Ethereum scaling and infrastructure development​ platform Polygon has raised about $450 million in funding as it builds a product lineup and paves the way for mass adoption of Web3 applications. ​

The round led by Sequoia Capital India saw the participation of over 40 venture capital firms and investors including SoftBank Vision Fund 2, Galaxy Digital, Galaxy Interactive, Tiger Global, Republic Capital, Accel, and Unacademy.

Also read: What is sharding and why Polygon co-founder says it may not scale Ethereum enough?

Alameda Research, Transcend Fund, Makers Fund, Animoca Brands, global video game leader and games industry investor Scopely, Third Point, dune ventures, Union Square Ventures, Seven Seven Six, Elevation Capital, Sino Global Capital, DCG, Standard Crypto, Celsius, Dragonfly Capital, Variant Fund, Blue Pool Capital, WorkPlay Ventures (led by Zynga founder Mark Pincus) and many others also joined the round.

This is Polygon’s first major financing round since the project was created. The funds will be raised through a private sale of Polygon’s native MATIC token.

Founded in 2017 by Jaynti Kanani, Anurag Arjun, Sandeep Nailwal and Mihailo Bjelic as a secondary scaling solution for the Ethereum blockchain, Polygon is building a suite of scaling solutions, including Polygon PoS, Polygon Edge and Polygon Avail, that is similar to what Amazon Web Services offers Web2 developers -- a tool for every possible use case. The team is also investing in zero-knowledge (ZK) technology that will be key to onboarding the next billion users to Ethereum, the company said.

A community-first project Polygon owes its success to the ecosystem of early believers, developers, and stakeholders. With this investment, it hopes to further push the community's role in making Web3 a reality. “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," said Polygon co-founder Sandeep Nailwal. "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."

The network’s capacity to handle more transactions remains the biggest challenge for the Ethereum community. The popularity of new applications in decentralized finance (DeFi) and non-fungible tokens (NFTs) have brought along congestion and soaring fees. Polygon is working to offer a broad range of scaling options at low transaction rates.

In 2021, Polygon attracted some of the biggest projects in Web3, from DeFi protocols such as lending platform Aave to luxury brands company Dolce & Gabbana and NFT marketplaces including OpenSea and Mark Cuban’s Lazy.com. Virtual worlds such as Decentraland and Animoca Brands’ The Sandbox are also laying the groundwork for the metaverse on the network, it said.

More than 7,000 decentralized apps (dApps) are currently building on Polygon, making it the main destination for Web3 platforms and developers.

Polygon PoS clocked a billion transactions last year. The network has over 130 million unique addresses. Its 2.67 million-plus monthly active users now generate some 3 million transactions per day, more than double the volume of Ethereum. Polygon’s native MATIC token has a market capitalization of over $12 billion.

“The platform of choice to build on the blockchain today is Polygon. Thousands of developers across a range of applications are choosing Polygon and their complete set of scaling solutions for the Ethereum ecosystem,” said Shailesh Lakhani, MD at Sequoia India. “This is an ambitious and aggressive team, one that values innovation at its core. Sequoia Capital India is thrilled to lead this significant financing round.”

In the future, Polygon is bullish on zero-knowledge cryptography, a technology widely seen as the end game for blockchain scaling. It has committed $1 billion to ZK-related efforts.

(Edited by : Pradeep Suresh V)

First Published:Feb 8, 2022 10:26 AM IST