Slumdog billionaire 2: ‘Top 10… brings no satisfaction’ says Polygon’s Sandeep Nailwal
Read Part 1 here: Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal
Growing up in poverty in a Delhi ghetto with an alcoholic father and an illiterate mother, Sandeep Nailwal has always had a fire in his belly to achieve something better.
He wants to go big or go home — middling success is not an option.
“I am not doing something small,” he tells Magazine. “Okay, we build some network, and it has a token. It does well for one cycle and then fades into the dawn, and I make a few million dollars for myself and retire or whatever — this was not the plan.”
“We were very clear that we will build this, we will grow the community, and we’ll make it one of the biggest projects in the space.”
And that’s why, in his mind, Polygon — formerly Matic Network — is yet to truly succeed, despite nudging a $19-billion market cap at one point and joining the top 10 cryptocurrencies by market capitalization (it’s currently No. 13 with a $6-billion market cap).
“Being in the top 10, top 15 projects brings no satisfaction to me. It’s very clear in my mind that I want Polygon to have that kind of impact which Ethereum and Bitcoin have had. We have to go to the top three projects in the space. And that’s only when I would say that ‘OK Polygon has made it.’”
Part 1 of this feature told the story of Nailwal’s rise from grinding poverty to going all-in on Bitcoin with $15,000 he’d borrowed to fund his wedding and the difficult early days of Matic Network, where the threat of running out of funds was ever-present.
By mid-2019, Matic Network had raised $5 million in a Binance initial exchange offering to keep itself afloat and had launched the alpha version of its Ethereum layer-2 sidechain. But it was slowly becoming clear that the Plasma technology it was pursuing was not the answer the market was looking for.
Ideas around scaling had begun to change, and Plasma’s shortcomings (TLDR: complicated, better at transferring assets than running smart contracts) had seen it lose favor. Seeing which way the wind was blowing, the research-oriented Plasma Group decided to ditch the framework altogether in favor of building an Optimstic rollup and renamed the project “Optimism” in early 2020.
But the Matic Network white paper had outlined a Plasma-based solution with fraud proofs and a proof-of-stake checkpoint layer, and the team was determined to follow through and build it in 2019 and 2020, despite waning interest in the tech.
Mainnet market crash and resurrection
Just as the project was gearing up to launch its mainnet in May 2020, a worldwide pandemic and the March Black Thursday market crash intervened. Around 70% was wiped off the already paltry sub-3-cent price of MATIC within the space of 10 days. With fears of a new Great Depression gripping the world, Matic Network’s future again looked in doubt.
“Suddenly, everything felt like it will go to zero. That shock was there for two to three months. We survived that, but what we realized is that, you know, we started with Plasma technology, and now plasma is dead. And now we are launching our mainnet. People are, like, ‘Plasma is dead; there is no interest from the community.’”
Nailwal says the team came to two conclusions.
The first is they’d try and get as many developers and builders as possible. This was a success, as they launched their Ethereum layer 2 just in time for DeFi Summer’s ludicrous gas fees on layer 1.
The second conclusion was to never again put their eggs in one basket.
“We realized that we need to be multichain; we can’t be relying on one particular technology,” he says.
Long-term Ethereum community insider Mihailo Bjelic was also thinking about a multichain future and joined the project to become something of a bridge to markets and communities from which the team felt excluded at the time. Nailwal says the project’s roots in India meant it had a low profile in the Western world, where some considered it to be “just like another internet scam.”
Also read: Beyond crypto — Zero-knowledge proofs show potential from voting to finance
In early 2021, Matic Network rebranded as Polygon to highlight the change in direction. At the time, Nailwal told Cointelegraph the idea was to become “Polkadot on Ethereum” and to add Optimistic rollups, zero-knowledge (ZK) rollups and StarkWare-style Validiums alongside the PoS network.
But Nailwal says they quickly realized that Optimistic rollups were at best an “intermediate solution” that wouldn’t be able to scale up to have 50 chains working in the ecosystem.
“With ZK, you can imagine a world with […] 100,000 chains; each of them has 1,000 transactions per second (TPS); all of them combined together could be tens of millions of TPS in the whole network. And the architecture will still survive and keep scaling.”
“Infinite scalability, unified liquidity and that is the main point for why we bet on ZK because ZK is the endgame for blockchain scaling.”
Polygon bull-run fever
At the dawn of 2021, MATIC’s market cap was just $87 million. By mid-year, it had surged to almost $14 billion, and it was nearly $19 billion by year’s end. That’s in no small part due to its surging user numbers and ability to scale Ethereum.
