Once hailed as India’s only crypto decacorn, Polygon Labs reached a staggering $20 billion valuation during the 2021 digital asset boom. Its native token, MATIC, soared to an all-time high of $2.92 in May 2021.
Founded in 2017 by Sandeep Nailwal, Jaynti Kanani, and Anurag Arjun, the blockchain startup attracted top investors like Mark Cuban, SoftBank, Tiger Global, and Sequoia Capital. However, the euphoria has since waned.
As of May 26, 2025, MATIC is trading at just $0.24, with the company’s market capitalization plunging to $2.53 billion—marking a nearly 75% drop, according to CoinMarketCap data.
The downturn has sparked concerns about Polygon’s fundamentals, but broader market conditions also play a crucial role. The crypto industry has faced significant volatility, regulatory uncertainties, and funding slowdowns since 2021. During the last market crash, several tokens, including Terra (LUNA), collapsed entirely, while others such as Cardano (ADA), Chainlink (LINK), and Avalanche (AVAX) saw substantial declines, struggling to regain their previous highs. Meanwhile, Bitcoin has emerged as the dominant player, increasing its share of the total crypto market capitalization from 40-45% to over 60%, pushing the overall market cap to $3 trillion. Many altcoins, including MATIC, have failed to rebound as strongly.
In an interview with Outlook Business, Polygon’s Global Head of Payments and Liquidity, Aishwary Gupta, attributed the decline to overall market trends rather than company-specific issues.
“The token price decline is more about the overall crypto market globally and has nothing to do with Polygon. If we look at all Layer 2s, they are in an even worse stage from a price point. It’s not specific to Polygon,” Gupta stated.
Gupta further pointed to liquidity fragmentation as a key challenge. In 2021, the crypto token supply was more concentrated, but the proliferation of new tokens, particularly meme coins, has significantly diluted liquidity. He cited the example of the Trump Coin ($TRUMP), which launched on the Solana network at $0.18 and rapidly reached a $14.5 billion market cap, siphoning off 25% of total market liquidity in a single day.
Polygon is not alone in its struggles. Other blockchain projects have experienced similar valuation declines. StarkWare’s valuation has dropped from $8 billion to $750 million, Arbitrum’s market cap has fallen from $7 billion to $1.4 billion, and Optimism is down from $9 billion to $1 billion.
Competition is another factor affecting Polygon’s standing. Siddharth Ugrankar, CEO and co-founder of Qila.io, noted that rival blockchain projects such as Avalanche and Aptos are innovating rapidly to attract developers and users. He also highlighted a growing investor sentiment that prioritizes Bitcoin over other crypto assets, with some questioning the relevance of Web3 in an era dominated by artificial intelligence.
Despite the setbacks, Polygon remains a major player in blockchain scaling solutions. The company claims to lead in USDC user count globally and ranks third for USDT transactions, behind only Tron and Ethereum. Institutional adoption remains a bright spot, with major firms such as BlackRock, Hamilton Lane, and Franklin Templeton building on Polygon’s network.
Alankar Saxena, co-founder and chief product officer of Mudrex, believes Polygon still has strong fundamentals.
“Polygon continues to rank as Ethereum’s largest Layer-2 token by market cap, growing with a 40% surge in new addresses,” he said.
The company also asserts that its Polygon PoS chain dominates stablecoin activity, holding over 40% market share among key industry players.
Looking ahead, Polygon is banking on its developer ecosystem to fuel its resurgence. With over 1,240 developers currently building on its platform, the company is focusing on real-world blockchain applications. Partnerships with major firms like Reliance Industries’ Jio Platforms and upcoming collaborations with Flipkart signal its commitment to mainstream adoption. Gupta also revealed that Polygon is in discussions with Indian government initiatives like IRCTC and MNREGA to explore further blockchain use cases.
After relocating its headquarters to Dubai due to taxation issues, Polygon has continued investing in India, pouring over $20 million into grants, developer programs, and direct investments over the past three years.
While the road ahead remains uncertain, Polygon’s trajectory reflects the volatility of the crypto sector. The company’s ability to adapt to shifting market dynamics and foster institutional partnerships will determine whether it can reclaim its former status or serve as a cautionary tale in the ever-evolving blockchain landscape.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.
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