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Why did the price of POL fall?

Polygon (POL) dropped 4.00% in the last 24 hours, pushing its losses over the past week to 10.11%. This decline comes amid traders taking profits and a general downturn in the crypto market. Here’s a quick look at the main reasons:

  1. Profit-Taking After a Big Rally – POL jumped 24.61% last month, so some traders cashed out to lock in gains.
  2. Job Cuts at Polygon Labs – The company reduced its staff by 30%, raising concerns about how quickly it can execute new plans.
  3. Overall Market Weakness – The broader crypto market fell 2.84%, with altcoins like POL underperforming.

Deep Dive

1. Profit-Taking (Negative Impact)

What happened: POL’s price rose sharply last month, reaching nearly $0.18. After this strong run, many traders sold their holdings to secure profits. Technical signals, like the Relative Strength Index (RSI) at 43.01, suggest the upward momentum is fading.
Why it matters: When short-term holders sell, it increases selling pressure. Since POL has moderate liquidity (turnover ratio of 0.0914), these sales can cause bigger price swings.

2. Workforce Reduction (Negative Impact)

What happened: On January 16, 2026, Polygon Labs cut 30% of its employees as part of a shift toward focusing on stablecoin payment solutions, following a $250 million acquisition (Coinspeaker).
Why it matters: Layoffs often create short-term uncertainty. With fewer staff, the company might face delays in important projects like the AggLayer integration, which could hurt investor confidence.

3. Market-Wide Pressure (Negative Impact)

What happened: The total value of all cryptocurrencies dropped 2.84% in 24 hours. Altcoins, including POL, were hit harder, as shown by the Altcoin Season Index at 27. POL’s price movements tend to be more sensitive to market shifts, making losses more pronounced.
Why it matters: Investors moved money into Bitcoin, which now holds 59.1% of the market, pulling funds away from mid-sized coins like POL. Trading volume increased by 56.13%, indicating more selling activity.

Conclusion

POL’s recent price drop is due to traders cashing out after a strong rally, concerns over company restructuring, and a weak overall altcoin market. While key projects like AggLayer are still progressing, negative market sentiment is driving selling pressure.
What to watch: Will POL hold the $0.135 support level, which was a breakout point in December? Maintaining this level is important to keep its bullish outlook intact.

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What could affect the price of POL?

Polygon’s move into payments has the potential to boost adoption, but there are still some short-term risks to watch.

  1. Strategic Shift: Polygon invested $250 million to acquire companies focused on regulated stablecoin payments. This could increase long-term use but may cause short-term uncertainty.
  2. AggLayer Growth: Staking POL tokens unlocks rewards across multiple blockchains and airdrops. More staking and token burns could reduce supply and support price.
  3. Price Action: POL is holding key support at $0.135 but needs to break above $0.16 to continue its upward trend.

In-Depth Analysis

1. Project Shift & Acquisitions (Mixed Outlook)

Polygon Labs recently laid off 30% of its staff in January 2026 while spending $250 million to acquire Coinme (which helps people buy crypto in retail stores) and Sequence (a wallet infrastructure company). These moves aim to build a “regulated payments stack” for stablecoins, shifting Polygon’s focus from general blockchain scaling to financial services like remittances and settlements.

What this means: In the short term, layoffs and uncertainty about this new direction have caused some selling pressure. However, if Polygon succeeds in handling payment volumes, POL tokens could gain value through transaction fees and token burns over time.
Source: Coinspeaker

2. AggLayer & Staking Demand (Positive Outlook)

AggLayer v1, launched in 2025, allows POL token holders to stake their tokens and help secure multiple blockchains at once. Validators earn rewards from different chains, encouraging more staking. Currently, over $400 million worth of POL (about 38% of all tokens available) is staked, which locks up supply and reduces selling pressure.

Stakers also qualify for airdrops from projects like Billions and Katana. Additionally, the network burns over 1 million POL tokens daily, which reduces the total supply and could increase scarcity.

