Polygon Raises $450 Million for zk-Rollup Development
Earlier this week, Polygon, one of the most well-known Ethereum layer-2 solutions, announced a raise of $450 million from a collection of high-profile venture capital (VC) firms.
Polygon is known for its low gas fees, paid in $MATIC, a key aspect in P2E (play-to-earn) gaming, like the upcoming Cool Pets game. Fees are also lower for minting NFTs and investing in Decentralized Finance (DeFi) protocols.
The funding raise followed another major move by Polygon – hiring the former YouTube Head of Gaming to lead their Polygon Studios organization. Polygon has already established itself as one of the top Ethereum Virtual Machine (EVM) side chains and now has the capital to fund their next initiative of developing scaling solutions that can change how users interact with the Ethereum blockchain forever.
Blue Chip Venture Capital Firms Choose Polygon
Cryptocurrency exploded in popularity over the past 18 months and world-renown VC firms have noticed. The crypto news cycle is filled with large investments in new chains, DeFi protocols, and NFT projects.
But who are the most recent firms that invested in Polygon? The round was led by Sequoia Capital and also included Galaxy Digital, Republic Capital, and others.
Here are some companies and projects the aforementioned VC firms have previously funded:
- RTFKT (Recently acquired by Nike)
- Dapper Labs
Polygon's Mission to Lead Ethereum Scaling With zk-Rollups
Polygon was originally founded to solve one of Ethereum’s biggest pain points: cost-prohibitive gas fees.
To solve this, Polygon built a layer 2 solution to enable developers to build a platform that is user-friendly and low cost. While they’ve experienced massive growth since launch and now have over 7,000 unique dApps (decentralized applications) on the chain, Polygon also has their sights set on being the premier Ethereum scaling solution by heavily investing in Zero-Knowledge Rollup technology.
Zero-Knowledge Rollups (also known as zk-Rollups) compress large volumes of transactions from layer 1 (Ethereum Mainnet), process them as a single transaction on a layer 2 solution (like Polygon), then communicate back to layer 1 that all of the transactions are valid.
Polygon sees the zk-Rollup as the future of Ethereum scaling due to its ability to allow users to benefit from the security of layer 1 with the low-cost transaction perks of a layer 2 solution.
The race to developing the best zk-Rollup technology is an expensive one and Polygon has made it no secret that its their primary focus.
Over the last several months, they announced new initiatives to research and create several types of roll-up tech that can be utilized on the Ethereum blockchain. The inner workings are complex, but more information is available on the official Polygon website.
Changing the Foundation of Ethereum
There’s a lot to unpack from this funding announcement and Polygon’s mission to create the best zk-Rollup technology on the market. Here’s the TL;DR version: if Polygon can successfully create a fully functioning and secure zk-Rollup technology, it will change how we interact with Ethereum forever.
By enabling projects to leverage zk-Rollups users can interact securely with Ethereum Mainnet without having to worry about paying egregious gas fees for simple transactions. Scaling to this level opens the door for widespread adoption of cryptocurrency (namely Ether, also called ETH) as the preferred peer-to-peer payment method, innovative DeFi projects, and a cheaper NFT minting process.