This guide is educational and is not financial advice. Crypto lending carries a real risk of losing money. Check current terms directly with any platform before you deposit.
In short
- Polygon PoS is an EVM network where lending protocols work the same way as on Ethereum, with lower transaction fees.
- Since 4 September 2024 the network’s gas and staking token is POL, which replaced MATIC.
- Lending conditions on Polygon are set by each protocol’s governance and can change quickly, as Aave’s 2025 vote showed.
- The main extra risks are bridged assets, thinner liquidity and protocol settings that differ from the Ethereum market.
How crypto lending on Polygon works
Polygon PoS runs the same kind of smart contracts as Ethereum, so lending protocols deploy their markets there with the same mechanics: you deposit an asset to earn interest, or deposit collateral and borrow against it. If you are new to this, start with crypto lending basics and our overview of DeFi lending protocols.
What changes is the environment around the protocol: the fees you pay, the assets available, how those assets reached Polygon, and the risk settings chosen for that particular market.
MATIC is now POL
On 4 September 2024 POL replaced MATIC as the gas and staking token of Polygon PoS. MATIC held on Polygon PoS was converted automatically. MATIC held on Ethereum has to be upgraded through the Polygon Portal or the migration contract, and Polygon warns that sending MATIC directly to the contract address loses the funds (Polygon).
For lenders and borrowers this matters in two ways. You need POL to pay fees on the network, and older guides or wallets may still show MATIC. If a market lists both names, check which token contract it actually uses.
Why people lend and borrow on Polygon
- Lower fees. Depositing, repaying or adding collateral costs less than on Ethereum mainnet, so smaller positions are practical.
- Faster adjustments. Cheap transactions make it easier to top up collateral when your loan-to-value ratio gets close to liquidation.
- Familiar protocols. Large lending protocols run Polygon markets alongside their Ethereum ones.
What is different from Ethereum
| Factor | What to check on Polygon |
|---|---|
| Asset origin | Is the stablecoin issued natively on Polygon or bridged from another chain? Bridged tokens add bridge risk. |
| Liquidity | Smaller markets mean higher price impact in liquidations and faster rate spikes when utilization is high. |
| Risk settings | Loan-to-value limits, borrowing caps and which assets can be used as collateral are set per market and can differ from Ethereum. |
| Governance | Protocol votes can freeze assets or change parameters for one network only. |
| Network changes | Polygon runs several networks. Make sure you are on Polygon PoS and not on a network that is being retired. |
Governance can change the market overnight
In February 2025 Aave governance voted to set the loan-to-value ratio of stablecoins such as USDC and USDT on Polygon PoS to 0%, which stops new borrowing against them. The vote followed a Polygon proposal to put bridged stablecoins to work for yield, which Aave contributors saw as a risk to those assets. At the time Aave was the largest application on Polygon PoS by value locked (The Block, 25 February 2025).
Markets keep evolving after such votes. In October 2026, for example, an Aave forum thread noted that POL on the Polygon market could be borrowed only within a special MaticX/POL mode, and asked why (Aave governance forum, 9 October 2026). The practical point: read the current settings of the exact market you use, not a guide written for another network or another year.
Before you deposit
Open the market page of the protocol and check the current loan-to-value limit, the liquidation threshold and whether the asset is frozen or capped. These numbers decide when you get liquidated, and they can be changed by a governance vote.
Polygon zkEVM is being retired
Polygon announced in June 2025 that it will deprecate Polygon zkEVM Mainnet Beta in 2026 (Polygon forum, 11 June 2025). Lending positions on that network are a different thing from positions on Polygon PoS. If you used a protocol on zkEVM, follow the protocol’s own instructions for withdrawing.
Risks to weigh
- Smart contract risk on every protocol you use. See smart contract risk.
- Bridge risk for any asset that was moved to Polygon from another chain.
- Stablecoin risk, including a depeg of the asset you lend. See stablecoin depeg risk.
- Liquidation risk when borrowing, made worse by thin liquidity.
- Governance risk: parameters can change for one network without changing elsewhere.
Checklist
- You hold POL for fees and you are connected to Polygon PoS.
- You know whether your stablecoin is native or bridged.
- You checked the current LTV, liquidation threshold, caps and freeze status of the market.
- You know how to repay or add collateral quickly if prices move.
- You compared the rate with other networks and with typical lending yields.
Frequently asked questions
Is MATIC still used on Polygon?
No. Since 4 September 2024 POL is the gas and staking token of Polygon PoS. MATIC on Polygon PoS was converted automatically; MATIC on Ethereum can be upgraded through the Polygon Portal.
Is lending on Polygon safer than on Ethereum?
Not by default. The protocol code is often the same, but bridged assets, smaller liquidity and network-specific settings add risks that the Ethereum market does not have.
Can I still borrow stablecoins against stablecoins on Aave Polygon?
Aave governance set the LTV of stablecoins such as USDC and USDT on Polygon PoS to 0% in February 2025, which stops borrowing against them. Settings can change again, so check the current market page before you act.
Sources
- Polygon: MATIC to POL migration on 4 September 2024
- The Block: Aave votes to halt lending on Polygon PoS (25 February 2025)
- Aave governance forum: POL borrowing on Polygon v3 (9 October 2026)
- Polygon forum: Sunsetting Polygon zkEVM Mainnet Beta in 2026 (11 June 2025)
Our standards
This article was researched from primary sources and checked by a second person before publication. Found an error or an outdated number? Tell us and we will correct it. Corrections policy.
