Last Updated on June 14, 2022 by Bitfinsider

Sandeep Nailwal, co-founder of Layer 2 scaling solution Polygon, said on Tuesday that the current market difficulties will have no impact on long-term Web3 initiatives. He believes the drop is attributable to macro issues rather than any inherent Web3 flaws.

He also seeks to rekindle investor trust by stating that he believes Polygon will weather the storm. Despite a rise of Web3 ambition partnerships, Polygon still has a long way to go.

In fact, since the beginning of the year, the Polygon has lost 66 percent of its Total Value Locked (TVL). Polygon’s TVL was over $5.44 billion at the start of the year, and dropped to approximately $1.82 billion on June 14.

Sandeep Nailwal also expressed his thoughts on the crypto market meltdown and its influence on the Web3 in a tweet on June 14. He believes the bear market will last a long time, but that once the Federal Reserve removes the uncertainty, a tremendous bullish resurgence would occur. However, given sticky inflation and fears of stagflation, Nailwal believes the chances of it happening are slim at the moment.

Sandeep Nailwal, with reference to the private market, said: “A lot of VC funds have raised a LOT of capital, even though they will be careful in selecting their bets, and acceptable valuations would be much lower but I expect the thesis based VCs to keep deploying. Most of them will also play in liquid markets.”

He believes that projects that have reached product-market fit (PMF) will be able to obtain funding, but that those that haven’t should focus on surviving, taking consultancy work, and decreasing expenses.

According to Sandeep Nailwal, enterprises similar to Polygon have the ability to create generational value because they have a robust treasury and enough finances to sustain a project for 2-3 years. Large investors will return to crypto in 3-6 months, after the Fed has hiked rates by 50-75 basis points 2-3 times, and markets will be able to return to normal.

Market Pressure Causes Polygon’s MATIC to Fall

Since the beginning of the year, the MATIC token has lost roughly 85% of its value. MATIC began the year with a trading price of $2.53 and has recently dropped to a 52-week low of $0.3985. The price of MATIC is now $0.42 at the time of writing.

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