Sandeep Nailwal has stated that the Polygon network has become “net deflationary” in 2026, citing on-chain activity that he says reflects strong network usage and increasing fee burns across the ecosystem.
In a post shared on social media, Nailwal claimed that approximately 107 million units of POL were burned during the year, while roughly 105 million new tokens were minted over the same period. Based on these figures, he argued that circulating supply has slightly decreased, marking what he described as a structural shift in the network’s token economics.
The statement also highlighted Polygon’s transaction throughput, with Nailwal citing 198 million transactions processed in May and positioning the network as one of the most active blockchain ecosystems by usage. However, transaction comparisons across blockchains can vary significantly depending on whether metrics include raw transactions, internal smart contract calls, or filtered activity excluding bots and automated interactions.
The CEO further compared Polygon’s supply dynamics with other major blockchain ecosystems, suggesting that networks such as Ethereum, Solana, and Sui have experienced larger net token issuance increases over the same period. These figures were not accompanied by methodological details in the post and have not been independently verified within the context provided.
Token Burn Model Highlights Strength—and Complexity—of Modern Blockchain Economics
Polygon’s economic model incorporates a fee-burning mechanism that permanently removes a portion of transaction fees from circulation. This approach, similar in concept to Ethereum’s EIP-1559 model, is designed to tie token supply dynamics more closely to network usage. In periods of high activity, burn rates can offset or exceed issuance, potentially leading to temporary deflationary conditions.
However, token supply economics in modern blockchain systems are complex and influenced by multiple factors beyond transaction fees. Staking rewards, ecosystem incentives, validator emissions, and token migration mechanics all contribute to overall supply changes and must be considered when evaluating net inflation or deflation.
Related: Polygon Staking: A Complete Guide to Earning Rewards with POL
While Polygon’s reported figures suggest that fee burns exceeded new issuance in 2026, analysts typically caution that such snapshots depend heavily on the accounting framework used. Different definitions of circulating supply and burn mechanisms can produce materially different conclusions about whether a network is truly deflationary over time.
The broader claim that Polygon is being “sleeped on,” as stated in the post, reflects a common narrative among layer-1 and layer-2 ecosystems competing for developer attention, liquidity, and institutional adoption. As blockchain networks continue to scale and differentiate on throughput, cost, and economic design, tokenomics remain a key area of competitive positioning.
For now, Polygon’s reported shift toward net supply reduction adds another data point to the ongoing debate over how sustainable fee-driven deflation models can be in high-throughput blockchain environments.
