Crack the Crypto Project of the Year 2022: Polygon

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Amid a contagion-fueled crypto winter that has chilled venture capital firms, coin holders, and NFT collectors alike, one project has mostly made undeniable strides toward onboarding the masses and putting infrastructure in place to support them: Polygon, Decrypts pick for crypto project of the year.

In 2022, Polygons’ perception has grown from one of many Ethereum scaling networks to a platform favored by major home brands and enterprises looking to harness Web3 technology, powering everything from web identity and metaverse customer loyalty. And it has made progress in its plans to support that growth with zero-knowledge scaling technology.

Over the past few months, despite the erosion of confidence in the crypto space due to the collapse of Terra and more recently FTX, Polygon has attracted a wide range of massive and well-established brands that are building applications at the top. of the Ethereum scaler.

Starbucks, Instagram, Reddit choose Polygon

The Reddit chat community was among the big announcements, and this is the first to show tangible results. Reddit rolled out collectible avatar NFTs based on its mascot Snoo this summer, and rather than charging money for each one and making it a pure revenue game, the company has increasingly no longer offered for free to its most active users as rewards.

Within months, a Reddit executive reported that users had created over three million Polygon wallets to claim NFTs. Today, over 5 million colorful avatars have been created on over 4.3 million unique wallets, a significant uptick in adoption, despite some corners of Reddit being deemed anti-crypto.

Efforts by other brands, which are earlier in the rollout or still to come, could potentially reach a much larger contingent of users (and perhaps less online).

Meta, for example, is rolling out NFT minting through Instagram, eventually allowing its billions of users to mint their photos and images on Polygon.

Coffee giant Starbucks is launching a new NFT-based rewards program that has already garnered unprecedented interest despite only being open to beta testers. And Nike plans to put digital apparel on Polygon in early 2023.

Even in the wake of FTX, I don’t see people backing down. I see people thinking about Web3 as central to their strategic future, from a technology perspective, Ryan Wyatt, CEO of Polygon Studios, tells Decrypt. The conversations continue, and I think every one of those companies thinking about Web3 will think Polygon first when making a decision.

Wyatt adds that while Polygon Studios supports brands and partners in a variety of ways, whether it’s investment, strategy, or technical advice, the ultimate goal is to become increasingly self-sufficient over time.

The more we advance in this area, the easier it will be for these companies to self-service on board, he says.

Polygon rejection

Wyatt joined Polygon Studios, the business development company supporting the decentralized blockchain platform, in March after leading YouTube Gaming for several years.

As a newcomer to the crypto industry, he previously told Decrypt that he sees a need for Web2 tech-savvy veterans to partner with the Web3 minds behind Polygon, to better speak to companies considering to move in this space. He described this mix as his teams’ secret sauce for attracting brands that might have considered other platforms.

But amid the rise in the number of big brands choosing Polygon, new backlash goes beyond the often tribal disputes spilling over social media. Recently, Polygon co-founder Sandeep Nailwal got into a Twitter spat with Solana-centric startup Helius co-founder Mert Mumtaz over Polygon Studios’ investments and integration.

I’ve ignored those comments, but let me, not for ecosystems feeling defeated and jealous, but for the @0xPolygon community.

– Polygon comes from a modest background, even thinking about paying $20 million for a project scares us, I wish we had that much surplus https://t.co/MhbRK9sqcX

Sandep | Polygon Top 3 by impact (@sandeepnailwal) December 6, 2022

Polygon uses the money to pay people to use the chain and acquire businesses, Mumtaz wrote, alleging that Polygon’s core team is paying builders to choose the platform. Nailwal defended Polygon and railed against Solana in a tweeted quote thread, noting Solanas’ downtime issues, and sparked a discussion that dominated Crypto Twitter for a few days.

All of this isn’t to say that Polygon isn’t open to strategic deals, but we’re not stupid to give away millions of dollars for free, Nailwal wrote in the thread. The truth is, all brands want to rely on Ethereum and not half-baked L1s. Polygon is just a way for them to access Ethereum.

