Sandeep Nailwal, CEO, Polygon Foundation
Polygon, the blockchain infrastructure firm, has announced an overhaul and senior leadership changes, amid shifting dynamics in the global crypto and Web3 landscape. Co-founder Sandeep Nailwal has resumed a leadership role, returning as CEO of Polygon Foundation after nearly two years.
In an exclusive interview with Moneycontrol, Nailwal shared his business roadmap, restructuring of entities under Polygon Foundation, crypto regulations, evolving Web3 ecosystem in India, Sentient AI and more.
Edited excerpts:
Tell us more about the structural changes happening at Polygon Foundation and its entities. What’s driving this restructuring?
These are not companies in the traditional sense, but crypto protocols that operate under a foundation. A foundation typically creates multiple entities to run these protocols. Some of these entities may be for-profit companies, while others work closely with the foundation to build the protocol.
Polygon Labs, where Marc Boiron is the CEO, is one such entity funded by the Polygon Foundation. The other co-founders at the Polygon Foundation joined through acquisitions. I then created a board to enable decentralised decision-making.
That model worked well when the company was in its “10 to 100” growth phase, when Polygon was valued at around $20–30 billion. But over the past year, things have changed. We are a Layer 2 blockchain company building on top of Ethereum. Earlier, Ethereum was the Layer 1 base protocol, with Layer 2s like us building on top of it.
However, over the last year, Ethereum’s position as the Layer 1 has been somewhat shaken. This disruption has affected everyone building on top of Ethereum, including Polygon.
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(In blockchain terms, Layer 1 refers to a base protocol like Bitcoin or Ethereum, while Layer 2 is a third-party protocol that adds integrated functionality and scalability on top of that base layer.)
Over the last 8–12 months, I’ve realised that while we had set up the foundation for a “10 to 100” growth trajectory, we are now back in a “0 to 1” phase.
If Ethereum doesn’t find its footing, then we need to find our own standing. And over the past 6–12 months, although the board was functioning in a cordial manner, progress wasn’t happening at the pace we needed.
We should be experimenting more, taking big and aggressive bets. When something works, we should double down on it. But that wasn’t happening.
That’s why I made the decision to dismantle the board and take over as CEO. From now on, all the labs and entities, and their respective CEOs, will report directly to me instead of to a board.
There’s no board anymore. I am the CEO. I will make the decisions and be accountable for them. I want to get into the startup mode.
What happens to the board of the Foundation, which is consensus team of 10 co-founders?
One of the co-founders, Mihailo Bjelic, recently left. Prior to him, Jaynti (JD) Kanani and Anurag Arjun left. The company started with JD, Arjun and me as the co-founders, then we acquired other companies, and gave them titles of co-founders for running their respective divisions.
Now, I’m spinning off some of these acquired firms, especially those working on specialised projects like the ZK Research Protocol. I’m also spinning out ZisK, so it can raise external funding while continuing to receive support from Polygon.
(ZK protocol, or zero-knowledge proof, is used in cryptography as a verification method between a prover and a verifier during transactions.)
So far, three or four spin-offs have already happened. These entities no longer operate under the Polygon Foundation. They now have their own foundations and protocols, but have contributed significantly to the Polygon ecosystem and POL holders through large airdrops.
I am trying to merge everybody’s contribution to one single place. Now Polygon will focus only on its core products, which is Polygon PoS and Agglayer. Everything else is spun out.
What’s the strategy going forward? Why is the Agglayer Breakout Programme replacing the Polygon zkEVM?
Polygon had three live products: the Polygon PoS (Proof of Stake) chain, AggLayer, and the zkEVM chain. The zkEVM chain and the PoS chain were competing with each other and cannibalising usage, so I decided to shut down one of them.
Now, we operate only the Polygon PoS and AggLayer.
AggLayer or Aggregation Layer is an internet of blockchains where people can come and build multiple chains. So, you can have hundreds of thousands of chains built by third parties.
You had last raised $450 million in funding in 2022. With the new projects and offerings on the horizon, are you in talks for raising new funding?
We still have several hundred million dollars in our treasury. I don’t think we need to raise right now or probably in the next one and a half years or two years.
In India, Web3 is going mainstream – Polygon has already partnered with Reliance Jio for payments. Are you in talks with other conglomerates and businesses?
I can’t name them yet, but there are multiple projects in the works. In fact, two of them are major household names and are entering into strong partnerships with us in India.
India is our home ground. Obviously, there is a soft corner for us even though Polygon has now become a global protocol. India is always a high priority for me. You are going to see some very interesting things coming out shortly.
