- Ryan Wyatt is the CEO of Polygon Studios and a former gaming chief at YouTube.
- Polygon is a layer-2 on Ethereum, which allows developers to build decentralized apps on its chain.
- Other layer-2 scaling solutions include Arbitrum, LoopRing, xDai Chain, Optimism, and Immutable X.
At YouTube, Ryan Wyatt was well acquainted with the ways users wanted to monetize their content – their participation in the creator economy. He says the jump to chief executive of the Ethereum scaling-solution developer Polygon has been “eerily similar.”
“If you think about it, there’s so many parallels in Web3 of the developer ecosystem to the creator economy, right?” Wyatt told Insider, citing users’ desire to generate income from their work and build on innovative platforms.
Wyatt started YouTube’s gaming vertical and was previously the vice president of programming at Major League Gaming.
Last year, the 35 year old noticed an influx of venture capital flooding into the gaming industry. In the past, Wyatt said, funding often came from gaming publishers instead of major investment firms.
“I started to notice that people who I really believed in and who I thought were really smart were raising capital to start their own game studios. And what they were doing with that capital was blockchain-based games,” he added. “That’s where it started to get me excited.”
Large institutional players like Andreessen Horowitz, Tiger Global, and Sequoia have all invested in the nascent space. Blockchain-based gaming funding reached $4 billion in 2022, according to blockchain research firm DappRadar.
“It was a new way to monetize,” Wyatt said of NFTs, or nonfungible tokens, integrated into gaming. “The arrangements that users have with game developers is a licensing, and in most cases, that item is illiquid.”
Ownership of a tokenized asset on-chain, Wyatt said, unlocks a new monetization strategy for both traditional gaming studios and the players participating in that ecosystem. Most commonly, players purchase skins for their characters — a market that generates roughly $40 billion per year in revenue, according to trading platform DMarket.
The advent of blockchain games has led to players having true ownership of their virtual goods,
Twitch
cofounder Justin Kan previously told Insider.
“The only difference is that these companies themselves are giving up control and what they get in exchange is a more robust economy,” Kan, who started gaming-focused NFT marketplace Fractal, said.
For the uninitiated, a layer-2 is a separate blockchain that extends Ethereum. Polygon, in particular, allows developers to build decentralized apps, or DApps, on its chain. Its protocol, however, can be used to build on games, mint non-fungible tokens and is continuing to expand its use cases.
In February, Polygon announced a $450 million funding round, led by Sequoia Capital India. Other investors included SoftBank, Tiger Global, and Galaxy Interactive. The startup has previously partnered with NFT artist Beeple, OpenSea, Dolce & Gabbana, and DraftKings.
“The most reputable companies in the world are choosing Polygon after doing due diligence,” Wyatt said, citing their partnership with payment processor Stripe.
The layer-2 wars
Polygon, Wyatt argues, is the single layer-2 to build on Ethereum.
“Ethereum is here to stay. It’s going to be a critical layer-1 for the world,” he said. “Polygon is the best way to build on its network because we have a variety of tech solutions that allow you to build the experience that you’re looking for.”
Polygon’s technical solutions include its
proof-of-stake
chain and Supernet chain, which allows developers greater optionality on what type of apps they want to build. Proof-of-stake improves energy efficiency and leads to lower transaction speeds. In March, Polygon said that it would invest $100 million into more customizable networks.
Ethereum, compared to Polygon, has lower transactions costs, also known gas fees. The layer-1, for example, is limited to roughly 13 – 17 transactions per second, whereas Polygon can execute 7,000 in the same time frame.
Other layer-2 scaling solutions include Arbitrum, LoopRing, xDai Chain, Optimism, and Immutable X.
In the coming months, Ethereum is set to undergo a series of upgrades on its network called Eth2 or “The Merge.” This includes improving Ethereum’s energy efficiency, which has been a common compliment of building on a layer-2 like Polygon.
Polygon’s native token, known as MATIC, has been carried with the broader crypto market downturn. MATIC declined 30.34% in the past month, trading at $1.04 on Friday. The altcoin, which has a
market cap
of $8.2 billion, is 64.15% down from its all-time high of $2.90.