Learn Half 1 right here: Slumdog billionaire: Unimaginable rags-to-riches story of Polygon’s Sandeep Nailwal
Rising up in poverty in a Delhi ghetto with an alcoholic father and an illiterate mom, Sandeep Nailwal has at all times had a hearth in his stomach to realize one thing higher.
He needs to go large or go house — middling success isn’t an choice.
“I’m not doing one thing small,” he tells Journal. “Okay, we construct some community, and it has a token. It does nicely for one cycle after which fades into the daybreak, and I make a couple of million {dollars} for myself and retire or no matter — this was not the plan.”
“We have been very clear that we’ll construct this, we’ll develop the group, and we’ll make it one of many greatest tasks within the house.”
And that’s why, in his thoughts, Polygon — previously Matic Community — is but to actually succeed, regardless of nudging a $19-billion market cap at one level and becoming a member of the highest 10 cryptocurrencies by market capitalization (it’s at the moment No. 13 with a $6-billion market cap).
“Being within the prime 10, prime 15 tasks brings no satisfaction to me. It’s very clear in my thoughts that I would like Polygon to have that sort of influence which Ethereum and Bitcoin have had. We’ve got to go to the highest three tasks within the house. And that’s solely after I would say that ‘OK Polygon has made it.’”
Half 1 of this characteristic informed the story of Nailwal’s rise from grinding poverty to going all-in on Bitcoin with $15,000 he’d borrowed to fund his marriage ceremony and the tough early days of Matic Community, the place the specter of working out of funds was ever-present.
By mid-2019, Matic Community had raised $5 million in a Binance preliminary change providing to maintain itself afloat and had launched the alpha model of its Ethereum layer-2 sidechain. Nevertheless it was slowly changing into clear that the Plasma know-how it was pursuing was not the reply the market was searching for.
Concepts round scaling had begun to vary, and Plasma’s shortcomings (TLDR: difficult, higher at transferring property than working sensible contracts) had seen it lose favor. Seeing which means the wind was blowing, the research-oriented Plasma Group determined to ditch the framework altogether in favor of constructing an Optimstic rollup and renamed the mission “Optimism” in early 2020.
However the Matic Community white paper had outlined a Plasma-based answer with fraud proofs and a proof-of-stake checkpoint layer, and the crew was decided to comply with by means of and construct it in 2019 and 2020, regardless of waning curiosity within the tech.
Mainnet market crash and resurrection
Simply because the mission was gearing as much as launch its mainnet in Could 2020, a worldwide pandemic and the March Black Thursday market crash intervened. Round 70% was wiped off the already paltry sub-3-cent worth of MATIC inside the house of 10 days. With fears of a brand new Nice Melancholy gripping the world, Matic Community’s future once more appeared doubtful.
“Immediately, all the things felt like it’ll go to zero. That shock was there for 2 to a few months. We survived that, however what we realized is that, you realize, we began with Plasma know-how, and now plasma is useless. And now we’re launching our mainnet. Individuals are, like, ‘Plasma is useless; there isn’t a curiosity from the group.’”
Nailwal says the crew got here to 2 conclusions.
The primary is that they’d attempt to get as many builders and builders as attainable. This was a hit, as they launched their Ethereum layer 2 simply in time for DeFi Summer time’s ludicrous fuel charges on layer 1.
The second conclusion was to by no means once more put their eggs in a single basket.
“We realized that we must be multichain; we are able to’t be counting on one explicit know-how,” he says.
Lengthy-term Ethereum group insider Mihailo Bjelic was additionally fascinated by a multichain future and joined the mission to grow to be one thing of a bridge to markets and communities from which the crew felt excluded on the time. Nailwal says the mission’s roots in India meant it had a low profile within the Western world, the place some thought of it to be “identical to one other web rip-off.”
Additionally learn: Past crypto — Zero-knowledge proofs present potential from voting to finance
In early 2021, Matic Community rebranded as Polygon to focus on the change in route. On the time, Nailwal informed Cointelegraph the thought was to grow to be “Polkadot on Ethereum” and so as to add Optimistic rollups, zero-knowledge (ZK) rollups and StarkWare-style Validiums alongside the PoS community.
However Nailwal says they shortly realized that Optimistic rollups have been at greatest an “intermediate answer” that wouldn’t have the ability to scale as much as have 50 chains working within the ecosystem.
“With ZK, you may think about a world with […] 100,000 chains; every of them has 1,000 transactions per second (TPS); all of them mixed collectively might be tens of thousands and thousands of TPS in the entire community. And the structure will nonetheless survive and maintain scaling.”