How do you see Trump’s policies and the changing sentiments around the sector impact India’s crypto discussion paper and the policies here?
I don’t see a lot of optimism yet. I think the optimism will come when India actually does something big bang. Over the past ten years, the relationship has been a mix of love and hate.
By big bang news, where it tells everyone, okay, this is legal. Now, let’s do something about it.
How do you see the sentiments of the Web3 developers evolving in India? A lot of the global blockchain firms like Aptos are quickly moving in India to capture the Web3 developer demand here? How is Polygon assessing it?
What Aptos and others are doing now, we have been doing that since 2017. We were the first to start hackathons in India. Everything you can imagine, we did it first.
We gave out a massive amount in grants and investments. I personally must have invested around $15 million, probably close to Rs 100 crore, into various projects. I had an open-door policy for anyone doing anything in crypto in India. If a founder reached out and didn’t seem like a shaky character, I would do an angel investment of Rs 10-20 lakh.
Do something, use my name, go out, raise more money and all that. A lot of Indian founders could not go global and do that global storytelling. You need to go global because the local market is off limits for you because of the regulations.
Quite frankly, a lot of projects that come to India stay for a year or two. What they do is very similar to what we call “DAU farming” in the Web2 world–daily active user farming.
Many companies come to India, get 10–20 million users, and then claim they have 50 million users globally. But out of that, 30–40 million are low-paying or even free Indian users, and only 10 million are actual paying users elsewhere.
Similarly, in crypto, a lot of companies do this. They do daily active developer farming. They would give small grants and ask you to build something on their node and all that.
Is Polygon investing on Indian developers?
We have graduated from that and now we are very focused on founders. We are not looking for having a huge number of hackathons, college kids trying their hands on.
This was needed when EVM (Ethereum Virtual Machine) was new. Our technology is essentially EVM. At that time, we needed grassroot level things. But now, there are enough developers in the EVM ecosystem.
Our focus today is on founders. We have a Headroom facility in Dubai, and we also have a node in Bengaluru.
We now look for the founders, we think can do really, really good. Then we do bigger investments in them. Instead of spraying and paying like $100,000 or Rs 1-2 crore, and spending it on hackathons, we would actually take Rs 50 lakh or Rs 1 crore and give it to two or three founders, which we has the mettle in them.
That’s where the real innovation is happening. We continue to invest in India. We invest more than before, but we now do it in a selective, focused, and thesis-driven manner.
You also have your Web3 venture capital firm Symbolic Capital. What’s the update there? Your last fund size was $50 million. Are you looking at a new round?
I also have my Nailwal Fellowship Program, where I give around $25,000 to $50,000 funds to a lot of the founders. And across the board globally also. Even in this one, we have three founders who we might give $50,000, maybe Rs 40 lakh rupees, and they can spend six months to build their product and see what they can do about it.
Symbolic Capital also invests a lot whenever they see any interesting project. But it’s very VC-focused and kind of like more capitalist in nature, rather than socialist in nature.
I am not looking to raise a new fund. I would probably put my own capital instead of raising LP (limited partner) capital. I am not interested in that right now, it can change in the next 1-2 years.
What’s the update on you AI startup Sentient which had raised $85 million in seed from Peter Thiel’s fund last year? Will you continue to be active there?
I spend 90-95 percent of my time on Polygon. And, Sentient has full-time co-founders, two of them.
I perhaps give 10 percent of my time to Sentient. Sentient is still in the product-building phase, trying to find the right product market fit. Now that it’s a long process, you have to do multiple trials and see what might work in the industry.
Sentient is trying to create a competitor to OpenAI or Perplexity, but doing it in an open-source way.
In OpenAI, you have a front-end and they are also building the models. Whereas what Sentient is doing is, you have a front-end, and then you get all the open-source developers together and integrate their product into one single interface. There is a planner and coordinator model, which actually sees the query, and then suggests which is the right model to answer that query. Somebody could have a finance expert AI model, or a health expert AI, or a writing expert and all that.
Sentient’s planner and coordinator model will break that query into different chunks and then give you one combined answer after getting responses from various models.
Existing AI models like DeepSeek has already started plateauing and they are open source, so no point in building one more from the scratch.
What’s Polygon’s team size at the moment in India and globally? Are you planning to hire more?
We are still around 200 people, and I think India has around 70-80 people, and 120 or 130 are in the US. Right now, we have around 20 positions open and we are constantly looking. At any point, 20-40 openings are there.
Also read: Polygon Foundation names co-founder Sandeep Nailwal as CEO in a strategic shift