Dialogue Polygon Ventures Sachi: The crypto market is currently too focused on infrastructure rather than consumer applications

Author: Marco Manoppo

Compiled by: Deep Tide TechFlow

Sachi has an extremely diverse background.

She graduated from Caltech with a degree in Electrical Engineering and began her career at Mitsubishi in Japan, later transitioning to more finance-centered roles. Shortly after, Sachi worked as an economic analyst at the International Monetary Fund and as an assistant at Bank of America.

Cryptocurrency is a global asset, and Sachi is a true global citizen. She has lived in four different countries across four different regions. Currently, Sachi is a member of the Polygon Ventures team, leading a $100 million ecosystem fund focused on advancing the Polygon blockchain.

Key Points:

• U.S. entrepreneurs need to be flexible about relocation, considering the evolving regulatory environment. Dubai is a good option.

• Teams and investors in Asia are seeing more active deal flow.

• Real World Assets (RWA) is an exciting area, but a "crypto-native" way to address KYC issues needs to be found.

• Currently, cryptocurrency is too focused on infrastructure and neglecting consumer adoption.

• The market dominance of Tether and Binance in the cryptocurrency space is the biggest risk.

What was the decisive moment that made you decide to enter the crypto industry?

Sachi met Sandeep through a mutual friend who was already working in the cryptocurrency field. At that time, Polygon was still known as Matic and had not yet been listed on Coinbase.

Early conversations with Sandeep made her decide to join the field. Sandeep used an analogy to explain the potential of crypto technology. For example, Ethereum is akin to replacing centralized institutions like central banks, while Bitcoin will become a value layer similar to digital gold.

Seeing the growth of the industry, Sachi realized the opportunities in cryptocurrency, both from a technological potential and career development perspective. In traditional banking, age often becomes a limitation, no matter how hard one works.

Ultimately, Sachi decided to join Polygon. Initially, her role was not clearly defined, but Polygon was improving its investment approach to drive the development of its ecosystem. Sachi subsequently joined to help build a due diligence framework to assess potential investment projects, including creating an IC (Investment Committee) for the ecosystem fund.

How has your international background helped you in cryptocurrency?

Having a diverse background is indeed helpful.

As a truly global asset class, you will work with people from all over the world. Naturally, you need to understand how different cultures operate. In terms of closing deals, this also means having a good understanding of the etiquette and styles of various cultures. For example, Sachi's background helped her close deals in Japanese cryptocurrency projects.

How has your experience as a credit trader influenced your prospects in cryptocurrency?

In simple terms, Sachi used to study large bank bonds and determine the appropriate yields for those bonds. This experience gave her a good understanding of how traditional finance operates, which is very helpful for understanding DeFi mechanisms in cryptocurrency.

Many things done in DeFi are just borrowed concepts from traditional finance (TradFi). However, many DeFi players are often not very familiar with the system, especially in terms of risk management. Pricing options, creating appropriate swap markets, and other financial technicalities are sometimes still not done well enough.

What is your view on the role of emerging markets (EMs) in cryptocurrency?

Cryptocurrency is particularly important for emerging markets facing inflation issues, such as Venezuela or Argentina. These countries truly understand the value of cryptocurrency, and compared to developed markets, emerging markets have more potential to drive large-scale adoption of cryptocurrency.

Which regions do you think have the most active trading activity?

Currently, there is still some trading in the U.S., but Sachi sees much more trading in Asia. Recently, the activity of Asian projects and funds has become more common. Part of the reason is that U.S. funds over-invested during the bull market, so there is currently no capital available for allocation. Asian investors tend to be more opportunistic and usually do not like to invest when valuations are high. Now that valuations are lower, they are more willing to allocate funds.

There are also many more projects from Asia due to lower political risks.

What strategies can founders adopt to navigate the current regulatory landscape?

Founders should remain flexible and open-minded. Given the current regulatory developments in the U.S., founders may have to consider the possibility of relocating (at least in the short term).

Many countries are becoming more open to cryptocurrency. Dubai is a highly promising option. In an interview with CZ, he mentioned that the region genuinely wants to welcome cryptocurrency businesses and entrepreneurs with appropriate regulations. Founders can consider relocating their businesses to such regions.

How was Polygon's experience in raising $450 million in funding?

An investor (Redacted) suggested/pitched to Sandeep that he should raise funds for Polygon. One of the main reasons was that other L1 competitors had just completed massive fundraising.

Initially, Sandeep was not very enthusiastic about raising funds because Polygon still had a lot of capital, but he later began to realize the value of having well-known institutional investors for the company under strategic purposes.

An important lesson is: once you have a commitment from investors, close the deal as soon as possible. Especially in a highly volatile field like cryptocurrency, where the technology development cycle is tied to actual dollar value. When the market starts to decline, investor sentiment can change significantly, and there is no guarantee that commitments will always be honored. Additionally, timing is crucial. Polygon raised funds at the right time (late 2021 to early 2022).

What are Polygon Venture's current investment themes?

Polygon Venture's current investment themes are infrastructure projects, such as staking, zero-knowledge technology (ZK-tech), and real-world assets (RWAs). Currently, assessing the next emerging cryptocurrency trends is somewhat challenging; however, with changing macro conditions, the likelihood of a resurgence in consumer-facing applications (like gaming) will significantly increase.

How to address RWA compliance?

While RWAs are exciting, it remains to be seen how much compromise the decentralized space needs to make in supporting institutional adoption.

In traditional finance (TradFi), Know Your Customer (KYC) is very important. In the cryptocurrency space, there is currently no good way to conduct KYC locally. Perhaps Coinbase's Base could become an attempt to perform KYC on individual users at the chain level.

Polygon is also developing Polygon ID, which uses zero-knowledge technology to verify identities without fully disclosing your real identity.

What are your thoughts on the crackdown on Binance?

The crackdown on Binance is beneficial for the cryptocurrency industry in the long run. Over the past few years, Binance's power has been too strong. Every project wanting to succeed had to be listed on Binance. Other exchanges need to catch up in market share to prevent excessive monopoly and liquidity concentration.

Quick Q&A:

1.

### What Web3 game are you currently most interested in?

My Pet Hooligan.

2.

### What is your contrarian view on the current cryptocurrency landscape?

We are too focused on infrastructure and neglecting consumer adoption.

3.

### What is the biggest risk facing the cryptocurrency space?

USDT decoupling or regulatory actions related to Binance.

4.

### What is the most underrated application area in cryptocurrency?

NFT tickets, using NFTs to enter clubs.