Blockchain: investors are betting big on Polygon to usher in web3, the new era of the internet: how does it work?


Representative image. | Photo credit: iStock Images

Highlights

  • Polygon is also a platform where developers can create their own blockchains and create Defi (decentralized finance) offers.
  • The platform also has its own token – Matic. According to reports, instead of issuing new shares, the company sold Matic tokens to investors, hoping that as more apps adopt the Polygon chain, the value of the token will increase.
  • In platforms, technologies, and assets like the cloud, Wolfram Alpha, Apple’s Siri, and Bitcoin, we can already see the characteristics that will inevitably come to define Web 3.0.

Indian blockchain-based company Polygon has raised $450 million in a new venture funding round led by Sequoia Capital India. Besides Sequoia, other investors who participated in the latest round include Tiger Global, SoftBank, Galaxy Digital, Makers Fund, Alameda Research, Dune Ventures, and Republic Capital.

For many of these investors, this is their first time betting on a blockchain infrastructure game. But, given Polygon’s $13 billion market capitalization and recent history of aggressively expanding its portfolio of blockchain scaling solutions, the company can hardly be called a gamble.

What is Polygon?

Ethereum is the second most popular blockchain behind Bitcoin in terms of popularity and market capitalization. However, as more users flocked to Ethereum, the blockchain network faced increased traffic, slow processing speeds, and longer transaction times. To solve this problem, a trio of Indian engineers developed Polygon.

Polygon is what is called a “layer 2” solution in that it runs alongside the Ethereum blockchain. As a scaling solution, it enables faster transaction times, processing speeds, and lower transaction costs on Ethereum.

To think of it in simpler terms, if someone sent a video of all transactions on the Ethereum blockchain, validating that would require a lot of processing power. However, with Polygon, it’s like the network is only taking a snapshot of the video, enough to act as proof-of-stake on the Ethereum blockchain. In this way, Polygon can aggregate thousands of blockchain transactions before connecting them to the Ethereum chain.

Polygon is also a platform where developers can create their own blockchains and create Defi (decentralized finance) offerings, facilitated by advanced modules that enable greater interconnectivity of blockchain networks and customizable features.

The platform also has its own token – Matic. According to reports, instead of issuing new shares, the company sold Matic tokens to investors, hoping that as more apps adopt the Polygon chain, the value of the token will increase.

What is Web3?

Web 3.0, also known as Web3, has eluded definition so far and, in truth, it’s likely to be so even in the coming year. But in platforms, technologies, and assets like the cloud, Wolfram Alpha, Apple’s Siri, and Bitcoin, we can already see the characteristics that will inevitably define Web 3.0.

The reality is that, as things stand, there are only a handful of internet gatekeepers left, including Meta (originally Facebook), Google, and Microsoft. But the decentralized nature of Web 3.0 will mean that users will be able to control the content they create, interact with and share entirely, with data no longer stored in centralized servers governed and operated by one or a few authorities.

Web 3.0 is also grounded in the Semantic Web, a notion where artificial intelligence goes far beyond simple copying and performing repetitive tasks, but understands context and conceptual nuances in such a way that it can store, organize and present data in a fully customized way that suits each unique user. . Algorithms will be able to understand combinations of images, video, text, and audio to organize information and web experiences for specific users. And all thanks to encryption and blockchain technology that does not compromise privacy.

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