The Polygon network has recorded a significant acceleration in its internal deflation by processing a POL token burn of 25.7 million units during the month of January. According to on-chain data reported by industry analysts, this figure represents approximately 0.24% of the asset’s total supply, marking an activity milestone since the official transition to the new token standard.
This increase in the incineration rate coincides with a spike in the usage of Polygon’s Proof-of-Stake (PoS) chain, which saw peaks of up to 800,000 active accounts earlier this month. Nevertheless, despite this robust technical performance, the asset’s price remains in a sideways range, cautiously oscillating between $0.11 and $0.113 as of the latest market close.
The acceleration of the burn mechanism is directly linked to the volume of processed transactions, which has been driven by the micropayments sector and prediction markets. During the first month of 2026, the Polygon network managed to remove capital from circulation valued at nearly $3 million, demonstrating the efficiency of its economic model based on real-world utility.
On the other hand, the market structure shows that institutional and retail investors maintain an observant stance, waiting for a clearer trend confirmation before committing further. Furthermore, the 20% increase in daily trading volume has lifted the market capitalization to $1.2 billion, although the RSI still sits at neutral levels near 40, reflecting a cautious recovery.
Will the reduction in supply be able to drive POL’s price in the short term?
Although the POL token burn is a positive indicator for the long-term health of the ecosystem, its immediate impact on the quote remains limited by global sentiment. However, technical analysts suggest that the persistence of this incineration rate could compress the effective supply, increasing price sensitivity to any future increase in user demand across the entire scaling ecosystem.
While the POL cryptocurrency seeks to break the $0.12 resistance level, the success of platforms like Polymarket and the new “Open Money Stack” infrastructure continues to feed network metrics. In this way, Polygon consolidates its position as a cost-effective scalability solution, strengthening its value proposition against direct competitors within the highly competitive Ethereum Layer 2 sector.
Finally, projections for the remainder of 2026 suggest that, if this level of adoption holds, Polygon could retire up to 3% of its annual supply. Therefore, investors should monitor whether the current support base manages to stay firm, avoiding further deep corrections while the deflationary mechanism continues to work silently in favor of the asset’s long-term holders.
