From the son of a diamond factory worker to the head of a billion-dollar blockchain project: How the founders of Polygon grew up

The son of a diamond factory worker, he once lived in a small house on the outskirts of Ahmedabad, Gujarat, India, and often struggled to pay for school fees. His ambition at the time was to find a decent, salaried job to help repay his father's debts. However, fate apparently arranged a better direction for Jaynti Kanani, co-founder and CEO of Polygon - a blockchain protocol born in India that recently surpassed a market value of $10 billion.

Polygon became famous a few weeks ago when it announced that it had received investment from billionaire Mark Cuban, owner of the NBA Dallas Mavericks (a star investor in the American business competition variety show "Shark Tank"). Polygon also received support from angel investor Balaji Srinivasan. The project's vision is to provide faster and cheaper transactions on the Ethereum blockchain, and Polygon's token MATIC has already ranked among the top 20 crypto tokens in the world by market value.

The project, formerly known as Matic Network, was founded in late 2017 by Kanani, Sandeep Nailwal, and Anurag Arjun, with Serbian engineer Mihalio Bjelic joining as a co-founder a little later. Nailwal set up India’s COVID-19 Fund, which recently received a donation of more than $1 billion in Shiba Inu coins from Ethereum founder Vitalik Buterin.

Chandra R Srikanth, editor of financial portal Moneycontrol, recently spoke to Kanani and Nailwal about Cuban's investment and the origins and vision of Polygon.

The following is an excerpt from the interview:

How did you impress Mark Cuban, the giant shark in "Shark Tank"?

Kanani: Mark Cuban was a user of ours before he invested in Matic. He has been using Polygon apps very frequently. To be honest, this was a major trigger for the investment. We reached out to him to see if he was interested. He was very happy to invest in Polygon. I think we are the first Indian crypto project he has invested in. It is also a great moment for the Indian crypto ecosystem to have Mark join us.

Nailwal: You must have seen those NFTs, like the ones minted by Elon Musk and Jack Dorsey’s tweets. They were built using DApps based on the Polygon protocol. So in that sense, he already knew the market fit of our product.

Kanani: I think many people don’t know that the Maharashtra government is using an app to test the COVID results, which is also on Polygon. People can check their COVID test results on Polygon. Many people are using Polygon, but they don’t know it.

Take us through the origin story of Polygon (then called Matic Network). How did it come about?

Kanani: I joined Housing.com in 2017. I founded Matic in late 2017 after seeing the huge load on the Ethereum blockchain. Ethereum was congested at the time, people were using CryptoKitties like crazy, and I wanted to try to scale Ethereum. Whenever you try to deploy anything on Ethereum, you need scalability, otherwise you will pay high fees and wait for minutes to confirm transactions. So at that time, I started the Matic project. I met Sandeep in the crypto community group and Anurag because he and I worked in the same co-working space. I recommended Matic to both of them and they agreed to join as co-founders. We went all in together in early 2018.

As the son of a diamond factory worker in Gujarat, you grew up in humble circumstances. Today, Matic is valued at over $10 billion. Let’s take a look at your journey.

Kanani: I grew up in the suburbs of Ahmedabad. Not in the city, but in a small house rented by my father in the suburbs where we grew up. When I went to school, we had no money to pay for school fees. But luckily, I completed high school (10th grade), pre-university (12th grade) and then got admitted to Dharamsinh Desai University near my home, where I completed my engineering studies. My goal was to get a decent job and repay the debt my father had incurred for our education and my sister's marriage. So I joined Persistent Systems in Pune for Rs. 6,000 per month. My father retired due to vision problems. He could no longer see the shape of diamonds, so I had to look for the next job and luckily I found a full-time job. I used to start multiple side businesses in addition to work. I joined a startup of Sumit Maniyar, who later founded Rupeek. Then I joined Housing.com and founded Matic. I was in debt because I took a loan for my marriage. I never thought that I would start a billion-dollar company.

In February this year, Matic was renamed Polygon. Can you tell us how Matic 2.0 will evolve?

