Polygon? More like Poly-gone. Weeks after spending millions on marketing, Polygon laid over 100 people. This is why:
Polygon announced layoffs of 100+ employees or about 20% of their workforce yesterday.
The reason, according to Sandeep Nailwal, is “consolidation.”
Honestly, this seems like the most PR answer ever
. Sounds like me when I told my mom that my 10th std “consolidated” math grade was still a pass
.
Sandeep said that this “consolidation process” is a way to bring their team under the “Polygon Labs” umbrella.
This is where things get interesting.
• Polygon = The Ethereum sidechain protocol.
• Polygon Labs = Something more complicated.
In the past year or so, Polygon (the company) has gone:
From a Buffett: With a little bit of everything from Italian pasta to Punjabi paneer butter masala on one plate.
To a Subway Sandwich: A tightly packed sandwich with chicken, veggies, and sauces.
Polygon Labs is like a SUB of a buncha divisions like:
1. Polygon Studios – gaming and metaverse biz
2. Polygon Ventures – the investment arm
3. Polygon Foundation – a non-profit organization
You can call this (and I hate this word
) the “institutionalization” of Polygon, where they bring everything under 1 central
name.
Yeah, that’s another word as bad and PR-ish as “consolidation.”
So, where did the money go?
Last year, Polygon raised $450 million in a round led by Sequoia Capital.
Of
that $450 million, Sandeep bhai said Polygon still has:
$250 million
1.9 billion MATIC ($2.6 billion)
This is in the Polygon Treasury
This means, Polygon (the protocol and the “Labs”) spent about $200 million in the bear market and is now laying off employees.
How did they spend so much? 3 reasons:
Ecosystem Fund
Cost: $100 million
Provide funding to devs and buidlers building on top of Polygon.
Venture Fund
Cost: $100 million
Invest in early stage companies.
Marketing Fund
Cost: Unknown
Partnerships with a bunch of web2 + web3 brands, like:
• Nike’s SWOOSH NFT marketplace
• Starbucks’ Odyssey NFT rewards program
• Solana’s top-2 NFT collections – y00ts and DeGods – moving to Polygon
I dunno how much these were worth, but it’s def not cheap to bring such huge names to Polygon
Doodhwala’s take:
This whole corporate consolidation thing has gone over my head just like a physics lecture
But the ecosystem and venture fund bit is a little crazy tbh.
Spending $200 million on – ecosystem projects + venture bets – is A LOT. Especially in the
market.
Spending a huge [but unknown] amount on brand and marketing partnerships is a lot too.
Even with these layoffs, Polygon looks
from the outside. But, as the doodhwala’s Bumble bio reads – it is what's on the inside that matters
And inside Polygon is “consolidation”.
What do you think of Polygon's "consolidation"? Let me know in the comments.
Read the full newsletter here:
Reasons behind Polygon's layoffs | Doodhwala