Sandeep Nailwal, Polygon Co-Founder joins the Yahoo Finance Live panel to discuss Polygon’s platform.
- Of course, there have been a lot of updates in the crypto world as we were discussing before. One of the big ones when it comes to the Ethereum network has been the London hard fork and issues around transaction fees as transactions, particularly NFT space has boosted fees for users to even use the Ethereum network. But one protocol, a Polygon, is building out scaling solutions attached to the network, and they've seen transactions rise here.
Happy to bring on the co-founder of Polygon, Sandeep Nailwal joins us right now. And Sandeep, I mean, when we look at this, you've gotten a lot of attention-- the likes of Mark Cuban from Shark Tank, an investor, now adding it to his NFT protocol. But talk to me about what it is that Polygon is trying to do in kind of bringing those fees down, and what you've seen so far.
SANDEEP NAILWAL: Yeah. So I mean, our primary thesis is that-- so we are a secondary layer, or a second layer, Ethereum scaling solution. What we believe is that, and our thesis is that Ethereum is going to emerge as the ultimate settlement layer for this decentralized sort of business execution or business logic execution layer that we are seeing. That Web 3.0, some people call it decentralized world, what not, whatever you want to say.
But this kind of decentralized world, Ethereum is-- our thesis is that it's going to emerge as the default settlement layer. And what we are doing is, we are building a secondary-- or a second layer-- scaling solution or blockchains on top of it. So what you do is, instead of you doing transactions on Ethereum, you do transactions on these secondary layers. And that is what Polygon is building. And we provide multiple different kinds of scaling solutions on top of Ethereum, where you can run your applications, run the transactions, finance applications, and everything.
And Polygon that way has been, in terms of number of transactions currently stands even higher than any other chain in the space. And also in terms of the developer adoption, Polygon is after Ethereum the most adopted blockchain right now. All the top DeFi protocols that you see, most of them have a layer two store, or a secondary chain store at Polygon. And they are now seeing more users on these secondary chains than they the other one. Yeah.
- Well, the opportunities to use Polygon has also grown. As I said, Mark Cuban an investor there, now integrating it with his NFT platform, Lazy.com. So that is interesting there. When you talk about the security questions around having a layer on top of the Ethereum network, there are some security questions around that. Interesting to hear Ethereum co-founder Vitalik Buterin talking about that on one podcast. Just want to read what he said about you guys at Polygon.
He said, quote, "Even though its security isn't perfect, at least it exists, and people can go use it. And then, over time, the chain matures, the applications mature. I think it's a very reasonable strategy. I'm definitely really happy that they're part of the ecosystem." Of course, Ethereum's going through their own changes to kind of stabilize transaction fees right now. I wonder if that might-- how does that maybe impact the growth of Polygon, seeing if they're kind of already addressing some of their issues too on their own?
SANDEEP NAILWAL: Yeah. So I mean, even if, let's say, Ethereum, the demand for this decentralized execution of business logic is so big right now, is that even if Ethereum scales by-- so each 2.0 and all these efforts are probably going to scale Etherium by, let's say, 50 times. But the demand is already 1,000 x of that. And then, this is when we are just getting started. The gaming industry is just waking up to blockchains. The brands with their NFTs are just waking up to blockchains. Wall Street is just waking up too.
And all those financial hubs of all the countries around the world-- enterprises have not even started. So the demand is already orders of magnitude higher than the potential increased capacity of Ethereum, even if it increases by 100 x, the demand still is hundreds of orders of magnitude more than that. So that's why, as I was explaining, that our thesis is that, Ethereum main chain will remain the settlement layer, where all these smaller business transactions you will run on these secondary layers and publish cryptographic proofs back to Ethereum.
And that's what we are seeing very heavily. For example, today Aave published-- Aave is the leading lending borrowing platform globally. And they have, on Polygon, they have twice the number of active users then they have on the Ethereum main chain. And this is only in the last three months. And this is going to only accelerate from here.
- Yeah. And we've talked about scaling solutions before. You can look at Lightning on the Bitcoin network. And then, that's kind of, I guess, a fair comparison there. But obviously, Polygon is working on much more than just that. And so, when you look at how you want to distinguish Polygon from the other people working on scaling solutions on Ethereum as well, is there one piece that has you most excited right now, particularly about what you guys are trying to work on that would distinguish you? And I know no one ever wants to get pigeonholed. But if there is one thing that you're seeing the biggest growth at right now?
SANDEEP NAILWAL: Yeah. So I mean, I would say the biggest thing is, as a protocol, we have very high level of defensibility, meaning that all our competitors are building some kinds of specific types of technology to scale Ethereum. Whereas we, six months back, we kind of expanded into Polygon. We were previously called MATIC network, which means that Polygon will always be a multi chain Ethereum solution. So even if some competitor is able to build a different kind of technology, we will also be offering the similar kind of technology on top of Ethereum.
So basically, Polygon instead of being one kind of solution, it's an aggregator. And that is the biggest power of Polygon and provides it the long term defensibility. That even if in the short run, some other competitor products might achieve some traction, but eventually the developers have the whole suit coming to Polygon, and which makes it much easier.
I think it's very similar to what Amazon and Google Cloud do for the Web 2.0 execution layer, where you can go to Amazon, buy this kind of server do you want. We believe that this technology of the infrastructure technology will also get commoditized eventually. And then, the developers will come to a platform like Polygon, and then they'll simply choose based on some parameters, that this is the kind of solution I want and deploy their applications without thinking too much about what goes on underneath.
- All right. Sandeep Nailwal, Polygon co-founder. Appreciate you coming on here to chat with us today. Interesting stuff in early days. Yeah. Thanks again.