At the end of 2020, it had fewer than 1,000 daily active users, but by October that year, it had surpassed Ethereum for the first time with 566,000 users in a day and had flipped ETH’s daily transactions, too, thanks to high gas fees on the L1.
Suddenly, the founders were very wealthy individuals, and the project itself had the funds to embark on a major acquisition spree.
In August, it snapped up the entire Hermez network for 250 million MATIC. The project became Polygon Hermez, an Ethereum Virtual Machine-compatible ZK solution focused on decentralization and a proof-of-efficiency consensus.
In December, it spent another $400 million in MATIC to buy the Mir team of ZK-proof experts to build Polygon Zero (ZK recursive scaling). And the acquisitions kept coming.
“We reached out to all of them. We said, ‘You want to work with us?’ And I think at that point in time, whatever was like number three, number four, number five, like we acquired all of them, because number one, number two did not come with us. (But) the talent in number three, four, five teams is super, super good.”
The venture capital seemed to think the new plan was a winner, with Polygon raising another $450 million in early 2022, selling MATIC tokens in a raise led by Sequoia Capital India and including Tiger Global and Softbank Vision Fund.
The advantages of having multiple teams taking different approaches became pretty clear.
“We initially kept them completely autonomous so they could pursue their own research, and they collaborated with each other. Due to that collaboration, suddenly, we got a ZK EVM, which people have thought is four or five years away.”
Read also
He says the ZK EVM took just 12 months to develop “because of the cross-pollination of ideas between these teams.”
Other ZK flavors developing under the Polygon umbrella include Miden (a StarkWare-like system with its own virtual machine) and Nightfall (Optimistic rollups meet zero-knowledge cryptography).
Bets each way on ZK, JavaScript is for midwits
The other big advantage of having multiple teams building different solutions is it doesn’t force Polygon to make the same hard choices other projects have had to make.
For example, StarkWare is betting that the additional performance provided by its Cairo virtual machine will make up for the fact that it’s much harder to port existing Ethereum projects over to StarkEx.
Most of the other projects — zkSync, Linea, Scroll, etc. — are making the opposite bet that less performance but easier compatibility with the Ethereum Virtual Machine will attract projects and see their solutions win market share.
Polygon is the only team with bets each way, with Polygon Miden following StarkWare with a ZK-optimised virtual machine. For his part, Nailwal thinks EVM will win in the short term, but other solutions will come into their own in the years ahead.
“I almost feel like EVM is like JavaScript right?” he says. “I remember when I was in first or second year of my engineering college… JavaScript was considered to be a programming language of the midwits! But today, JS is everywhere; maybe 80% of the web is powered by JavaScript. So, EVM kind of has those effects no matter how much you say, ‘These are the problems.’”
Nailwal adds, however, “Our plan is a 10-year-long plan. So, we have the ZK EVMs, we have Polygon Zero, but we also have Polygon Miden, which we believe is highly performant, has privacy features inbuilt […] and it will support all the programming languages.”
Miden founder Bobbin Threadbare told Magazine earlier this year that the Miden VM will enable users to do things like run high-quality video games and generate ZK-proofs on their home PCs they can send into the network.
“What they are doing, it gives me goosebumps,” Nailwal says. “But Miden will start blossoming in around one year. By that time, we, as the Polygon community, need to win the ZK EVM.” He hints that a new token and airdrop are being considered to help with this.
Ethereum upgrades to turbocharge Polygon L2s
Ethereum’s next big upgrade, EIP-4844, which is supposed to happen sometime before the end of the year, introduces proto-danksharding to make life easier for rollups, which Nailwal says is welcome but not a game changer.
“I think some estimates were saying up to 200–300 TPS only for the rollups. So, not a huge advantage, but it’s going to reduce the (gas) cost of the transactions.”
Full danksharding, which is “several years away,” according to the Ethereum Foundation, however, will multiply that improvement by the number of shards, currently expected at around 64.
“So, you can imagine that 64 multiplied by 200. So, there will be, like, you know, 12,000 TPS, all the rollups can support.”
In June this year, the project unveiled its Polygon 2.0 roadmap to become the “Value layer of the internet.” The vision is for a network of ZK-powered L2s that will seem like using a single chain to users thanks to a cross-chain coordination protocol. Builders can knock up their own ZK-powered L2 chain in a flash using Polygon’s Chain Development Kit.
The existing PoS blockchain will become a Validium, which is one approach to dealing with the data availability problem of how to affordably store stuff on Ethereum.
The roadmap will also see MATIC tokens upgraded to a new token called POL (short for Polygon) and introduce the controversial concept of restaking, which enables token stakers to earn additional rewards by helping secure other networks.
