Polygon Lays Off 20% of Staff Amid Restructuring
Layer 2's MATIC Token has Soared 38% in Last 30 Days
By: Tarang Khaitan •Byte
A year after Polygon Labs raised $450M to expand its web3 strategy, the Layer 2 provider is reducing its headcount by a fifth and will lay off 100 employees, the company said Wednesday.
“This was a painfully hard decision, but a necessary step in our journey,” Polygon said in a post on its website.
The news is surprising given how well Polygon has been performing. Polygon’s governance token, MATIC, has recorded a 4% jump in the last seven days compared to a -0.4% decrease in the price of Ether. MATIC is up 38% in the last 30 days. Polygon said it has $250M and 1.9B MATIC in its treasury.
Yet the move comes after Polygon consolidated “multiple business units” in January as part of a restructuring process. With $1.1B in TVL, Polygon is the No. 5 DeFi protocol, according to DeFi Llama.
Responding to a user on Twitter, Polygon Labs’ president Ryan Watt confirmed that $100M went to Polygon’s ecosystem fund, and in total $200M was spent by the team in the past year.
Last February, Polygon raised $450M by selling MATIC in a private sale in a round led by Sequoia Capital India; SoftBank, Galaxy Digital, Tiger Global, aware among the other investors in the deal.
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According to data from CoinGecko, 6,800 crypto workers were laid off in 2022, and only 2.3% of those were in DeFi.
More layoffs may be in the works. Huobi, a centralized exchange, is reportedly in the process of laying off 20% of its staff. Earlier this month, Jack Lu, CEO and Co-Founder of NFT marketplace Magic Eden, took to Twitter to share the news that his company is reducing its headcount by 22 people.
The news from Polygon is surprising because the venture has been one of the standouts in a challenging period for DeFi. Layer 2s are picking up momentum as the race to scale Ethereum moves into high gear.
Last week, German conglomerate Siemens issued a 60M euro digital bond on the Polygon blockchain, without any involvement from the Polygon team, which demonstrated the utility of the network. Polygon is set to debut its EVM compatible zero-knowledge proofs dubbed zkEVM on March 27. With zkEVM, the team aims to increase user privacy, and increase transaction throughput.