“Infinite scalability, unified liquidity and that’s the important level for why we guess on ZK as a result of ZK is the endgame for blockchain scaling.”
Polygon bull-run fever
On the daybreak of 2021, MATIC’s market cap was simply $87 million. By mid-year, it had surged to virtually $14 billion, and it was practically $19 billion by yr’s finish. That’s in no small half as a result of its surging consumer numbers and talent to scale Ethereum.
On the finish of 2020, it had fewer than 1,000 day by day lively customers, however by October that yr, it had surpassed Ethereum for the primary time with 566,000 customers in a day and had flipped ETH’s day by day transactions, too, due to excessive fuel charges on the L1.
Immediately, the founders have been very rich people, and the mission itself had the funds to embark on a serious acquisition spree.
In August, it snapped up all the Hermez community for 250 million MATIC. The mission turned Polygon Hermez, an Ethereum Digital Machine-compatible ZK answer centered on decentralization and a proof-of-efficiency consensus.
In December, it spent one other $400 million in MATIC to purchase the Mir crew of ZK-proof consultants to construct Polygon Zero (ZK recursive scaling). And the acquisitions stored coming.
“We reached out to all of them. We mentioned, ‘You need to work with us?’ And I feel at that time limit, no matter was like quantity three, quantity 4, quantity 5, like we acquired all of them, as a result of primary, quantity two didn’t include us. (However) the expertise in quantity three, 4, 5 groups is tremendous, tremendous good.”
The enterprise capital appeared to assume the brand new plan was a winner, with Polygon elevating one other $450 million in early 2022, promoting MATIC tokens in a elevate led by Sequoia Capital India and together with Tiger World and Softbank Imaginative and prescient Fund.
The benefits of having a number of groups taking totally different approaches turned fairly clear.
“We initially stored them utterly autonomous so they might pursue their very own analysis, they usually collaborated with one another. Attributable to that collaboration, immediately, we bought a ZK EVM, which individuals have thought is 4 or 5 years away.”
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He says the ZK EVM took simply 12 months to develop “due to the cross-pollination of concepts between these groups.”
Different ZK flavors growing underneath the Polygon umbrella embrace Miden (a StarkWare-like system with its personal digital machine) and Dusk (Optimistic rollups meet zero-knowledge cryptography).
Bets every means on ZK, JavaScript is for midwits
The opposite large benefit of getting a number of groups constructing totally different options is it doesn’t power Polygon to make the identical exhausting selections different tasks have needed to make.
For instance, StarkWare is betting that the extra efficiency offered by its Cairo digital machine will make up for the truth that it’s a lot more durable to port current Ethereum tasks over to StarkEx.
Many of the different tasks — zkSync, Linea, Scroll, and so on. — are making the alternative guess that much less efficiency however simpler compatibility with the Ethereum Digital Machine will appeal to tasks and see their options win market share.
Polygon is the one crew with bets every means, with Polygon Miden following StarkWare with a ZK-optimised digital machine. For his half, Nailwal thinks EVM will win within the brief time period, however different options will come into their very own within the years forward.
“I virtually really feel like EVM is like JavaScript proper?” he says. “I bear in mind after I was in first or second yr of my engineering school… JavaScript was thought of to be a programming language of the midwits! However at present, JS is in every single place; possibly 80% of the net is powered by JavaScript. So, EVM sort of has these results irrespective of how a lot you say, ‘These are the issues.’”
Nailwal provides, nonetheless, “Our plan is a 10-year-long plan. So, we now have the ZK EVMs, we now have Polygon Zero, however we even have Polygon Miden, which we imagine is extremely performant, has privateness options inbuilt […] and it’ll help all of the programming languages.”
Miden founder Bobbin Threadbare informed Journal earlier this yr that the Miden VM will allow customers to do issues like run high-quality video video games and generate ZK-proofs on their house PCs they will ship into the community.
“What they’re doing, it provides me goosebumps,” Nailwal says. “However Miden will begin blossoming in round one yr. By that point, we, because the Polygon group, must win the ZK EVM.” He hints {that a} new token and airdrop are being thought of to assist with this.
Ethereum upgrades to turbocharge Polygon L2s
Ethereum’s subsequent large improve, EIP-4844, which is meant to occur someday earlier than the top of the yr, introduces proto-danksharding to make life simpler for rollups, which Nailwal says is welcome however not a recreation changer.
“I feel some estimates have been saying as much as 200–300 TPS just for the rollups. So, not an enormous benefit, nevertheless it’s going to cut back the (fuel) value of the transactions.”