“The POL token is basically the hyper-productive, third-generation token. You can validate on multiple chains, and you can validate for multiple roles: You can be an aggregator, you can be a sequencer, you can be a data availability provider, and you can be a prover. So, with the same token, you can actually stake on multiple layers.”
Restaking is controversial in the Ethereum community, with critics arguing it could turn into an unstable house of cards. But Nailwal says POL will be natively integrated into the ecosystem rather than added by third parties on top, as with Ethereum’s EigenLayer, which will mitigate the risks.
“With Polygon, risk-taking is more enshrined in the protocol; this is part of the protocol; this is how the protocol behaves,” he says.
“If you’re a validator and you are running 100 chains, and of those 100 chains you falter or you do fraud on one chain, you get slashed from all of them,” he continues, adding he’s not sure EigenLayer could implement that — “especially when they are building on top of something.”
“I think there are a lot of nuances where ours is much simpler and easier to do.”
Polygon 2.0 is like the internet of money
For Nailwal, the ultimate aim of Polygon 2.0 is to evolve crypto networks in the same way the internet evolved. The forerunner of the internet was ARPANET in the 1970s, then the invention of TCP/IP in 1983 allowed multiple networks to connect, forming an inter-network, which grew into the internet thanks to additional technologies like the Domain Name System and the World Wide Web.
“It’s interconnectivity of all the networks,” he says. “This is exactly what you see is happening on blockchains.”
“It’s very hard to move your money trustlessly from one chain to another; you use these bridges, which get hacked all the time. That’s why Polygon 2.0 is not only about having infinite scalability […] But it should also make sure that that value that is being created on these hundreds of thousands of chains also is connected and seamlessly movable.
He says the interoperable layer will enable value to flow between L2 chains, as well as Ethereum and potentially other layer-1 chains as well in the future if they join in.
“So, with this Polygon 2.0, we can achieve the same characteristics as the web has,” he says. “The Web3 network, whichever will win, should have infinite scalability and seamless transfer of value between these chains.”
“That’s why Polygon 2.0 architecture has got a lot of critical acclaim.”
Read also
Future for Polygon and Sandeep Nailwal
Even as the founder of a multibillion-dollar blockchain and living in luxury in Dubai, Nailwal still feels unsatisfied, as if he has yet to make the impact he feels he should. He looks up to world changers like Mark Zuckerberg, Satoshi and Vitalik Buterin — “a truly remarkable man.” So, mere wealth is not enough. He wants to make a lasting impact.
“I’ve never felt that Polygon has made it,” he says. “That part is very relentless in my mind, like there is no middle ground like this.”
“I think Bitcoin, Ethereum only can say that they have made it — nobody else, no other protocol can say that they’ve made it; they can die in a matter of six to 12 months.”
So, Nailwal won’t be happy until the Polygon ecosystem truly deserves to stand along Bitcoin and Ethereum as the bedrock of the entire industry
“We have to go to the top three projects in the space,” he says.
Read Part 1 here: Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal
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Employees who were furloughed during the US government shutdown are expected to return to work at the Securities and Exchange Commission and Commodity Futures Trading Commission after 43 days away.
According to the operations plans with the SEC and CFTC, staff are expected to return on Thursday, following US President Donald Trump’s signing of a funding bill late on Wednesday to resume federal operations.
The two agencies’ respective plans require employees to come in on the “next regularly scheduled workday […] following enactment of appropriations legislation,” which acting CFTC chair Caroline Pham appeared to confirm in a Thursday X post.
Amid the government shutdown, both agencies had fewer staff and reduced operations. In the SEC’s case, this limited its ability to review applications for exchange-traded funds, including those tied to cryptocurrencies. The CFTC’s plan said it would “cease the vast bulk of its operations,” including enforcement, market oversight and work on regulatory rulemaking.
With the reopening of the government, however, the SEC and CFTC may need some time to catch up on activities, such as reviewing registration applications submitted in the previous 43 days. Some companies submitted IPO and ETF applications amid reports that the shutdown would likely end soon.
“I’m sure some [companies] took the position that they could just submit [an application to the SEC] knowing it’s not going to be looked at until they get back, but at least they’re in the queue,” Jay Dubow, a partner at law firm Troutman Pepper Locke, told Cointelegraph.
He also warned of the possible ramifications of the SEC going through repeated shutdowns:
“Every time you go through something like this, there’s the risk of things just slipping through the cracks in various ways.”
Related: Last US penny minted shows why savers need Bitcoin
During the shutdown, officials with both financial regulators regularly spoke at conferences on their approach to cryptocurrencies, sometimes commenting on their availability and addressing the reduced operations.
