Blockchain venture-capital firm AU21 Capital started a $21 million fund to invest in projects built on Polygon, a layer 2 Ethereum scaling solution that has become more popular as a result of rising gas fees on Ethereum.
In addition to financial backing, AU21 will provide support for business development and marketing. The fund’s manager, AU21 partner Alexi Nedeltchev, said he expects at least a 10-fold return on the fund.
“The low gas fees help anyone using Uniswap or any other major [decentralized finance] project,” Nedeltchev said. “It’s also very easy to transfer to Polygon because it uses the Ethereum Virtual Machine.”
While it has been a long-time buyer of Polygon’s native token MATIC in secondary markets, AU21’s interest increased when Mark Cuban invested in the firm last week. Polygon has given small grants to some projects in the past but this is the first fund dedicated to such projects, Polygon co-founder Sandeep Nailwal told CoinDesk via Telegram.
Previously, AU21 only had an ecosystem fund for Polkadot.
“We saw the Polkadot system rising first and then quickly [Binance Smart Chain] got really popular and lately we’re seeing a lot of Polygon, after the rebrand from Matic to Polygon,” Nedeltchev said. “They’ve also got a lot of mainstream attention. Their market cap has increased so much along with more developers going into it, so this is the perfect time to attract more developers to come in and build apps within the Polygon ecosystem.”