NFTs Fizzle Out, What’s Next for Polygon’s Growth Strategy?

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In less than a year of its launch, Meta decid­ed to pull the plug on their NFT ven­ture. Last week, Head of Com­merce and Finan­cial Tech­nolo­gies at Meta, Stephane Kas­riel, announced that the com­pa­ny will wind down its NFT plat­form on Face­book and Insta­gram. The com­pa­ny claims to shut NFT to focus on “oth­er ways to sup­port cre­ators, peo­ple, and businesses”. 

The focus now falls on the fate of the com­pa­nies that had pro­vid­ed NFTs for organ­i­sa­tions that aggres­sive­ly invest­ed in Web3 plat­forms when the now-sub­sided NFT wave peaked. One such com­pa­ny is Poly­gon

Poly­gon is one of the most wide­ly recog­nised plat­forms for Ethereum Lev­el 2 scal­ing and infra­struc­ture devel­op­ment. Face­book and Insta­gram had inte­grat­ed with Poly­gon to help cre­ators mint NFTs. With Meta’s announce­ment on shut­ting NFTs, Polygon’s future with the big tech is now uncertain. 

When AIM reached out to Poly­gon, the com­pa­ny refused to com­ment, on record, about Meta’s deci­sion. How­ev­er, they insist­ed, as con­firmed on tweet, that the com­pa­ny will con­tin­ue to sup­port and empow­er the cre­ator com­mu­ni­ty to “lever­age the vast options with­in the Poly­gon Ecosystem”. 

Has Polygon’s Growth Become Stagnant? 

In Sep­tem­ber 2022, Dalip Tya­gi, the then SVP and Head of Devel­op­er Rela­tions, Poly­gon, spoke to AIM about how Poly­gon invests in tech­nolo­gies that are “future lean­ing” and that they invest “ahead of the curve”. Poly­gon also believed that they would become the “AWS of Web3”  and would get there “soon­er than most of their com­peti­tors”. How­ev­er, the for­ward vision seems to be fac­ing tur­bu­lence in the light of one of the biggest social media plat­forms hav­ing retract­ed their NFTs. 


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When plans of launch­ing NFT on Face­book were abuzz last year in July, Poly­gon and Ethereum saw their token prices rise over 17%. The for­mer has so far raised a total fund­ing of $451.5M over eight rounds. In Feb­ru­ary 2022, Poly­gon raised $450M from three play­ers—Sequoia Cap­i­tal India, Soft­Bank and Tiger Glob­al

Source: Blockchain Coun­cil (Jan­u­ary 2023)

How­ev­er, after the burst of NFT hype, the com­pa­ny did not receive any major fund­ings. The last fund­ing they received was from a non-equi­ty assis­tance round in July 2022. The impact of this down­turn was fur­ther high­light­ed last month when Poly­gon laid off 20% of its work­force. The lay­offs were across teams, affect­ing about 100 employ­ees and were said to have been a part of their efforts to con­sol­i­date mul­ti­ple busi­ness units. 

Future of Polygon and NFTs

The announce­ment of NFT clo­sure by Meta comes at a time when NFT mar­kets are fac­ing a volatile decline. It was report­ed that vol­ume of NFT sales have dropped 83% year-on-year. From $2.8 bil­lion in Jan­u­ary 2022, the month­ly sales dropped to $492 mil­lion in Jan­u­ary 2023. How­ev­er, NFT is not on its way out and nei­ther is Poly­gon.

Poly­gon and Sales­force recent­ly announced their part­ner­ship to cre­ate NFT-based loy­al­ty pro­grammes. Clients of Sales­force, a CRM soft­ware com­pa­ny, will be able to cre­ate token-based loy­al­ty pro­grammes using Polygon’s plat­form. They would be able to mint, man­age, and sell NFTs. 

Col­lab­o­rat­ing with Poly­gon, Red­dit intro­duced NFT avatars in July last year and is still going strong. Accord­ing to a report pub­lished last month, the mar­ket cap­i­tal­i­sa­tion of Col­lectible Avatars has crossed $36 mil­lion with over 10.6 mil­lion items mint­ed since its launch. 

Poly­gon has also announced part­ner­ship with video game mak­er ‘Square Enix’ to bring NFT games into its ecosys­tem. Addi­tion­al­ly, Poly­gon has been part­ner­ing with sev­er­al web3 gam­ing projects, includ­ing Plan­etIX, Zed Run, Crazy Defense Heroes and Kar­ma­verse

Poly­gon has been play­ing safe bets by diver­si­fy­ing its port­fo­lio to cater to com­pa­nies from dif­fer­ent indus­tries. The company’s part­ners belong to sec­tors rang­ing from con­sumer prod­ucts and sports to social media, gam­ing, and more. This approach helps reduce Polygon’s risks and safe­guards the com­pa­ny against any form of down­fall faced by a par­tic­u­lar indus­try

Other Players

New entrant Ama­zon is work­ing on its NFT mar­ket­place and is expect­ed to release it next month. Although a late entrant, Ama­zon will pur­sue its NFT ambi­tions with­out con­cern­ing itself too much with the estab­lished play­ers it will be going against in this space. Twit­ter also entered the NFT mar­ket in Jan­u­ary this year with ‘NFT pro­file pic­tures’ that are avail­able for Twit­ter blue sub­scribers only. 

The Poke­mon Com­pa­ny, mak­er of Nin­ten­do video games, sim­i­lar­ly hint­ed at its pos­si­ble entry into the Web3 space. The com­pa­ny recent­ly post­ed an open­ing for an expert in NFT, blockchain and meta­verse imply­ing its pos­si­ble for­ay into NFT plat­form. How­ev­er, the com­pa­ny is yet to make an offi­cial announcement. 

While the ini­tial NFT wave might have sub­sided, com­pa­nies’ increased part­ner­ships with Web3 plat­forms might be direct­ing atten­tion towards a pos­si­ble NFT renaissance. 



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