“Within limits, we’re still obviously functioning,” said SEC Chair Paul Atkins on Oct. 7, less than a week into the lapse in appropriations. “There are restrictions on what we can and can’t do, especially for staff […] I can still come and do things like this [referring to the conference].”
Before the funding bill had been resolved, Akins said that the SEC planned to consider “establishing a token taxonomy” in the coming months, “anchored” in the Howey test to recognize that “investment contracts can come to an end.” Pham, similarly, said the CFTC had been pushing for approval of leveraged spot cryptocurrency trading as early as December.
Prospective CFTC chair scheduled for Senate hearing
Michael Selig, who serves as chief counsel for the SEC’s crypto task force, is scheduled to appear before the Senate Agriculture Committee on Wednesday as part of Trump’s push to have him confirmed as the next CFTC chair. Though the hearing could likely have moved forward amid the shutdown, Selig’s authority with the agency, had he been confirmed, would have been severely limited.
Pham is expected to leave her position as acting chair should the Senate confirm Selig. However, even if he were to be installed quickly, the CFTC would still face a dearth of leadership, with only one Senate-confirmed commissioner out of the usual five.
Magazine: 2026 is the year of pragmatic privacy in crypto: Canton, Zcash and more
The United Kingdom needs to regulate and encourage the development of British pound stablecoins to keep the country’s financial services sector globally competitive, according to Mark Fairless, the group CEO of bank infrastructure and fintech company ClearBank.
“Stablecoins are a logical extension to reduce friction in international global payments,” Fairless told Cointelegraph in an interview at Web Summit 2025 in Lisbon, Portugal.
He said that pound stablecoins will never equal the market capitalization of dollar or euro-denominated tokens because it isn’t a global reserve currency.
However, the UK needs a British pound stablecoin to remain commercially competitive as the world shifts to onchain finance and internet capital markets, Fairless said. He told Cointelegraph:
“From a capability perspective for the UK, the ability to settle payments internationally in real time requires a GBP stablecoin, and if we don’t have one, we risk falling behind other financial sectors.
“The financial services market in the UK is one of our strongest parts of the economy, and so, stablecoins are a logical place to go next,” he said, adding that the effect of stablecoins on the banking sector and traditional business models remains to be seen.
Stablecoins have become geostrategically relevant as governments respond to growing pressure to place their fiat currencies onchain to remain competitive with countries that integrate digital and blockchain rails into their economies.
Related: Bank of England’s Breeden warns watered-down stablecoin rules risk stability
Bank of England vows to keep pace with the US on stablecoins
Sarah Breeden, deputy governor for the Bank of England, the UK’s central bank, said the country will keep pace with US stablecoin regulations and work closely with international partners to synchronize regulatory efforts.
Breeden also urged a cautious approach and warned against loosening stablecoin regulations to the point where the asset class poses a systemic risk to the banking sector.
The Bank of England published a consultation paper on Monday outlining a proposed regulatory framework for stablecoins in the UK.
The proposal included potential reserve requirements, asset taxonomy, and risk management regulations for stablecoin issuers and is open for industry feedback until February 2026, with finalized regulations expected in the second half of the year.
Magazine: Unstablecoins: Depegging, bank runs, and other risks loom
Key takeaways
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The Fed’s Dec. 9-10 meeting carries unusual weight as markets wait to see whether another rate cut will arrive before Christmas, shaping bonds, equities and crypto.
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After two cuts in 2025, rates now sit at 3.75%-4.00%. Labor weakness and softer inflation support further easing, but officials remain divided because inflation risks have not fully cleared.
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A cooling job market, easing inflation and the end of quantitative tightening could justify another reduction and align with year-end liquidity needs.
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Sticky inflation, gaps in economic data caused by the government shutdown and a divided Fed may push policymakers to keep rates unchanged this December.
When the US Federal Reserve meets on Dec. 9-10 to decide on interest rates, it will not be just another routine gathering. Markets are watching closely to see what direction policymakers choose. Will the Fed cut rates again before the holidays? A pre-Christmas Eve reduction could send waves through bonds, stocks, credit markets and crypto.
This article explains why the Fed’s pre-Christmas meeting is significant and outlines the factors supporting or opposing a potential rate cut. It also highlights what to watch in the coming weeks and how a Fed move could affect crypto and other financial markets.
The background of a December rate cut
Central banks typically cut rates when inflation is easing, economic growth slows or financial conditions become too tight. In late October, the Federal Reserve lowered rates by 25 basis points, setting the federal funds target range at 3.75%-4.00%, its lowest level since 2022. The move followed another 25-basis-point cut in September 2025, making it the Fed’s second rate reduction of the year.
