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Polygon co-founders Jaynti Kanani and Sandeep Nailwal talked about their own growth story, the origin and development of the project.
Written by: Chandra R Srikanth
He is the son of a diamond factory worker. He used to live in a small house on the outskirts of Ahmedabad, Gujarat, India. He often struggled with not being able to pay for his tuition. His ambition at the time was to find a decent, paid job to help pay off his father’s debt. However, destiny clearly arranged a better direction for Polygon’s co-founder and CEO Jaynti Kanani-Polygon is a blockchain protocol born in India with a recent market value of more than 10 billion U.S. dollars.
Polygon announced a few weeks ago that it had received an investment from NBA Dallas Mavericks owner and billionaire Mark Cuban (a star investor in the American business competition variety show “Shark Tank”), which made it famous. Polygon is also supported by angel investor Balaji Srinivasan. The vision of the project is to provide faster and cheaper transactions on the Ethereum blockchain. Polygon’s token MATIC has become one of the top 20 crypto tokens in the world by market value.
The project was previously called Matic Network and was founded by Kanani, Sandeep Nailwal and Anurag Arjun at the end of 2017. Serbian engineer Mihalio Bjelic later joined as a co-founder. Nailwal established India’s anti-coronavirus fund, which recently received more than 1 billion Shiba Inu coins from Ethereum founder Vitalik Buterin.
Chandra R Srikanth, editor of the financial portal Moneycontrol, recently spoke with Kanani and Nailwal about Cuban’s investment, Polygon’s origin and vision.
Here is an excerpt from the interview:
How did you impress Mark Cuban in “Shark Tank”?
Kanani: Before Mark Cuban invested in Matic, he was our user. He has been using Polygon applications very frequently. To be honest, this is one of the main reasons that triggered this investment. We wanted to ask him if he was interested, so we contacted him. He is very happy to invest in Polygon. I think we are the first Indian crypto project he invested in. The addition of Mark is also a great moment for the Indian crypto ecosystem.
Nailwal: You must have seen those NFTs, for example (based on) Elon Musk and Jack Dorsey’s tweets cast NFTs. They are built using DApps based on the Polygon protocol. So in this sense, he already knows the market fit of our products.
Kanani: I think many people don’t know the government of Maharashtra. They use APP to test the results of the new crown. This is also done on Polygon. People can check their new crown test results on Polygon. Many people are using Polygon, but they don’t know.
Let us understand the origin story of Polygon (called Matic Network at the time). How did it come from?
Kanani: I joined Housing.com in 2017. After seeing the huge load on the Ethereum blockchain, I founded Matic at the end of 2017. At that time, there was congestion in Ethereum, and people were using CryptoKitties crazily. I wanted to try to expand the capacity of Ethereum. Whenever you try to deploy anything on Ethereum, you need scalability, otherwise you will pay a high fee and you need to wait a few minutes to confirm the transaction. So at that time, I started the Matic project. I met Sandeep in the crypto community group, and I met Anurag because he and I work in the same shared office space. I recommended Matic to both of them, and they agreed to join as co-founders. We put our full effort together in early 2018.
As the son of a worker in a diamond factory in Gujarat, you grew up in a humble environment. Today, Matic’s market value has exceeded 10 billion U.S. dollars. Let us understand your growth journey.
Kanani: I grew up in the suburbs of Ahmedabad. It’s not downtown Ahmedabad. My father rented a small house in the suburbs, where we grew up. When I was in school, we had no money to pay for the tuition. Fortunately, I finished high school (grade 10) and pre-university (grade 12), and then entered Dharamsinh Desai University near my home, where I completed my engineering major. My goal is to find a decent job to pay off the debt my father owed for our education and my sister’s marriage. So I joined Persistent Systems in Pune with a salary of 6,000 rupees per month. My father retired due to vision problems. He couldn’t see the shape of the diamond anymore, so I had to look for the next job. Fortunately, I got a full-time job. I used to start a number of side businesses outside of work. I joined a startup of Sumit Maniyar, who later founded Rupeek. Then I joined Housing.com and founded Matic myself. I was in debt at one time because I borrowed money for marriage. I never thought that I would start a billion-dollar company.
