Polygon, an Indian blockchain startup, has built a layer-2 scaling network on the top of the Ethereum blockchain. One can compare this to a flyover built on an Ethereum highway. The flyover is more efficient. The developers could build and scale blockchain-based applications. Such projects could relate to decentralised finance, Web3.0 and metaverse among others. Polygon says that there are 7000 plus decentralised apps built on its platform. There are more than two million active users.
Polygon is funded by Sequoia, SoftBank and Tiger Global at a valuation of $10 billion. Founders and VCs call it a Flipkart moment for India’s blockchain ecosystem. Polygon’s success encourages talented founders to build in Web 3.0 space, that too from India. Many more blockchain startups could be set up in India, say a startup like EPNS. (Ethereum Push Notifications Service).
Polygon got a valuation of $10 billion with no revenue to show. The valuation is based on the price of Matic, a crypto token of Polygon. Consider Polygon as a listed company, with Matic as its equity. Matic is sold on most crypto exchanges. It has a market capitalisation of around $13 billion on the day of funding.
The VC investors will receive benefits in the form of tokens over a period of three years. This structure is common in the Web3.0 world to protect retail investors.
As crypto prices move up very fast, institutional investors might dump their tokens. The aim of the VCs is to make a specific multiple of returns on investment. VCs are also never allowed a big enough equity stake to call the shots. Web3.0 world is without IPOs, and VCs will have to rethink their perspective.
It is true token-based communities are still a work in progress. The future is still not certain.
Polygon has shifted majority of its operations from Bangalore’s posh residential and startup-friendly locality Indiranagar where it had begun to Dubai, the US and other crypto-friendly destinations.
Polygon’s founding fathers are Sandeep Naliwal, Jayanti Kanani, Anurag Arjun and Mihalio Bejlic. They are the rockstars of crypto world. These founders are not in India
Polygon is building a Web3.0 power house. It is set up in the British Virgin Islands (BVI), has an entity in Switzerland, and large teams operating out of Belgrade (Serbia) and the US.