The move came amid clear signs of a cooling labor market. October recorded one of the worst monthly layoff totals in more than two decades, according to multiple labor-market reports, reinforcing concerns about weakening job conditions. The Fed’s October statement echoed this trend, noting that risks to employment had increased even as inflation remained somewhat elevated.
At a press conference, Fed Chair Jerome Powell stressed that a December cut is “not a foregone conclusion.” Yet economists at Goldman Sachs still expect a cut, pointing to clear signs of labor market weakness. Fed officials remain divided, with some emphasizing inflation risks and the limited room for further easing.
A December rate cut is possible, but it is not guaranteed.
Factors supporting a potential rate cut
There are several reasons the Fed may decide to cut rates:
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Cooling labor market: Private sector data shows softer hiring, rising layoffs and a slight increase in unemployment.
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Moderating inflation: Inflation is still above target but continues to trend lower, giving the Fed more flexibility to ease policy.
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Ending quantitative tightening: The Fed has announced it will stop reducing the size of its balance sheet beginning Dec. 1.
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Pre-holiday timing: A rate cut would align with year-end liquidity needs and help set expectations for 2026.
Arguments for the Fed to postpone action
Several factors suggest the Fed may delay a rate cut in the near future:
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Sticky inflation: According to the Fed’s latest statement, the inflation rate remains “somewhat elevated.”
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Data vacuum: The US government shutdown has delayed key employment and inflation reports, making policy assessments more difficult.
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Committee division: Federal Reserve officials are split on the appropriate path forward, which encourages a more cautious approach.
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Limited room for easing: After multiple cuts this year, some analysts argue that policy is already close to a neutral level.
Did you know? In March 2020, the Fed cut interest rates to near zero to respond to the COVID-19 crisis. It lowered rates by a total of 1.5 percentage points across its meetings on March 3 and March 15.
What to monitor before December
These factors are likely to shape the Fed’s upcoming policy decision on rate cuts:
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Nonfarm payrolls and unemployment: Is the job market continuing to slow?
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Inflation data: Any unexpected rise in inflation will reduce expectations for policy easing.
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Financial conditions and market signals: Are credit spreads widening, and is overall market liquidity tightening?
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Fed communications: Differences of opinion within the Federal Open Market Committee (FOMC) may influence the outcome.
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External shocks: Trade developments, geopolitical risks or sudden supply disruptions could shift the Fed’s approach.
Did you know? US stocks have historically returned about 11% in the 12 months after the Fed begins cutting rates.
How a Federal Reserve cut may impact crypto
Fed rate cuts increase global liquidity and often push investors toward riskier assets like crypto in search of higher returns. Bitcoin (BTC) and Ether (ETH) tend to benefit from stronger risk appetite and rising institutional inflows. Lower decentralized finance (DeFi) borrowing rates also encourage more leverage and trading activity. Stablecoins may see greater use in payments, although their yield advantage narrows when rates fall.
However, if a rate cut is interpreted as a signal of recession, crypto may experience equity-like volatility. Markets might see an initial boost from easier liquidity, followed by a pullback driven by broader macro concerns. If global financial conditions loosen instead, the environment could support further crypto demand.
Lower borrowing costs make it easier for people and institutions to take investment risks, which can draw more interest toward digital assets. As more money flows into the sector, crypto companies can build better tools and services, helping the industry connect more smoothly with the rest of the financial system.
Did you know? When the Fed cuts rates, short-term bond yields usually fall first, creating opportunities for traders who track movements in the yield curve.
Consequences of a Fed rate cut on other financial sectors
Here is a look at the potential effects on major asset classes if the Fed cuts interest rates:
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Bonds and yields: Short-term yields will likely decline as markets adjust their expectations. The yield curve may steepen if long-term yields remain stabler than short-term ones, which can signal confidence in future growth. If the cut is viewed as a sign of recession risk, long-term yields may fall as well, resulting in a flattening or even an inversion of the curve.
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US dollar and global FX: A rate cut generally weakens the dollar because interest rate differentials narrow. This often supports emerging markets and commodity-exporting countries. If the cut is driven by concerns about economic growth, safe-haven demand may temporarily push the dollar higher.
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Equities: A pre-Christmas Eve rate cut could spark a rally in US stocks if investors see it as a sign of confidence in a soft landing. A soft landing refers to cooling inflation alongside a stable labor market. If the cut is motivated by growth worries instead, corporate earnings may come under pressure, and defensive sectors could outperform cyclical ones.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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