What this means: Growing staking and token burns may create supply shortages, while more chains joining AggLayer could increase demand for POL. If daily burns stay above 1 million tokens, this could support price gains.
Source: Hokage on X

3. Technical & Market Sentiment (Neutral Outlook)

POL is currently holding a key support level at $0.135, tested recently on January 17. The Relative Strength Index (RSI) is neutral at 51.48, indicating no strong momentum either way. Resistance sits near the 7-day moving average at $0.148.

While daily token burns and recent gains of over 30% in the past 30 days show underlying strength, concerns from layoffs and a weak altcoin market (Altcoin Season Index down 7.14% weekly) limit upward momentum.

What this means: Maintaining support at $0.135 is important to avoid further declines. A close above $0.16 would be needed to target higher prices between $0.18 and $0.20. If support fails, POL could retest $0.12.
Source: CoinMarketCap

Conclusion

Polygon’s bold move into payments and the expanding use of AggLayer could drive a recovery for POL in 2026. However, execution risks and overall market sentiment remain challenges in the near term.

Keep an eye on token burn rates and AggLayer adoption: can daily transactions keep burning more than 1 million POL tokens?


What are people saying about POL?

Polygon’s POL token is in the spotlight, with positive moves like token burning and staking growth balanced against concerns over layoffs and market uncertainty. Here’s the key takeaway:

  1. Token burns are speeding up, which reduces supply and could increase the token’s value.
  2. More users are staking POL, encouraged by rewards and airdrops.
  3. Recent layoffs have raised worries about selling pressure and low market liquidity.
  4. Despite negative rumors, core developers remain focused on building useful technology for the long term.

In-Depth Look

1. Token Burns Increase Scarcity and Could Boost Price

@73lV_, a crypto analyst, points out that Polygon is burning about 1 million POL tokens daily. Burning means permanently removing tokens from circulation, which reduces supply. When fewer tokens are available but demand stays the same or grows, the price can go up. This is a positive sign for POL holders, especially as the Polygon network sees more activity.
See original post

2. Staking Growth Supports Ecosystem and Token Demand

@xsx_lisa highlights that staking POL is becoming more popular. Staking means locking up tokens to support the network and earn rewards. Currently, over $400 million worth of POL is staked. Stakers also qualify for multiple airdrops—free token giveaways—which encourages people to hold their POL. Polygon’s approach connects different blockchains rather than competing with them, which could increase long-term demand for POL.
See original post

3. Layoffs Raise Concerns About Price Pressure

@AskGigabrain reports that Polygon Labs cut about 30% of its staff. Following this news, POL’s price dropped 4.5% to $0.149. With fewer people working on the project, some investors worry about its future. Also, the market for POL is not very liquid, meaning there aren’t many buyers and sellers at any given time. This can make price drops more severe if selling increases.
See original post

4. Developers Stay Focused Despite Negative Sentiment

@gzdefiboy notes that while some negative rumors (often called FUD—fear, uncertainty, doubt) are circulating, Polygon has a small 1% yearly inflation rate to keep validators (network participants) motivated. The team is concentrating on building solid financial infrastructure for the future. This outlook balances the short-term concerns with a longer-term vision, making the overall impact neutral for now.
See original post

Conclusion

The outlook for Polygon’s POL token is mixed. On one hand, token burning and staking growth support its value. On the other, layoffs and negative sentiment create uncertainty. Investors should watch the $0.14 price level closely, as it may indicate where POL is headed in the near term.


What is the latest news about POL?

Polygon is making big changes and facing some market ups and downs. Here are the key updates:

  1. Job Cuts as Polygon Focuses on Stablecoins (January 17, 2026) – Polygon Labs laid off 30% of its employees while buying Coinme and Sequence for $250 million to build a regulated payments platform.
  2. POL Token Drops 18% in One Week (January 18, 2026) – After recent gains, the POL token lost value due to profit-taking and market swings, making it the worst-performing major altcoin that week.
  3. Ransomware Group Misuses Polygon Smart Contracts (January 16, 2026) – The DeadLock ransomware group used Polygon’s smart contracts to hide their operations, raising concerns about blockchain misuse.

