One of India’s first crypto billionaires: Polygon joined the industry only because of a book

SmartDeer

2023-11-17 21:00

Read this article in 14 Minutes

AI summary

View the summary

Original author: Emily (@cl_lyt), SmartDeer

Interviewee: Anurag Arjun (@anuragarjun), Founder of AvailProject and Co-founder of Polygon

"If you had a million dollars and someone asked to borrow money from you, would you lend it to them? If this person is your good friend and you know them well, you might lend it to them. But if this is just the 50th person you've met this year and you don't know them well, would you consider lending it?" When answering how to popularize blockchain, Anurag Arjun, co-founder and chief product officer of the blockchain project Polygon, asked me this question. Polygon is one of the top ten blockchain public chain projects by market capitalization, and Anurag is one of India's first crypto billionaires. (Note: According to Polygon's recent market capitalization, Anurag is now a millionaire.)

My answer may be the same as many others in the encryption industry - I probably wouldn't borrow.

After hearing this expected response, Anurag smiled and continued to explain that there is a trust issue at play here. If you don't know someone and can't trust them, you naturally wouldn't lend them money. However, in reality, when people deposit money in a bank, that money is also lent out by the bank to someone you don't know and don't trust.

And the distributed storage and accounting characteristics of blockchain can allow you to get rid of roles like banks, and achieve interactions between individuals without the need for trust, creating a "trustless world" where everyone can see everything that happens on the chain.

Establishing a Trustless World is the belief that Anurag has held since he entered the blockchain industry in 2017. Polygon (formerly known as Matic Network) is Anurag's first entrepreneurial project in the blockchain industry, with a current market value of approximately $7 billion, and he himself is also listed as one of India's first crypto billionaires.

Born into a middle-class family and now possessing billions of wealth, Anurag did not choose to "lie flat" and "enjoy life", but instead chose to start from scratch again and develop his new project Avail. Avail is a modular blockchain project with a focus on data availability, aimed at providing developers with the ability to build customizable and scalable applications.

If Elon Musk's ultimate goal is to promote human progress through energy transformation and interstellar exploration, then Anurag's ultimate goal is to build a decentralized and trustless world. He believes that Web3 technology based on blockchain will change some existing operational logic in the future, just like the Internet changed people's way of life.

One-night reading of "Mastering Bitcoin"

In 2017, Anurag embarked on his second entrepreneurial journey. At that time, he did not have a complete understanding of blockchain technology, and his business direction was to provide financial technology solutions based on cash flow for loans and Goods and Services Tax (GST) related services.

In the shared workspace, he met Jaynti Kanani, who was also just starting a business. The two young people had similar technical backgrounds, experience in the financial technology industry, and shared the dream of entrepreneurship. They hit it off immediately, exchanging their respective entrepreneurial ideas and discussing the possibility of collaboration. "At the time, he wanted me to invest in his company, and I wanted him to invest in my startup."

Jaynti's entrepreneurial direction is centered around blockchain technology, providing expansion and infrastructure for existing blockchain networks. At that time, Jaynti had already earned some income through cryptocurrency and believed that this was a very promising field.

This is not Anurag's first encounter with the concept of blockchain. A year before meeting Jaynti, the central bank of India asked Anurag's team to research the possibility of using blockchain for interbank reconciliation to prevent loan fraud using the same proof to borrow money from two different banks. However, before Anurag could report his findings, the project was halted by the central bank.

These two mutually appreciative individuals were once in a stalemate, and no one could convince the other. However, the breaker was a book - "Mastering Bitcoin". This book is widely regarded as the authoritative guide to learning about Bitcoin and blockchain technology. It provides a detailed introduction to the working principles and history of Bitcoin, as well as its underlying technologies, including blockchain, encryption, and the decentralized nature of the Bitcoin network.

Anurag stayed up all night after receiving this book: "I still remember finishing the entire book in one night."

Before reading this book, Anurag only knew that blockchain could be used for cross-institutional accounting. However, this book made him understand that it is a technology that does not require any centralized institutions and is a thorough innovation: "For me at the time, Bitcoin was like magic, cleverly combining cryptoeconomics and cryptography. In this system, you don't need to fully trust a single individual, but rely on a permissionless network composed of numerous participants. These participants join the network, run nodes, run mining software, and actually maintain the network."

Polygon's three founders, Anurag is on the left

"Before that, no technology could run without a trusted entity," Anurag believes that the technology behind Bitcoin is very clever, and its significance in the reality of the 2008 financial crisis is crucial. "After reading this book, I feel that there is infinite potential in this technology, which also became the opportunity for me to enter the industry."

Shuttle between bull and bear markets to create products

Anurag joined Jaynti to co-create Polygon (formerly known as Matic Network) in 2017. That year, the cryptocurrency market was in a bull market, with Bitcoin rising from less than $1,000 at the beginning of the year to a high of nearly $20,000, becoming a wealth code for some traders. Countless young people who hoped for financial freedom came one after another, and trading was booming: "At that time, many people were trading 24 hours a day, while our team was one of the few who focused on writing code."

When asked why he didn't become a trader, Anurag admitted that he wasn't good at trading. He had traded for 6 months in the traditional financial market and lost money. Since entering the blockchain industry in 2017, he hasn't bought much cryptocurrency and has focused more on investing in startups: "I am more concerned about the products and technology themselves, that is, how to increase the usability of blockchain technology."

If the birth of Bitcoin made decentralization possible, then the birth of Ethereum enriched the decentralized ecosystem. Bitcoin is a simple accounting network, while Ethereum provides developers with the foundation to create and run decentralized applications. Polygon is created on the basis of Ethereum, aiming to solve the main problems of high transaction fees and slow processing speed on the Ethereum network.

This sounds very practical, and now it has indeed incubated many projects. However, at the beginning of the entrepreneurship, they were an Indian team that was unknown and not trusted. At that time, the mainstream of the encryption community's impression of the Indian team was "scam projects that cut leeks", and no major investment institutions were willing to invest in the team. Their first funding came from family and friends, only 200,000 US dollars.

To make matters worse, in the second year of entrepreneurship (2018), the cryptocurrency market entered a bear market, making it even more difficult to raise funds.

"We approached over seventy investors, but not a single one was willing to invest in us," recalled Anurag. "Finally, we managed to find one investor who was willing to invest, and we even followed him to his vacation spot. However, the next day, Bitcoin suddenly dropped to $3,000, and the investor immediately withdrew his investment commitment."

This may be the toughest year for Polygon. At its worst, the company couldn't even pay its employees' salaries for the next month. Anurag wasn't afraid of the bear market, but he was afraid of "letting down the great team he had assembled." In the end, a friend in the cryptocurrency industry lent the team $50,000 to "save" them.

Funding is not the only problem. It is not easy to attract developers to enter the ecosystem because of anonymity. As the founder, Anurag personally went to help developers in the ecosystem solve bugs, even if the underlying code of their projects was not written well: "At that time, there were probably hundreds of such communication groups that helped developers. As long as the other party was slightly interested in our network, we would contact them and provide support personally."

Due to users from all over the world, this type of customer service work is extremely time-consuming, almost every day from early morning to late at night. Anurag doesn't feel tired because the team needed users very much at that time: "We could have done a 9-to-5 job, but this is the path we chose for ourselves."

This down-to-earth and approximate strategy helped Polygon accumulate initial users. Until the end of 2020, Anurag was still personally answering user questions, jokingly saying "perhaps because we are Indians".