Polygon co-founder Jaynti Kanani revealed on Tuesday that he’s been absent from daily work on the project for the past six months, having moved on to “new adventures” after helping launch it in 2017.
“I decided to step back from the day-to-day grind,” Kanani tweeted on Wednesday. The developer said he remains confident in Polygon’s future, and is “bullish on Polygon 2.0.”
That makes Kanani the third of 10 Polygon co-founders to announce their departure this year. And in the crypto industry—although it’s not unique to digital finance—multiple executive departures can be a sign of trouble.
Former Alameda Research CEO Sam Trabucco stepped down last August, three months before FTX’s calamitous collapse. Matteo Liebowitz, Uniswap Labs venture lead, announced his departure last week amid speculation that despite its recent court win, the project isn’t faring well while under SEC investigation. Jesse Powell, CEO and founder of crypto exchange Kraken, stepped down in the middle of backlash over his “anti-woke” sentiments and the company paying the SEC a $30 million settlement. And much has been made about the pace at which Binance and Binance US execs have headed for the exits since the crypto exchange landed in the SEC’s crosshairs.
To be fair, it’s entirely possible that all the departing founders decided to move onto new projects around the same time. But it’s also true that it’s been a punishing year for Polygon.
Polygon Labs did not respond to Decrypt’s request for comment.
Polygon is a layer-2 scaling solution for Ethereum, using a multi-chain ecosystem to enable cheaper, faster, and more private transactions. Its governance token, MATIC, is the thirteenth-largest cryptocurrency by market cap, standing at $5.2 billion, according to CoinGecko.
Aside from being one of Polygon’s ten co-founders, Kanani co-authored the Polygon whitepaper itself, alongside Anurag Arjun, Mihailo Bjelic, and executive chairman Sandeep Nailwal.
Man this makes me emotional. What a ride we’ve had together brother. But its just the start for Polygon, i wish we could’ve done more for longer together in this crazy journey that is Polygon. But hey, you got to do what you got to do.
Lets keep pushing Polygon ahead together,…
— Sandeep Nailwal | sandeep. polygon 💜 (@sandeepnailwal) October 4, 2023
Back in March, co-founder Arjun left the company to work on a modular blockchain spinoff project called Avail. Later, Polygon Labs President Ryan Wyatt stepped down from his role to be replaced by the company’s former Chief Legal Officer, Marc Boiron.
Since its all-time high in December 2021, MATIC has dropped 80% from $2.92 to just $0.56. While seemingly bleak, rival coins—including Cardano (ADA), Solana (SOL), Polkadot (DOT), and Avalanche (AVAX)—have each fallen more than 90% from their respective peaks that year, according to CoinGecko.
Polygon also remains ahead of most competitors in decentralized finance, boasting the fifth-highest total value locked (TVL) compared to other networks at $794 million. One of its competitors in the realm of Ethereum scaling, Arbitrum, stands above it with $1.7 billion TVL.
TVL refers to the value of digital assets currently on a blockchain and has long been the go-to metric by which investors gauge the health of DeFi ecosystems.
Though on-chain metrics appear healthy, Polkadot’s regulatory situation may not be.
Upon suing Coinbase in June, the Securities and Exchange Commission (SEC) named MATIC among a host of tokens it deemed to be unregistered securities listed by the exchange. Others swept up in the controversy included ADA and SOL. Polygon Labs dismissed the SEC’s accusation at the time, noting that it had distributed MATIC to non-US investors.
The company is now planning to transition to Polygon 2.0, an interconnected network of layer-2 chains powered by zero-knowledge technology. The upgrade will transform Polygon’s current MATIC token into POL.