The thread drew comments and criticism from across the industry as other founders and builders weighed in on the debate. Mike Dudas, founder of venture capital firm 6th Man Ventures, suggested that Polygon management was not honest about its branding deals.

Polygon absolutely pays for corporate deals, Dudas wrote in a since-deleted tweet. Many big names building on Polygon have been encouraged to do so by financial support, among many other factors. It’s a good deal, but don’t lie about it.

Asked about the role of financial incentives in bringing brands to Polygon, Wyatt told Decrypt, Polygon has a $100 million ecosystem fund where we invest in developers of all sizes. While this strategy is not unique, as most major protocols have been funded significantly over the past few years with a clear mandate to build and advance their ecosystems, the network effects have been substantial. Builders want to be where other builders are, and that’s one of the main reasons they continue to build on Polygon without further financial incentives.

And despite Nailwal’s criticism of Solanas’ problems, Polygon also ran into technical issues. In March, the sidechain network went offline for about 11 hours due to a node issue. And last December, a surprise (and controversial) hard fork of the Polygon blockchain was executed to fix what was described as a critical network vulnerability.

incoming zkEVM

To support its growing ambitions for mainstream adoption, Polygon is also developing the technology to propel creators of projects of all sizes through its three zero-knowledge (zk) scaling programs. Such solutions aggregate batches of transactions on a separate chain and then commit them to the main blockchain (Ethereum), allowing for much higher transaction throughput.

The star among the pack seems to be Polygons zkEVM, which promises full compatibility with the Ethereum virtual machine via an equivalent environment. As such, developers of existing Ethereum smart contracts, wallets, and development tools can use it effortlessly.

Polygon zkEVM was fully revealed this summer and launched its testnet in October, with the team claiming it is the first zkEVM to have a public testnet with source code proving it produces ZK proofs. The platform aims to handle 2,000 transactions per second (tps) compared to 30 tps on the Ethereum mainnet, but still below Solanas’ recent average.

Every researcher in the community agrees that zk is the future, Nailwal tells Decrypt, adding that today’s in-between technologies like optimistic rollups are just stopgap measures.

He says development on zkEVM, including testnet deployment, has already exceeded expectations and a mainnet implementation may not be far away. I think we’re very, very close to the mainnet, or some form of early mainnet, Nailwal adds.

Polygon acquired and implemented three different zk scaling teams, with Polygon Zero and Polygon Miden completing the package. Nailwal says taking a multi-pronged approach to zk models will provide more flexibility for creators as they seek to scale their decentralized applications (dapps) to reach large audiences.

We are extremely confident, more confident than when we took those big bets last year, that they were made the right way,” Nailwal said.

A ‘bright spot’ amid price cuts and bankruptcies

Amid discontent in some corners of the crypto world, Polygons contributors and supporters continue to build. Nailwal describes this year’s growth as surreal and says that while brand moves are making headlines, he’s also seen increased activity from Web3 native builders.

Polygon has certainly not been immune to market woes. Its MATIC token is down 69% year-to-date, almost on par with ETH’s losses (-68%) and a few points lower than BTC (-65%), but significantly better than SOL ( -93%) .

Withstanding the decline of the crypto market better than many other coins, aided by occasional pops of recent brand moves, MATIC has climbed to the 10th largest cryptocurrency by market capitalization. Nailwal describes it as an achievement for the ecosystem and his team, but says Polygon builders and supporters can’t let their heads down.

Wyatt Says 2022 Crypto Crashes Revealed What Had Been Seen As Crypto’s Golden Children [to] to be complete scammers and frauds, and not representing this space. Polygon leaders aim to focus on building, controlling what they can, and avoiding self-inflicted injury, he adds.

The growth of polygons in 2022 and the ability to attract major mainstream brands has been a rare bright spot in an extremely difficult year for the crypto industry. Wyatts is proud of the distinction, but he doesn’t want it to be a rare attribute for crypto projects in the future.

I want us to be a bright spot for space every year, he says. But I think for the space to really grow and get to where we need it, we need a lot of bright spots.

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