Blockchain Network Polygon Receives $450 Million Investment from Sequoia Capital
Silicon Valley venture capital firm Sequoia Capital has made a major blockchain play with a $450 million investment in blockchain network Polygon. The network is used as a support layer to Ethereum and helps its blockchain process transactions at scale.
The funds are part of a broader investment in Web3, which is being touted as the next phase of a decentralized internet based on blockchain technology. Sequoia began pivoting toward blockchain and cryptocurrency last year, investing in 21 startups in the space which represented 25 percent of its total investments.
“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, managing director of Sequoia India. “This is an ambitious and aggressive team, one that values innovation at its core.”
Polygon plays a pivotal role within the Ethereum universe, as it has become more congested over time, resulting in slower transaction times and higher processing fees. Networks like Polygon's sit on top of Ethereum's network, acting as proof-of-stake blockchains. They take some of the load off the main blockchain, while enabling their token-holding participants to become active network validators by staking their holdings.
The proof of stake method for validating blockchain is more energy efficient than the traditional proof of work model, while enabling much faster transaction times. Ethereum is currently in the process of transitioning to a proof-of-stake model with its much anticipated Ethereum 2.0 rollout. For now, Ethereum's network handles about 15 transactions per second using proof of work, while Polygon can handle thousands per second. The company claims it has completed over a billion transaction and maintains around 2.7 million monthly active users.
Sandeep Nailwal, co-founder of Polygon, envisions the company becoming a decentralized version of AWS, Amazon's cloud computing arm. Ultimately, he sees Polygon becoming a central player in Web3, acting as a platform for big brands to develop their own Web3 strategies.
“Web3 for me means ownership, censorship resistance and verified compute,” said Nailwal. He added that companies like Facebook or Twitter control their own computations, while Web3 promises “transparency” around those processes.
Polygon already has Adidas and Prada experimenting with non-fungible tokens (NFTs) on its network. The company plans to use $100 million of the new funds to support development of new projects, while the remainder will be allocated as buffer money. Polygon is also making a play in the gaming sector, and recently hired former YouTube executive Ryan Wyatt to head its game studio.
Edited by Luke Bellos