Nailwal: We started with the (Ethereum) scaling solution, which was built on Plasma, and Plasma was really hot at the time. Everyone wanted to build a Plasma scaling solution on top of Ethereum, but the Ethereum community moved on to many different types of scaling solutions, and now Optimistic rollups and ZK rollups have more researchers and exposure.

Another problem was that because we were starting out in India, we didn’t have the backing of big VCs — neither of us had the aura of an IIT graduate. So, we didn’t get immediate VC attention, especially in the crypto space in India, which, you know, was uncertain in India.

We had to forge ahead. Without the above disadvantages, projects like ours might have raised $50 million, $100 million in financing and then held high. We had to work hard on the ground. We wanted to find a way to support multiple Ethereum scaling solutions mentioned above. We have more applications than anyone in the space. We also made Mihalio Bjelic, who was doing similar work, a co-founder.

We said, let's provide different types of scaling solutions in the middle layer. This is not just a matter of rebranding, but expanding from a single solution approach to multiple solutions. And Mihalio's joining also makes us a global team.

Kanani: I agree with Sandeep, it was not an overnight success. We had many painful moments.

India has come to a critical crossroads when it comes to cryptocurrency regulation. What are the best and worst case scenarios for you? How will possible future regulations affect Polygon and Matic Tokens?

Kanani: So for us, the actual network of the Polygon project is decentralized and even we don’t control it because it’s run by hundreds of validators and networks around the world. If you want to shut down or change anything, you can’t – that’s the beauty of it. We are global at this point, and even the co-founders are all over the world.

Nailwal: The way we structured the entire business and everything was premised on the fact that it was not subject to regulatory action in India. Let me explain it to you. Our token entity is registered in the British Virgin Islands, and our entity that interacts with the token entity is registered in Singapore. We have a research company in India that is funded through work that we do for this big entity in Singapore. The Indian employees receive the money directly in their bank accounts.

Let’s talk about the number of transactions and users. What is the current scale?

Nailwal: Matic Network does 5 million transactions per day, Ethereum does 1.7 million transactions per day. Polygon is a scalable network and will have more transaction throughput, but it is already 3 times that of Ethereum…

Beyond that, looking at our circulating tokens (60% of our total supply), the valuation is around $14 billion. In terms of users, Aave is one of the largest DeFi apps launched on Polygon, and they have over 30,000 users on Polygon compared to their 26,000 users on Ethereum. Overall, on Polygon, we have close to 1 million unique addresses, which is 30-50% of Ethereum addresses today. Polygon is able to attract these new users because it is a scaling platform, so we are able to attract retail investors.

A question that is often asked is, what are the practical applications that will be implemented in India?

Kanani: There is a COVID-19 related app that was developed by a startup for the Maharashtra government. I think it is a great app where you can check your test results on the blockchain without any third party involved. You can also use blockchain to send money around the world without any third party involved.
Nailwal: Yes, for example, in these remittance use cases, startups have to comply with FEMA regulations and so on.

For example, there is a Maharashtra government use case, and I will give you a real example that even people who are not that deep into crypto will understand. Imagine I am a restaurant, somewhere in Maharashtra, and I want to verify whether you have been vaccinated or not. I have two options… The government can launch a webpage where I can put your Aadhaar card or something, and then I can scan it. The problem is that the government has to maintain this application, right? … You must have seen the Indian Railways (IRCTC) and all these government websites, they are usually down because the huge traffic overwhelms them. But here… Once the government takes your address and then puts it on the blockchain (to verify), whether you have been vaccinated or not (at a glance), then you don’t need to deal with the government… So, scaling is one thing we have been selling to a lot of people, especially public goods data, the government has a lot of data that can be used for public goods. This can be put on the blockchain, and a country like India can benefit a lot from it.

What would you like to tell your family? How would you help them understand what Polygon and Matic are?

Kanani: Honestly, my family, they don't understand Polygon. Honestly, I'm not sure my parents understand what I do, so I don't have a way to make them understand. For those who do understand, I can only say that I am building the infrastructure that will serve the banking industry and everything in the near future.

Nailwal: It was very painful to convince my parents-in-law. They asked my wife many times, is this illegal? Is this guy a lawless person? Only now that the news media started reporting on us, they said, yes, he is doing the right thing.

Source link: www.moneycontrol.com