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My Concern About Polygon/ MATIC: Uncanny Similarities With FTX

Validated Individual Expert

I was never impressed by Polygon as one of DeFi/blockchain players. I’ve used the chain multiple times, and unimpressed with its… everything. Speed, UX, they got none. I have done yield farming, minting NFTs, and simply swapping crypto-assets and most of the time, Polygon has always been providing unpleasant experiences.

When I began activating my Polygon wallet, immediately I got sent scam coins. I’m sure many of you DeFi players can relate to this. I believe the chain is where I ever get rugged for the first time too.

So my lack of interest in MATIC and Polygon is almost natural. It is the reason why I rarely write about it on my blog — if never. But lately, something about Polygon attracted my attention, and it’s not in a good way.

Business dev or spray and pray?

2022 is regarded by Polygon as an accomplished year for the team. The reason is, they succeeded to form partnerships with several big Tradtech companies and other non-crypto entities. I bold the words so you will remember later, why specifically I emphasize their ‘norminess’ here.

Some of those partnerships include Starbucks, Reddit, Meta, Stripe, Disney, and Nike. The form of partnership range from NFTs to payment systems, like the one with Stripe.

Impressed? You would call it genius biz dev, as many others in the crypto community did.

But I call it reckless bizdev spray and pray.

Why? Because polygon tech is actually crap I’m concerned.

What if this spells disaster for the whole industry?

Polygon is probably the worst chain among major L1s

It cannot handle a bit more traffic even during normal times. Even more so in high-traffic moments, such as during the launch of a play-to-earn game whose title I could not remember. You don’t need to compare tx/second with other chains to understand because just based on experience, you can feel how frustratingly slow the chain is.

Polygon slowness is common knowledge in the industry.

I suspect this is the reason why Lens Protocol, a decentralized social media that was built on Polygon by the AAVE team still can’t accept a lot of users despite having officially launched. It’s been months and this is what I get every time I checked if I can make an account.

Just think about it. In times when people are seeking Twitter alternatives — because their CEO went crazy — Lens was way behind Mastadon and the likes to grab the available market share. Such a wasted opportunity.

Just like with FTX, it’s always the normies who fall for their ‘charm’

As a crypto native who are aware of Polygon's capability, it’s so weird seeing these companies flock to work with Polygon. Why aren’t they aware that there are better opportunities out there? For me, it doesn’t make sense. It’s not worth even a peanut to launch your web3 business on Polygon. High chance it will meet a lot of troubles and limitations later on.

Have these partners even tried to use the Polygon chain themselves?

This begs a certain suspicion. What if the Polygon team is not exactly honest with the chain’s capability, and its liability?

I doubt they disclosed the tech debt they had when they do their presentation.

Polygon has an unsavory history of misleading people by marketing itself as a Layer 2 of Ethereum (it isn’t a layer 2!) Polygon is a chain on its own, but for so long they latched onto Ethereum, even having the promoter/influencers that were Ethereum maxi too (*Cough* Bankless.) These maxi influencers, who supposedly adhere to Ethereum purity value, for some reason made an exception for Polygon.

I have not even begun to tell you about the multi-sig issue. This is an old FUD, but was never really addressed.

Polygon has a big centralization risk.

Here comes the first uncanny similarity I spot between FTX and Polygon. With FTX, it’s unsecured loans. With polygon, it’s a huge tech debt. Different things, same vibe. Same larping, as in presenting themselves as something they are not.

The second similarity is how both FTX and entities managed to attract ‘normies’ entities despite their reputation among the crypto native community. Their infamy is not much known in the real world. Credibility is gained by marketing alone, without any substance to back it up. In both cases, the investors and partners left a huge step in their due diligence.

The next similarity is their valuation. Just like FTX, Polygon is highly overvalued, having a market cap of 8 Billion. It’s way higher than DAI, and other L1 alternatives like Solana, Avalanche, and Cosmos. Perhaps this is one of the reasons these companies find Polygon attractive.

So, what is the risk? The worst case?

First of all, the industry is at risk of embarrassing itself once again. At this point, we really can’t afford that.

Not after the multiple failures and collapses we got in 2022.

What if it is finally unraveled, that Polygon doesn’t have what it takes to onboard millions of users Meta has?

Technical failure is one thing, but it can be significantly worse if it involves users losing money as well. My biggest concern is that particular partnership with Stripe. Cross-border payment is stressful already without wondering why your transaction doesn’t go through because the Polygon network is overloaded.

Although Polygon fail won’t be as spectacular as FTX collapse, I don’t think this space would benefit from another mishap.

Perhaps Polygon's intention was good, as to promote blockchain use case to the wider audience. But it’s wise to not be so reckless and promise something they can’t attain.

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