwave has also chosen Polygon as its default public chain for cross-border payments, focusing on stablecoin settlements. Considering the high costs of traditional remittances in Africa, Polygon's low fees and fast settlements provide better options for local drivers and trade on platforms like Uber.
Mastercard's identity solution: Mastercard has adopted Polygon to drive its 'Mastercard Crypto Credential' identity solution, introducing verified username functionality for its self-custodial wallets, significantly lowering the barriers to use and the address identification risks faced by users during transfers, thus enhancing the payment experience.
Polygon has also significantly penetrated daily consumption scenarios. Dune data shows that by the end of 2025, the number of small payment transactions (with single amounts between $10 and $100) on Polygon is close to 900,000, setting a historical high, an increase of over 30% compared to November.
Onchain research head Leon Waidmann emphasized that this transaction period highly overlaps with daily credit card spending, indicating that Polygon is gradually becoming a major channel for payment gateways and PayFi (payment finance).
Tokenization business primarily targets the institutional market, with BlackRock betting $500 million
If we say that payment is the entry point for user traffic on Polygon, then tokenization is its confidence as institutional-level infrastructure.
In the RWA (Real World Assets) distribution field, Polygon has become a testing ground and preferred platform for top global asset management institutions, with its low interaction costs and seamless compatibility with the Ethereum ecosystem giving Polygon a significant advantage in the on-chain migration of traditional financial assets.
In October 2025, BlackRock, the world's largest asset management firm, deployed approximately $500 million in assets in a single transaction on the Polygon network through its BUIDL tokenization fund.
This action is the highest endorsement of the security of the Polygon 2.0 architecture. With a massive inflow of institutional funds, Polygon's TVL (Total Value Locked) and liquidity depth may further improve.
The Real Yield Token (RYT) launched by AlloyX on Polygon is a typical case of the integration of traditional finance and DeFi. This fund invests in short-term, low-risk instruments such as U.S. Treasury bonds, with its uniqueness lying in supporting looping strategies. Investors can use RYT as collateral in DeFi protocols to borrow funds and reinvest in the fund to amplify returns.
The issuance of digital bonds by NRW.BANK in Germany on Polygon represents a significant breakthrough for the regulated capital markets in Europe. This bond operates under the framework of Germany's Electronic Securities Act (eWpG), indicating that Polygon can not only issue conventional cryptocurrency tokens but also support compliance assets that meet stringent regulatory requirements.
POL shows strong deflationary characteristics, token value capture restarts
Returning to the subject itself, from MATIC to POL, it is not just a change in token symbol, but a reconstruction of economic logic.
Since the beginning of 2026, Polygon has accumulated over $1.7 million in transaction fees and has burned more than 12.5 million POL tokens (approximately $1.5 million).
Castle Labs points out that the main reason for the surge in transaction fees is that Polymarket has opened a 15-minute prediction market charging feature, which directly brought Polygon over $100,000 in daily revenue.
Previously, the Polygon PoS network also set a historical record: burning 3 million POL in a single day, equivalent to about 0.03% of the total supply. This is not a coincidence, but a natural result of the ecosystem entering a high-frequency usage phase.
According to the EIP-1559 mechanism, when block utilization maintains above 50% for an extended period, gas fees will enter a rapid upward channel. Now, Polygon's daily burn rate has stabilized at around 1 million POL, with an annualized burn rate of about 3.5%, more than twice its staking annualized return rate (about 1.5%). This means that through on-chain activities alone, POL's circulating supply is being 'physically removed' at a considerable speed.
This high-density value capture may support Sandeep Nailwal's statement of 'token rebirth.'
Moat and fourfold risks coexist
Although Polygon's current form seems promising, it still faces fourfold tests:
The double-edged sword of regulatory policy: Although acquiring Coinme has obtained a license, it also exposes Polygon directly to the regulations of various states in the U.S. If issues with Coinme's compliance history escalate, it may impact the 2026 'rebirth' plan for the POL token.
The fragmentation challenge of the technical architecture: Polygon 2.0 includes multiple complex modules such as PoS, zkEVM, AggLayer, and Miden. While the multi-component architecture will be more powerful, maintaining such a large and technically diverse ecosystem poses extremely high engineering difficulties and security risks. Especially if vulnerabilities arise in AggLayer's cross-chain interactions, it could trigger systemic disasters.
The fierce competition in the public chain market:
The rise of Base: Backed by Coinbase, Base has gained significant user growth, encroaching on Polygon's market share in areas such as community and payments.
The attack from high-performance public chains: High-performance L1s like Solana still have advantages in transaction speed and developer experience, while Polygon's target of 100,000 TPS still needs time to validate.
Concerns about financial sustainability: Token Terminal data shows that Polygon had a net loss of over $26 million in the past year, with its transaction fee revenue struggling to cover validator costs. This reliance on ecosystem incentives means it is still in the 'burning money for market' phase. Even if it turns a profit in 2026, the sustainability of its blood generation capability remains to be seen.
Clearly, Polygon is no longer satisfied with being a 'plugin' for Ethereum; its transformation route deserves careful consideration: breaking performance bottlenecks through technological scaling, lowering entry barriers through investments and acquisitions, obtaining credit endorsements from top institutions, and finally strengthening user stickiness through high-frequency scenarios.
2026 as the 'year of rebirth' will not only mark fluctuations in the price of the POL token but also include the deep resonance of Polygon as an infrastructure with the pulse of global finance. For investors, tracking the technological landing progress of Polygon 2.0, the inflow and turnover of funds, and its financial performance will be key to judging whether Polygon can successfully achieve a renaissance.
(The above content is an excerpt and reprint authorized by partner PANews, original link)
"Polygon spends $250 million to complete the puzzle, POL deflation opens the 'year of rebirth'" This article was first published on (Block客).