“ No real need for money, the investments will be strategic ”
Jaynti Kanani, Sandeep Nailwal and Anurag Arjun co-founded Polygon (formerly Matic), a blockchain scalability platform in 2017. It was created to solve the problem of high fees and slow transactions on ethereum, the second most largest cryptocurrency in the world in terms of market capitalization. Polygon is built on Ethereum, but allows users to build applications on Polygon at a much lower cost than Ethereum. The valuation of Polygon’s native token, Matic, has risen from just $ 26 million when it was first issued in 2019 to over $ 14 billion. Matic’s price hike turned its co-founders into India’s first crypto billionaires, some of it stemming from their current stakes in cryptocurrency of around 4-5%. Billionaire investor Mark Cuban from Shark aquarium fame, recently invested an undisclosed sum in Polygon. Data in the crypto world is difficult to verify and there may be other Indians who have generated significant wealth but are not known to the public. mint spoke with Nailwal, whose crypto fund for covid-19 relief has so far raised more than $ 1 billion. Edited excerpts:
Can you tell us about yourself and your co-founders?
I am from Delhi. My co-founders are from Mumbai and Ahmedabad and our head office is in Bengaluru. I studied engineering and computer science. After that I worked for two years as a software engineer. Then I did my MBA, specializing in information technology, then I worked with Deloitte then Welspun E-commerce (where I was the CTO). I then launched a website for white collar services – think of it as a flipkart for services. The business didn’t grow as much as I hoped, and I started reading about artificial intelligence and technologies like blockchain. I went back to programming and met my co-founders. Kanani is also a computer engineer, who worked with Housing.com as a data scientist. He then tried to create a few apps like a prediction market for Game of thrones where he wanted a global payment method. This is what brought him to the blockchain. Arjun is also a serial entrepreneur. He was working with IRIS, software used by institutions such as central banks. Arjun started a GST related startup before meeting us. Mihailo Bjelic, our fourth co-founder, of Serbian origin, was working on a solution similar to Matic. He joined us last year as we moved from Matic to Polygon.
Is Maharashtra government exploring Polygon blockchain to keep covid test results?
They don’t officially work with us, but there are a few vendors that work with the government of Maharashtra that use Polygon. I think the government may have shared the mandate to have test results on a public blockchain and it could be a test project. No one needs our permission or needs to collaborate with us to build something on Polygon. For example, Egyptian government shipping documents are only published on the Polygon blockchain by another vendor.
How did Polygon come about?
My co-founders and I came up with the proof of concept in 2017. By April 2018, we had created the company and raised small funds from friends and family and started creating the product. This round was only $ 150,000. After that, we did another small round of about $ 500,000. After that, we made an initial exchange offer with Binance where we raised $ 5 million. In the early years, I started building the ecosystem in India. The whole environment around cryptocurrency was unfavorable. The developers were afraid of the legal hassle. You see, we are a technology platform and we don’t create apps ourselves. People build apps on our platform. Community strengthening is therefore very important. We have done a lot of hackathons in India. In the last 2 years we have had to do 200-300 college hackathons etc. We use India as a strength rather than a weakness.
Is Polygon greener than bitcoin?
In the “ proof of work, ” used by Bitcoin, computers have to solve complex mathematical problems. In Bitcoin you cannot be a miner on your laptop, you need huge complex computers which is not environmentally friendly due to the consumption of electricity. In the “proof of stake” used by Polygon, you don’t need massive computing power. You have to bet chips. Only a few hundred machines need to run for mining here, making electricity consumption a small fraction of bitcoin use.
What is the road for you to follow?
We don’t really need the money. Our future investments will be strategic in nature and the people who participate will bring more value than money. We are listed in the US and regulated with our listing on Coinbase, which brings institutional investors to Polygon. Mark Cuban is a huge angel investor, and we get his help onboarding entities like Lazy.com.
Is there a risk that someone will take over the Polygon network?
In “proof of work”, if someone wants to take over the network, they must have more than 51% mining power, although this is not decisive. The remaining 49% can reject false blocks and work their way into a new chain. In the ‘proof of stake’ you need to have an even higher mining power of 66% – this would currently be worth around 1.8 billion tokens for Polygon. Even here, the community will reject the fake blocks and the person attempting to take control will risk the value of their tokens; they will lose value.
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