Cryptocurrency Polygon, founded by 3 Indians, has touched $13 billion in market cap

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Cryptocurrency Polygon, founded by 3 Indians, has touched $13 billion in market cap
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  • Polygon's current (on May 19) market capitalisation is just under $13 billion.
  • The token touched $2.14 around midnight on May 18.
  • It was founded by Sandeep Nailwal, Anurag Arjun and Jaynti Kanani.

India may have a burgeoning industry that’s trading in cryptocurrencies, but the country’s importance in the worldwide crypto market is not really huge. That’s why the rise of a coin called Polygon was mostly overshadowed last week, as big changes happened in more popular cryptocurrencies like Bitcoin and Ethereum.

According to crypto price-tracker Coinmarketcap, a token called Polygon's current (on May 19) market capitalisation is just under $13 billion. But the company actually was not founded to simply put a coin up for trading on exchanges. Polygon is far removed from cryptocurrencies like Bitcoin or Ether right now, but it does rank in the top 20 cryptocurrencies worldwide. But where did it come from?

Matic Network
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Originally launched under the name Matic Network, back in 2017, Polygon is actually a platform built around the Ethereum blockchain, which can be used for developing other decentralised apps. It was founded by Sandeep Nailwal, Anurag Arjun and Jaynti Kanani.

“Matic Network is a Layer 2 scaling solution that achieves scale by utilising side chains for off-chain computation while ensuring asset security using the Plasma framework and a decentralised network of Proof-of-Stake (PoS) validators,” the company said in a blog post.

Technical jargon aside, Polygon is basically a system that is designed to solve scalability and usability issues that exist in the Ethereum blockchain, without compromising an app’s core decentralised aspect. “Matic strives to achieve a high degree of decentralisation with trust-less and decentralised execution while ensuring near instant transfers, low fees and conducive economics for micro-transactions,” the company said in the same post.
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Essentially, this means Matic allows companies building decentralised apps, a growing market, to scale their solutions and accommodate more users. It also takes advantage of the Ethereum blockchain, which has a very broad scope and can be used for many different kinds of apps. For instance, Polygon’s solution is being used by the government of Maharashtra in India to track COVID-19 cases in the state.

The company rebranded to Polygon in 2019 to take its business to the next level. “While we were grinding it out day by day and putting in the work to build Matic, we realised that our branding should mirror our beliefs and represent the idea and the vision Matic is working on,” the company said at the time.

One of Polygon’s founders, Nailwal, is also responsible for the India Covid Relief Fund, a cryptocurrency based fund meant to aid pandemic relief efforts in India. The fund has accumulated over $1 billion, thanks in large part to a donation by Ethereum founder Vitalik Buterin, last week.
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Kanani used to be a data scientist at online realty startup Housing.com before founding Matic, while Arjun was with information technology services firm Iris Business Services, according to their LinkedIn profiles.


Why is Polygon gaining steam?

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While Buterin’s donation to the India Covid Relief Fund must have helped Polygon gain some visibility, the token’s growth can’t be credited to that one event. Instead, the growth is more because of a wider surge in Decentralised Finance (DeFi) apps worldwide, like UniSwap and Maker. Polygon’s solution is designed to be helpful for decentralised apps, and hence gains users fast. It is used by such apps, including games, marketplaces, and more.

The other reason is speculation, as Nailwal told The Economic Times recently. “Growth has been significant. Some part of it is speculation — as with any cryptocurrency — but we have also expanded our vision and scope of work,” he said. “A combination of real-world application and user adoption has had a snowball effect,” he added.

According to Cointelegraph, the company added 75000 new users in the seven days till May 17. That shows investors that Polygon’s solution is gaining more users, and will grow in the long run. The token touched $2.14 around midnight on May 18, though it was back down to under $1 at around 5.30 p.m., India time, on May 19.

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