Polygon
Labs
gave
DraftKings
millions
worth
of
MATIC
tokens
to
become
one
of
the
Ethereum-scalable
protocol’s
100
validators.
The
payments
were
never
disclosed,
but
evidence
is
visible
on-chain,
CoinDesk’s
Danny
Nelson
found.
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Worse,
DraftKings
failed
to
maintain
its
validator’s
performance
and
was
kicked
off
the
network
last
month
—
despite
receiving
financial
and
technical
support
from
Polygon
as
well
as
special
privileges
(like
the
ability
to
take
100%
commission
from
delegators,
well
above
the
norm
of
5%-10%).
When
the
tie-up
was
announced
in
early
2022,
Polygon
called
it
an
“important
adoption
milestone”
and
“the
first
time
a
major
publicly-traded
firm
has
taken
an
active
role
in
blockchain
governance.”
While
it’s
fairly
common
for
Web3
companies
to
pay
mainstream
brands,
celebrities
and
influencers
to
promote
or
use
their
crypto
protocols,
discussing
such
deals
as
a
signal
of
“mainstream
adoption”
is
both
an
overstatement
and
undermining
of
crypto’s
supposed
values.
And,
at
least
in
Polygon’s
case,
there
are
often
other
costs
associated
with
these
type
of
special
arrangements.
As
Nelson
writes:
“DraftKings’
earnings
came
at
the
expense
of
every
other
staker
in
Polygon’s
ecosystem.
The
network
only
issues
a
finite
number
of
MATIC
rewards
to
stakers
annually.
At
least
80%
of
DraftKings’
Polygon-delegated
tokens
came
directly
from
the
Foundation,
meaning
they
were
not
previously
being
staked.
These
newly
delegated
tokens
diluted
how
much
rewards
everyone
else
could
get.”
“Polygon’s
undisclosed
allocation
to
DraftKings
–
and
its
validator’s
near-complete
reliance
on
Polygon
–
undercut
the
blockchain
company’s
own
characterizations
about
the
validator
being
like
all
the
others.”
It’d
be
hard
to
say
exactly
that
Polygon
did
wrong
by
subsidizing
DraftKings’
use
of
the
network.
DraftKings
did
participate
in
other
Polygon-related
efforts,
and
made
good
use
of
a
Polygon-based
NFT
platform.
But
the
image
being
projected
of
crypto
being
willingly
used
and
chosen
by
major
brands
is
a
falsehood,
and
one
that
will
only
end
up
costing
the
industry
more
in
the
long
run.
If
a
false
idea
of
usage
is
bought
and
paid
for,
then
crypto
may
never
find
out
what
people
and
companies
actually
want
from
it.
