Meme coin Sponge migrates to SPONGE V2 on Polygon for security, lower fees and Play-to-Earn game launch.
Sponge, a meme coin, has declared the discontinuation of Sponge V1 and an expedited migration to the SPONGE V2 Polygon version.
This move aims to improve the project’s gaming architecture, leveraging the advantages of the scalable Polygon network. The decision to accelerate the transition is a response to a recent malicious attack on Sponge’s liquidity pool, prompting a shift to the more secure SPONGE V2 on the Polygon network.
The strategic shift not only seeks to mitigate the impact of the attack but also accelerates the launch of a fully decentralised Play-to-Earn game with significantly lower transaction fees.
Transactions on the Polygon network are known for their efficiency, costing between 0.1 and 0.5 MATIC ($0.077-$0.38), providing substantial potential on-chain savings compared to Ethereum transactions.
Transition Timeline and Strategic Advantages
The transition process is scheduled to start on Monday, February 5th, at 11:00 pm UTC. Consequently, Sponge V1 will be phased out immediately, rendering it worthless after February 5th. This decision aligns with the original contract design, where the liquidity of Sponge V1 was set to unlock on February 6th.
Sponge is expediting the move to SPONGE V2 on the Polygon network, capitalising on Polygon’s lower transaction fees. Polygon, categorised as a Layer 2 network, offers enhanced scalability, with the ability to scale up to 7,000 transactions per second (tps), compared to Ethereum’s 1–25 tps. This transition positions Sponge for a more secure and efficient blockchain environment.
Mitigating the Liquidity Pool Attack
In response to the recent security breach, Sponge implemented measures to insulate token holders from negative impacts and conducted static analysis testing to identify and address potential vulnerabilities. While the token price initially suffered, it has since returned to support levels observed in December.
Actions Required by Token Holders
Sponge is collaborating with exchange partners to suspend SPONGE V1 trading on February 5th at 11:00 PM UTC. SPONGE V1 holders on centralised exchanges are advised to withdraw and stake their tokens through the Sponge website before the cut-off to earn APY and claim SPONGE V2.
For non-custodial wallet holders, staking through the Sponge website is recommended, with a deadline of February 5th for uninterrupted staking APY.
Holdings of SPONGE V1 that have already been staked will experience a seamless transition, automatically transferring to the new Polygon staking contract.
To date, $3.36 million worth of SPONGE V1 has been staked, earning an APY of 244%.
Market Impact and Future Outlook
SPONGE V1, launched at $0.000025, is currently priced at $0.000509, representing a Return on Investment (ROI) of 2,034%. With the transition to SPONGE V2 on the Polygon network, there is speculation about the potential for $SPONGEV2 to surpass the previous SPONGE V1 all-time high of $0.0012 on January 8th.
Polygon’s Workforce Reduction
In related news, Polygon recently laid off 60 employees, constituting approximately 19% of its workforce. The move aims to right-size the team for enhanced performance. Polygon will offer two months of severance and health benefits, coupled with a total compensation increase of at least 15% for existing employees.
Price Resilience and SPONGE V2 Anticipation
Despite a broader decline in meme coins, Sponge has exhibited resilience, recording a 9% price rise amid preparations for the SPONGE V2 launch. This positive momentum aligns with Sponge’s strategy to expand functionality and use cases with the upcoming SPONGE V2.
As Sponge undergoes a strategic shift to a more secure and efficient blockchain environment on the Polygon network, the community anticipates the potential for SPONGE V2 to capitalise on Polygon’s scalability and lower transaction fees.