Why This Billionaire Invested in Polygon, and You Should Too

Mark Cuban built a reputation over nearly the last four decades as one of the most prolific tech investors of our time. Since his first investments in the industry during the internet boom of the 1990s, he has amassed a fortune of more than $4.5 billion. Being no stranger to up-and-coming technologies, it makes sense that Cuban is a fan of blockchains and cryptocurrencies.

Over the last few years, Cuban has built positions in cryptocurrencies such as Bitcoin, Ethereum, and even the memecoin Dogecoin. He’s got a diverse portfolio of companies too, which range from household names like OpenSea, the biggest market for non-fungible tokens (NFTS) and rival SuperRare to new start-ups such as Fabrica, which turns real estate into NFTs. He even made an investment in the Layer 2 Ethereum sidechain, Polygon (MATIC -1.35%), back in May 2021.

Polygon is unique because instead of trying to create an alternative to Ethereum, it offers a scaling solution to help the blockchain work more efficiently. Polygon processes Ethereum transactions off the main blockchain and then adds them at a later date. This lowers fees and increases speeds, but most importantly maintains compatibility with Ethereum.

While the size of his stake in Polygon is unknown, we do know that the tech guru loves what Polygon has to offer. Cuban’s website describes Polygon as the “first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development.” And Cuban himself said, “I was a Polygon user and find myself using it more and more.”

Cuban is part of a growing user base that has flocked to Polygon for a number of reasons. Ethereum’s smart contracts (which are the building blocks for things like NFTs and DeFi apps) have made it the most popular blockchain network, but that has led to congestion, often resulting in slow, expensive transactions.

With Polygon, slow speeds and high fees are a thing of the past — and it seems people and companies alike are realizing this. Since Cuban’s investment last year, Polygon has made leaps and bounds in pursuit of its long-term development. 

Polygon still achieves despite crypto winter

It’s been a busy year for Polygon, even in the midst of a bear market. One of its most important accomplishments comes in the world of NFTs. In July, Meta Platforms’ Chief Executive Officer Mark Zuckerberg announced that Instagram and Facebook will be adding NFT functionality to their platforms so users can connect crypto wallets to then show off their digital collectibles.

Of the four blockchains that will be supported, Polygon was one of them. Now Polygon will be able to gain more exposure in front of Instagram’s 1.4 billion users and Facebook’s 2.9 billion users. 

In addition to the Meta news, Polygon is now officially backed by one of the world’s most popular companies, Disney. Polygon was inducted as a member of this year’s Accelerator Program and will receive time, funding, and resources from Disney to further develop its long-term objectives. The ultimate goal is that a partnership develops out of the program, and with Disney’s sights set on all things Web3, (virtual and augmented reality, NFTs, blockchain-based applications, etc.), Polygon could become the blockchain of choice to help Disney fulfill its future vision.

As more sectors of the internet migrate to decentralized, so-called permissionless technologies, Polygon hopes to become the blockchain of choice to support those types of applications. Polygon co-founder Mihailo Bjelic wants Polygon to become “the holy grail of Web3 infrastructure.” In his eyes, the perfect Web3 blockchain must have three major properties: “scalability, security, and Ethereum compatibility.” Polygon checks all of those boxes and is setting itself up to be the home of all things Web3.

So is Polygon a buy?

The future is more than bright for Polygon. Innovations and collaborations with Meta and Disney show that Polygon’s versatility is being noticed by corporate elites. When considering all the developments around Polygon’s blockchain, it’s surprising that Polygon’s native currency MATIC is down more than 60% from its all-time high. Investors should use this time to gain exposure to a blockchain that might boom as Web3 continues to grow. 

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. RJ Fulton has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum, Meta Platforms, Inc., and Polygon. The Motley Fool recommends Dominion Energy, Inc. The Motley Fool has a disclosure policy.

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