Market Brief | Polygon Founder: Inflation has peaked, projects focused solely on playing token games will fade away

Polygon co-founder Sandeep Nailwal shared his market views, emphasizing that the market downturn is due to macroeconomic factors, not any weaknesses in Web3, and believes that inflation has already "peaked."

The following content is translated from Sandeep Nailwal's Twitter. For more details and discussions, please refer to the original link.

I rarely comment on the market, but here is my view on the current chaotic situation in all markets.

*Not financial advice*

1. The market downturn is more closely related to the macro environment than any weakness in Web3. In the long run, Web3 is still very bullish. Therefore, beginners need to continue learning, and builders need to keep building!

2. The bear market may be long, but if the Federal Reserve makes any decisions to remove uncertainties, a large amount of funds will enter and bring about an aggressive bull market rebound. However, concerns about stagnation and stickier inflation make this scenario less likely.

3. In the private market, many venture capital funds have raised a lot of money. While they will be cautious in their selection and agree to lower valuations, I expect venture capital that invests based on arguments to continue deploying funds. Most of them will also play a role in the liquidity market.

4. Some projects with a certain Product Market Fit (PMF) can still raise funds in the potential Total Addressable Market (TAM). If your project cannot, the key is to survive in a specific way, such as engaging in consulting services or reducing costs to survive. Those who only play the token game will be eliminated forever.

5. Projects with ample funding to run for 2-3 years and actively build during this period have the potential to create generational value. I can confidently say that Polygon is one such project, along with many others.

6. Prediction: Within 3 to 6 months since macro factors began to drive, the Federal Reserve has raised interest rates 2 to 3 times and inflation has "confirmed" its peak. Large investors can digest any upcoming rate hikes, and the market will find a bottom, and everything will return to normal.

7. However, the above are rational analyses. As legendary economist Keynes said, "The market can remain irrational longer than you can remain solvent." So please hedge correctly and appropriately, and never deploy more funds in the market than you can afford to lose. Protect yourself!