In-Depth Look

1. Job Cuts as Polygon Focuses on Stablecoins (January 17, 2026)

What happened:
Polygon Labs cut 30% of its workforce while acquiring Coinme, a licensed payments company, and Sequence, a wallet technology provider. This $250 million deal aims to speed up Polygon’s plan called the "Open Money Stack," which focuses on regulated stablecoin payments. Coinme’s network includes over 50,000 retail locations, and Sequence offers tools that work across different blockchains.

Why it matters:
Polygon is shifting from just improving blockchain speed and scalability to building a regulated payment system using stablecoins. This could make the POL token more useful for everyday transactions. Although the layoffs show some short-term challenges, the acquisitions give Polygon the tools it needs to work with traditional financial institutions. (Coinspeaker)

2. POL Token Drops 18% in One Week (January 18, 2026)

What happened:
The price of POL fell 18% to $0.138 despite Polygon being one of the top crypto projects in 2026 according to CoinMarketCap. This drop came after a strong 50% price increase in late December 2025. The decline is mainly due to investors taking profits and overall market volatility.

Why it matters:
Technical analysis shows the price momentum weakening, but POL is still holding above a key support level at $0.135. Experts say this price drop is more about investors shifting their focus to other sectors rather than any serious problems with Polygon itself. The network continues to see strong activity. (AMBCrypto)

3. Ransomware Group Misuses Polygon Smart Contracts (January 16, 2026)

What happened:
Security researchers from Group-IB found that the DeadLock ransomware group has been using Polygon smart contracts since August 2025 to store proxy server addresses. This makes it harder for authorities to shut down their infrastructure because blockchain data can’t be changed or deleted.

Why it matters:
This isn’t a flaw in Polygon’s technology, but it highlights the challenges of preventing illegal activities on public blockchains. Polygon’s team confirmed that no user funds were at risk. Still, this incident shows the importance of better monitoring and analyzing blockchain data to detect misuse. (CoinMarketCap)

Conclusion

Polygon’s move toward regulated stablecoin payments is ambitious but comes with challenges like token price swings and misuse of its technology by bad actors. However, with over $400 million worth of POL tokens already staked for rewards on its AggLayer, Polygon’s new payment infrastructure could help build trust and adoption over time, balancing out short-term doubts.


What is expected in the development of POL?

Polygon’s roadmap is focused on improving scalability, enabling different blockchains to work together, and supporting real-world payment solutions.

  1. AggLayer Integration (2026) – Bringing together liquidity across blockchains and enabling secure, fast cross-chain transactions using zero-knowledge (ZK) technology.
  2. Staking Layer Expansion (2026) – Allowing validators to earn rewards by supporting multiple network services beyond just transaction validation.
  3. Gigagas Throughput (2026) – Aiming to process 100,000 transactions per second (TPS) to support global payment systems.
  4. Stablecoin Payments Push – Building a regulated payment platform through acquisitions of Coinme and Sequence, focusing on stablecoin transactions.

Deep Dive

1. AggLayer Integration (2026)

Overview: Polygon’s AggLayer v0.3 is designed to unify liquidity and data across different blockchains, allowing users to move assets and information seamlessly without relying on bridges, which can be slow or risky. This layer uses zero-knowledge proofs to ensure privacy and security. Recent tests have shown speeds of 1,400 TPS, with full rollout expected by 2026 (Polygon Blog).
What this means: This is positive for the Polygon token (POL) because fees and cross-chain activity could increase demand for staking POL. However, delays in development or competition from other projects could pose challenges.

2. Staking Layer Expansion (2026)

Overview: The upgrade will let validators support multiple network functions like ordering transactions and verifying data, earning POL rewards for each. This broadens the role of POL holders beyond just securing the network. Rewards will be split between validators and a community fund (PIP-18).
What this means: This could attract more institutional participants, which is good for the network. However, the planned 2% yearly increase in POL supply might put downward pressure on prices if adoption doesn’t keep pace.