In February this year, Matic was renamed Polygon. Tell us how Matic 2.0 will evolve?
Nailwal: We initially started with the ( Ethereum ) expansion solution. The solution was built on Plasma. At that time, Plasma was really popular. At that time, everyone wanted to build a Plasma expansion solution on top of Ethereum, but the Ethereum community turned to a variety of different types of expansion solutions. Now Optimistic rollups and ZK rollups have more researchers and exposure.
Another problem is that because we started our business in India, we do not have the support of large venture capital-neither of us has the aura of Indian Institute of Technology graduates. Therefore, we will not immediately get the attention of VCs, especially in the field of cryptocurrency in India. You know, there is uncertainty in this industry in India.
We have to forge ahead. If there were no such unfavorable factors, a project like ours might have raised US$50 million and US$100 million in financing, and then raised it high. We have to work hard on the ground. We want to find a way to support the multiple expansion solutions of Ethereum mentioned above. We have more applications than anyone in the field. We also made Mihalio Bjelic, who is doing similar work, a co-founder.
As we said, let us provide various types of expansion solutions in the middle layer. This is not just a question of brand renaming, but an expansion from a single solution approach to multiple solutions. The addition of Mihalio also makes us a global team.
Kanani: I agree with Sandeep, this is not an overnight boom. We have had many painful moments.
In terms of cryptocurrency regulation, India has reached a critical crossroads. What is the best case and the worst case 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 cannot control it because it is run by hundreds of validators and networks all over the world. If you want to turn off or change anything, you can’t do it-this is the beauty of it. Currently we are global, and even the co-founders are all over the world.
Nailwal: The prerequisite way we build the entire enterprise and everything is that it is not affected by Indian regulatory actions. Let me explain to you. Our token entity is registered in the British Virgin Islands, and our entity interacting with the token entity is registered in Singapore. In India, we have a research company that has received funding for work done for this large entity in Singapore. Indian employees receive money directly from their bank accounts.
Talk about the number of transactions and users. What is the current scale?
Nailwal: Matic Network conducts 5 million transactions per day, and Ethereum conducts 1.7 million transactions per day. Polygon is a scalable network with more transaction throughput, but it is now 3 times that of Ethereum…
A frequently asked question is, what practical applications will be implemented in India?
Kanani: There is an application related to the new crown, which was developed by a start-up company for the government of Maharashtra. I think this is a great application. You can view your own nucleic acid test results on the blockchain without the intervention of a third party. You can also use the blockchain to send money around the world, without any third party to transfer money.
Nailwal: Yes, for example, in these remittance use cases, startups must comply with FEMA regulations and so on.
For example, there is a use case for the government of Maharashtra. I will show you a real example, which will be understood by people who are not so in-depth about encryption. Imagine I am a restaurant, somewhere in Maharashtra, and I want to verify if you are vaccinated. I have two options… The government can launch a web page where you can put your Aadhaar card or something, and then I can scan it. The problem is that the government must maintain the operation of this application, right? …You must have seen the Indian National Railways (IRCTC) and all these government websites. They are usually closed because they are overwhelmed by the huge amount of traffic. But here… once the government gets your address and puts it on the blockchain (for inspection), whether it has been vaccinated (at a glance), then there is no need to deal with the government…so, expansion is what we have been doing One thing that is sold to many people, especially public product data, the government has a lot of data that can be used for public goods. These can be put on the blockchain, and countries like India can benefit a lot from it.
What do you want to say to your family? How do you let them figure out what Polygon and Matic are?
Kanani: Honestly, my family, they don’t know Polygon. To be honest, I am not sure if my parents understand what I did, so I have no way to make them understand. For those who can understand, I can only say that I am building an infrastructure to serve the banking industry and all industries in the near future.
Nailwal: The process of persuading my in- laws used to be painful for me. They asked my wife many times, is this illegal? Is this guy an extrajudicial fanatic? Until now the news media began to report our news, they said, yes, he is doing business.