The recent Reddit AMA with Polygon’s co-founder Sandeep Nailwal explores the promising vistas for the crypto-gaming industry. Weaving together Nailwal’s responses with industry facts and figures, it comprehensively analyzes the burgeoning relationship between gaming and the web3 sector.
In the lively labyrinth of the Reddit AMA, Sandeep Nailwal, the co-founder of Polygon (MATIC), painted a grand vision of an opportunistic future for crypto in the gaming sector.
Polygon, an Ethereum (ETH)-based layer-2 network, has been making waves in the gaming sphere with its recent announcement of scalable web3 gaming infrastructures.
While cryptocurrency’s mainstream applications are often confined to trading and payments, Nailwal suggested that gaming might be the real dark horse for blockchain technology.
Gaming, as he aptly put it, “adopts new technology in hoards.” His excitement is palpable as he announced that some top games are launching in web3 in the coming 6-18 months.
Polygon’s grand vision seems to have captivated the investment world as well. Over $2 billion was poured into funding web3 games in the previous year alone. Polygon and its ecosystem partners received a major share of these funds.
Nailwal’s optimism doesn’t end at the intersection of crypto and gaming. According to him, Polygon is currently one of the largest projects and could potentially claim the top spot regarding developer traction across all segments.
He also spoke of Polygon’s ongoing work on innovative solutions in the zero-knowledge (zk) space, which would enable scalability on a monumental scale.
On the decentralized finance (DeFi) front, Polygon houses 417 protocols locking a whopping $982.78 million in value, making it the fifth-largest network by total value locked (TVL), according to DefiLlama.
Bridging gaming and crypto
The synergy between Polygon and the gaming industry is becoming increasingly evident. Polygon Labs and zkMeta recently joined forces to create a dedicated gaming rollup on the Polygon network.
With the South Korean mobile game company launching Delabs Games on the network and the partnership with AQUA, a web3 marketplace for gamers, the gaming ecosystem on Polygon is thriving.
The gaming industry, as a whole, is on a rocketing growth trajectory. A recent study by Zion Market Research estimated the gaming market to reach around $435 billion by 2028, growing at a CAGR of roughly 12.1%.
The “wrapper” phenomenon in crypto
Sandeep Nailwal concurs that centralized applications, such as certain exchanges and yield generators, have unfortunately given crypto a somewhat tarnished reputation.
This is because these applications, which he distinguishes as fintech rather than genuine crypto, are often perceived as integral to the crypto landscape.
They are described as ‘wrappers’ over crypto due to their nature of encapsulating crypto assets while not adhering to the principles of decentralization, transparency, and immutability.
Nailwal emphasizes the need for education among policymakers to understand the difference between these ‘wrappers’ and actual crypto and Defi applications.
Enhancing engagement through NFTs
Nailwal expresses his enthusiasm for using non-fungible tokens (NFTs) as collectible avatars in the Reddit community.
He sees Reddit as a leading big tech company that has successfully harnessed the potential of NFTs to drive user engagement. To further bolster the traction of this initiative, Nailwal suggests additional features such as a secondary marketplace for trading these NFTs and a launchpad for artists to debut their collections.
The balance between web2 and web3
Despite the excitement around the shift to web3, Nailwal does not envision it completely replacing web2. He asserts that there are numerous applications where decentralization, trustlessness, and censorship resistance, the hallmarks of web3, may not be necessary.
However, in domains like finance, gaming, social media, and media in general, where these features can significantly benefit, he predicts a dominance of web3 applications over their web2 counterparts.
Progressive decentralization in crypto
Addressing doubts about the current level of decentralization in crypto, Nailwal accepts that aside from Bitcoin (BTC) and ethereum (ETH), most blockchain ecosystems are not fully decentralized.
He further introduces the concept of “progressive decentralization”, emphasizing that it’s not imperative for protocols and applications to be fully decentralized from the onset. Instead, they should gradually decentralize as they grow in significance.
Nailwal’s responses during the Reddit AMA underscored Polygon’s long-term vision of becoming the “value layer of the internet.”