Full danksharding, which is “a number of years away,” based on the Ethereum Basis, nonetheless, will multiply that enchancment by the variety of shards, at the moment anticipated at round 64.
“So, you may think about that 64 multiplied by 200. So, there will likely be, like, you realize, 12,000 TPS, all of the rollups can help.”
In June this yr, the mission unveiled its Polygon 2.0 roadmap to grow to be the “Worth layer of the web.” The imaginative and prescient is for a community of ZK-powered L2s that may look like utilizing a single chain to customers due to a cross-chain coordination protocol. Builders can knock up their very own ZK-powered L2 chain in a flash utilizing Polygon’s Chain Growth Equipment.
The prevailing PoS blockchain will grow to be a Validium, which is one strategy to coping with the info availability downside of the way to affordably retailer stuff on Ethereum.
The roadmap may also see MATIC tokens upgraded to a brand new token known as POL (brief for Polygon) and introduce the controversial idea of restaking, which permits token stakers to earn extra rewards by serving to safe different networks.
“The POL token is mainly the hyper-productive, third-generation token. You’ll be able to validate on a number of chains, and you’ll validate for a number of roles: You could be an aggregator, you could be a sequencer, you could be a information availability supplier, and also you could be a prover. So, with the identical token, you may really stake on a number of layers.”
Restaking is controversial within the Ethereum group, with critics arguing it might flip into an unstable home of playing cards. However Nailwal says POL will likely be natively built-in into the ecosystem relatively than added by third events on prime, as with Ethereum’s EigenLayer, which is able to mitigate the dangers.
“With Polygon, risk-taking is extra enshrined within the protocol; that is a part of the protocol; that is how the protocol behaves,” he says.
“In the event you’re a validator and you might be working 100 chains, and of these 100 chains you falter otherwise you do fraud on one chain, you get slashed from all of them,” he continues, including he’s undecided EigenLayer might implement that — “particularly when they’re constructing on prime of one thing.”
“I feel there are quite a lot of nuances the place ours is way less complicated and simpler to do.”
Polygon 2.0 is just like the web of cash
For Nailwal, the last word intention of Polygon 2.0 is to evolve crypto networks in the identical means the web advanced. The forerunner of the web was ARPANET within the Seventies, then the invention of TCP/IP in 1983 allowed a number of networks to attach, forming an inter-network, which grew into the web due to extra applied sciences just like the Area Identify System and the World Huge Internet.
“It’s interconnectivity of all of the networks,” he says. “That is precisely what you see is going on on blockchains.”
“It’s very exhausting to maneuver your cash trustlessly from one chain to a different; you employ these bridges, which get hacked on a regular basis. That’s why Polygon 2.0 isn’t solely about having infinite scalability […] Nevertheless it also needs to make it possible for that worth that’s being created on these lots of of 1000’s of chains is also related and seamlessly movable.
He says the interoperable layer will allow worth to stream between L2 chains, in addition to Ethereum and doubtlessly different layer-1 chains as nicely sooner or later in the event that they take part.
“So, with this Polygon 2.0, we are able to obtain the identical traits as the net has,” he says. “The Web3 community, whichever will win, ought to have infinite scalability and seamless switch of worth between these chains.”
“That’s why Polygon 2.0 structure has bought quite a lot of essential acclaim.”
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Future for Polygon and Sandeep Nailwal
Even because the founding father of a multibillion-dollar blockchain and dwelling in luxurious in Dubai, Nailwal nonetheless feels unhappy, as if he has but to make the influence he feels he ought to. He seems to be as much as world changers like Mark Zuckerberg, Satoshi and Vitalik Buterin — “a very outstanding man.” So, mere wealth isn’t sufficient. He needs to make an enduring influence.
“I’ve by no means felt that Polygon has made it,” he says. “That half may be very relentless in my thoughts, like there isn’t a center floor like this.”
“I feel Bitcoin, Ethereum solely can say that they’ve made it — no person else, no different protocol can say that they’ve made it; they will die in a matter of six to 12 months.”
So, Nailwal gained’t be completely satisfied till the Polygon ecosystem really deserves to face alongside Bitcoin and Ethereum because the bedrock of all the business
“We’ve got to go to the highest three tasks within the house,” he says.
Learn Half 1 right here: Slumdog billionaire: Unimaginable rags-to-riches story of Polygon’s Sandeep Nailwal
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Andrew Fenton
Based mostly in Melbourne, Andrew Fenton is a journalist and editor protecting cryptocurrency and blockchain. He has labored as a nationwide leisure author for Information Corp Australia, on SA Weekend as a movie journalist, and at The Melbourne Weekly.