The crypto market may be in limbo between a deep bear market and recovery, but that hasn’t stopped investors from deploying capital into the space.
“In a sense, bear markets are arguably good for the industry,” Shreyansh Singh, head of investments at Polygon, said to TechCrunch. “They allow platforms with a clear long-term vision and a sustainable model to continue building new solutions and help weed out projects that perhaps rely on the hype too much.”
Polygon is one of the better-known layer-2 blockchains building on Ethereum, with about 37,000 decentralized applications (dApps) launched on its chain. It’s home to some of the biggest web3 projects like Uniswap V3, OpenSea and Aave.
In April, Polygon launched a $100 million ecosystem fund to help web3 developers build on its network. A month later, Polygon launched an “uncapped” fund to help projects built on the now-defunct Terra ecosystem migrate to its blockchain. Safe to say, the blockchain and the team behind it have been busy.
Over 50 projects have begun migrating from Terra to Polygon’s ecosystem, including the NFT marketplace OnePlanet and NFT game Derby Stars.
“In the grand scheme of things, nothing has changed regarding Polygon’s long-term mission, bear markets or not,” Singh said. “We continue to actively invest in a wide array of projects and initiatives to help the industry evolve and flourish.”
There is a lot of capital available for deployment through entities like the ecosystem fund and a $100 million internal venture capital fund, Singh noted. Polygon’s top focus is on scaling Ethereum — which it plans to do through a number of avenues, including its $1 billion commitment to zero-knowledge scaling efforts (which, in simple terms, is a way to prove verification between two parties without disclosing too much information).
Outside of Polygon, a number of massive crypto funds have materialized, showing signs of long-term investors holding steady in this space.
Earlier today, CoinFund launched a $300 million web3 fund to focus on early-stage startups. Last week, LongHash Ventures announced its second fund for $100 million to support web3 infrastructure. Cryptocurrency prices might still be weak, but venture funding is holding strong.
In recent months, we’ve also seen a number of traditional conglomerates like Meta and BlackRock team up with crypto-focused firms to bring products to their customers. Even from a sports and retail standpoint, companies like Gucci, FC Barcelona and Adidas have embraced the web3 world.
Although there has been progress, “there is a persisting gap between decentralized and ‘legacy’ platforms that need to be addressed for the internet to evolve,” Singh said.
Even amid bearish market conditions, there’s a strong shift of talent from Web 2.0 to web3, but traditional companies need to embrace this new technology, Singh said.
“[There’s] a strong interest from both users and businesses to leverage the technology,” Singh said. “As the community builds through the bear [market], we are excited about new technologies and applications as well as onboarding of new users and businesses into web3.”
So what’s the long-term takeaway from Polygon? It’s “highly bullish on web3 overall.”
“We all are still underestimating the impact web3 will create; new use cases that we have not even imagined will keep coming up and create massive impact,” Singh said. “Our financial support of new and existing projects continues as usual.”