💸 Polygon Gets $450 mn VC Boost!
After 5 years of groundbreaking work, VCs are now interested in Polygon. Why?
While the Indian government may still be sceptical about crypto and virtual digital assets, an Indian-led firm is making major headways into this space.
Polygon, which creates solutions to solve the problems of the Ethereum blockchain, has finally caught the eye of major venture capitalists.
VCs like Sequoia Capital India, SoftBank, Tiger Global, and many many more have invested $450 million into the network.
But what's got them interested?Â
What is Polygon?
Before we get into Polygon's achievements, let's take a look at what it does.
A lot of the crypto world is based on blockchain technology and Ethereum is one of the most popular blockchains. But like other blockchains, it faces issues like slow transaction speed and high transaction fees.
Polygon solves these issues. How?
Imagine being swamped with work. Your to-do list keeps getting bigger and bigger. Doesn’t it add stress and slow you down?
The Ethereum blockchain is no different. As the transaction load increases, it gets difficult to manage the speed and cost of transactions.
Enter Polygon. It is like a group of friends (sidechains) who share Ethereum’s burden and the job is done in no time!
This is where the Polygon Matic token (MATIC) comes into the picture. Similar to Ether, MATIC is Polygon’s native token and is used for transaction fees across the network. Software developers and ecosystem contributors can also build dApps (decentralised apps) on Polygon by paying MATIC tokens to use the platform and its development framework.Â
Polygon's Journey
Despite this groundbreaking tech, VCs had been hesitant to invest in Polygon, even though they were investing in other Web3 companies. One reason for this could be that Polygon has no revenue.Â
Wait, how is that possible?
Well, it does earn money but all of this goes to the validators processing transactions. It doesn't come back to the core team or the company. And Polygon has no plans to change this setup.
This is why, before this round, it had attracted only $750,000 in VC money. Another reason for this could be that the core team was completely Indian and not many VCs trusted it.
But Polygon persevered with the help of its community, becoming a truly decentralised platform. It now has over 7,000 dApps deployed including platforms like Aave, Sushiswap, Pool, Uniswap, NFT marketplace OpenSea, and metaverse projects Decentraland and Sandbox.
Yeah, it’s like holding a deck with all aces!
Many of these names are either already huge or have the potential to become huge in the coming years. Decentraland and Sandbox could replace social media as we know it.
So, obviously, VCs are interested. And many of these VCs are those that have never before invested in Ethereum scaling solutions. Yes, that's how attractive Polygon is.
But if it doesn't earn any revenue, how are VCs going to make money?
Well, the VCs didn't take equity shares in Polygon. Instead, they got discounted MATIC tokens. As Polygon grows, the value of these tokens will also grow (just like how Ethereum's popularity has boosted Ether's price). They even valued the company based on MATIC's market cap ($13 billion).
So, they're completely betting on MATIC. And they're not wrong to do so.
MATIC is already one of the top 20 cryptos in the world. And this investment could further boost its price and convince more dApps to deploy themselves on Polygon.
A win-win situation, no?
And this could also be a win for India as a whole.
Back in Flipkart's early days when VCs pumped it with money, it created hype about investing in Indian e-commerce firms. This prompted the development of more e-commerce firms.
A similar chain of events could take place following this funding round.
In fact, sources claim Tiger Global is already thinking of investing $10 million in another Indian blockchain startup Ethereum Push Notification Service.Â
Do you think India could become a hub of blockchain and Web3 startups?
It’s time to begin the journey of creating long-term wealth! Become a ReadOn Club Member to discuss high growth potential startups, crypto projects and stocks with other finance enthusiasts. And so much more! Check it out 👇
Share this with your friends via WhatsApp or Twitter and help them become financially smarter! See you tomorrow :)
You can also listen to our stories because the Revolution ReadOn podcast is live!! Here: you can catch it on Spotify, Apple Podcast or Amazon Music, Google Podcasts, Gaana and Jio Saavn.
If you are coming here for the very first time: Don’t forget to join us on WhatsApp to get daily updates! 👇