3. Gigagas Roadmap (2026)

Overview: Polygon aims to boost transaction speeds to 100,000 TPS through upgrades like the Rio hard fork (which introduces lightweight nodes and instant transaction finality) and the Bhilai upgrade (which increases gas limits by 10%). This makes Polygon suitable for handling small payments and real-world asset settlements (CoinMarketCap).
What this means: If these improvements lead to widespread use by businesses, it’s a strong positive for Polygon. However, there are risks related to network stability during these major upgrades.

4. Stablecoin Payments Pivot

Overview: Polygon has acquired Coinme, which has over 50,000 retail locations, and Sequence, a wallet infrastructure company, to build a regulated platform for stablecoin payments. This shifts POL’s role from just a gas token for decentralized finance (DeFi) to a key part of compliant payment systems (Coinspeaker).
What this means: In the short term, this pivot has led to layoffs and a drop in valuation, which is negative. But if Polygon captures even a small share of the $8 trillion cross-border payments market, the long-term outlook is promising.

Conclusion

Polygon is evolving from a general-purpose Layer 2 solution into a high-speed settlement platform focused on payments and real-world assets. Key technologies like AggLayer and Gigagas are central to this shift. While recent market volatility reflects uncertainty about this new direction, Polygon’s plans for reducing token supply growth after 2026 and forming institutional partnerships could significantly increase its value. The big question is whether Polygon’s focus on practical, real-world use cases will outperform competitors still focused mainly on speculative applications.


What updates are there in the POL code base?

Polygon’s technology is evolving with updates focused on improving speed, cross-chain connections, and token use.

  1. Madhugiri Hardfork (Dec 9, 2025) – Boosted transaction capacity by 33% using flexible block times.
  2. Heimdall v2 Mainnet (Jul 10, 2025) – Cut transaction finality time to 4–6 seconds.
  3. AggLayer Expansion (Ongoing) – Made it easier to share liquidity across different Polygon chains.

Deep Dive

1. Madhugiri Hardfork (December 9, 2025)

What happened: This update introduced improvements (PIP-75 and PIP-74) that let the network adjust block times dynamically, sometimes as fast as 1 second, without needing more updates later. It also added Ethereum security upgrades (EIP-7883, EIP-7825) to make transactions safer and gas fees more manageable. These changes help Polygon handle more transactions, especially for payments and real-world assets.
Why it matters: Faster and cheaper transactions make Polygon more attractive for global payments and app development, which is good news for POL holders. (Source)

2. Heimdall v2 Mainnet Migration (July 10, 2025)

What happened: Polygon upgraded its core system from Tendermint/Cosmos-SDK v0.37 to CometBFT/Cosmos-SDK v0.50. This removed outdated code and improved security, especially for regulated applications. The time it takes for transactions to be finalized dropped from about 90 seconds to just 4–6 seconds. Validators (network operators) needed to update their software to keep the network running smoothly.
Why it matters: This upgrade strengthens Polygon’s foundation for future growth but doesn’t directly impact POL’s price right now. It makes the network more reliable and easier to maintain. (Source)

3. AggLayer Expansion (Ongoing)

What happened: The AggLayer v0.3 update, launched in Q3 2025, allows different Polygon chains to share liquidity seamlessly without relying on bridges, which often cause delays or risks. Future updates plan to use zero-knowledge proofs (ZK-proofs) to enable secure, trustless connections between chains, aiming for 100,000 transactions per second by 2026.
Why it matters: Easier liquidity sharing attracts developers and institutions, increasing demand for POL as the main token used for staking and utility across multiple chains. (Source)

Conclusion

Polygon’s recent upgrades show a clear focus on becoming a key platform for real-world payments and multi-chain applications. The Madhugiri and Heimdall updates improve speed and security, while AggLayer helps connect different Polygon chains smoothly. As stablecoins and enterprise use grow, the big question is: Will Polygon’s technical improvements lead to lasting value for the network and its users?