India blockchain player Polygon gets $450m
Sequoia Capital India has led a USD 450m investment in Polygon, an Indian platform for building, scaling and connecting Ethereum-compatible blockchain networks.
SoftBank Vision Fund 2, Tiger Global Management, Republic Capital, Animoca Brands, Elevation Capital, Steadview Capital, Blue Pool Capital, Union Square Ventures, and Accel Partners also participated.
They were joined by Transcend Fund, Makers Fund, Sino Global Capital, WorkPlay Ventures, Dragonfly Capital, Dune Ventures, Variant Fund, Galaxy Digital, and Galaxy Interactive among others. The investment was executed through a private sale of Polygon’s Matic token, which has a market capitalisation of around USD 12bn.
The capital will be used to build out capacities to support applications related to Web3, a decentralised approach to the internet that Polygon believes will be most significantly underpinned by Ethereum.
Ethereum, best known for its eponymous cryptocurrency, is an open-source blockchain that has proven the predominant talent wellspring and business-building environment for the crypto industry. However, it is sometimes seen as impractical for developing decentralised finance (defi) and metaverse applications.
Ethereum’s most pressing question is how to increase its capacity to handle more transactions. The soaring popularity of defi and non-fungible tokens (NFTs) – the building blocks of metaverse business models – has brought congestion and soaring fees.
Polygon claims to have a range of scaling options and transaction rates that are among the industry’s lowest. It compares its offering in Web3 to Amazon Web Services in the traditional internet, or Web2.
“Web3 builds on the early Internet's open-source ideals, enabling users to create the value, control the network and reap the rewards. Ethereum, scaled by Polygon, will be the bedrock of this next stage in the Web's evolution,” Polygon co-founder Sandeep Nailwal said in a statement.
“Technological disruption didn't start with Web2, nor is it going to end there. That’s why we are very excited to see some of the same firms that funded the previous round of innovation now being our Web3 vision.”
Polygon said it aims to develop a tool for every possible Web3 use-case and scaling options at a click of a button. More than 7,000 apps are currently building Web3 projects on Polygon. Standout users include luxury brands company Dolce & Gabbana, NFT marketplace OpenSea, gaming company DraftKings, and metaverses Decentraland and The Sandbox.
Polygon POS, a “proof of stake” protocol that facilitates application development, recorded 1bn transactions last year. The network’s more than 130m unique addresses and some 2.7m monthly active users now generate about 3m transactions per day, which is said to be more than double the volume of Ethereum.
“The platform of choice to build on the blockchain today is Polygon,” Shailesh Lakhani, a managing director at Sequoia India, added. “This is an ambitious and aggressive team, one that values innovation at its core.”
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