Polygon Co-Founder Mihailo Bjelic Resigns: Is the Layer 2 Giant Fading?

Polygon, originally launched as Matic Network in 2017 by Bjelic, Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, has been a cornerstone of Ethereum’s scaling solutions, enabling faster and cheaper transactions through its Layer-2 infrastructure.

However, recent years have seen Polygon slip from its position as a top-tier L2 network to one struggling to retain its user base and market relevance. Polygon’s TVL has declined from highs of nearly $10 billion in 2021 to approximately $978 million as of May 26.

A String of Departures

Bjelic announced his departure on May 23, 2025, via a post on X, stating, “After much thought and reflection, I’ve decided to step down from the board of the Polygon Foundation and wind down my day-to-day involvement with Polygon Labs.” He cited evolving project visions as a reason for his exit, noting, “As projects evolve and mature, it is natural for visions to evolve, and sometimes diverge.” While stepping back, Bjelic expressed confidence in Polygon’s leadership and pledged to support the project “from the sidelines.”

Sandeep Nailwal, Polygon’s COO, praised Bjelic’s contributions.

Despite the sentiment, the loss of three co-founders in two years has fueled speculation about internal challenges and strategic shifts at Polygon Labs.

From Top L2 to Declining Usage

Once hailed as Ethereum’s premier Layer-2 solution, Polygon has faced a noticeable decline in usage and market performance in 2025. In its early days, Polygon boasted billions of dollars in total value locked (TVL) and was the go-to L2 for developers building dApps, including major projects like Aave, OpenSea, and Uniswap. However, recent data paints a less optimistic picture. According to DefiLlama, Polygon’s TVL has dropped to $977.46 million as of May 26, 2025, placing it as the 13th largest chain, far behind competitors like Base ($3.92 billion TVL) and Arbitrum ($2.64 billion TVL).

The price of Polygon’s native token, POL (which replaced MATIC in September 2024 as part of the Polygon 2.0 roadmap), has also struggled. As of May 25, 2025, POL is trading at $0.2368, down 5.1% in the last 24 hours and 67% year-to-date from its March 2024 high of $1.24. This decline aligns with broader challenges in network health reported earlier in 2025, with analysts noting reduced transaction volumes and user activity compared to newer L2 solutions. For instance, while Polygon reported 546,000 daily active addresses and 3.4 million daily transactions in Q1 2025 (a 4.4% and 8% increase from the previous quarter, respectively), these figures pale in comparison to competitors like Base and Arbitrum, which have capitalized on Ethereum’s scaling needs more effectively.

Posts on X reflect growing community concern, with some noting that Polygon has gone “from a top 3 L2 in 2020 to a network barely used today.” While these sentiments are not conclusive, they highlight a perception that Polygon’s dominance has waned as newer L2s gain traction

Strategic Shifts and Future Outlook

Despite these challenges, Polygon continues to innovate. In Q1 2025, the network saw partnerships with major players like India’s Jio Platforms to integrate Web3 capabilities and RealEstate.Exchange for real-world asset tokenization. The Polygon 2.0 roadmap, including advancements in zero-knowledge (ZK) technology and the MATIC-to-POL token migration, aims to enhance interoperability and scalability. However, the departure of key founders and declining metrics suggest Polygon faces an uphill battle to regain its former stature

Bjelic’s exit marks a pivotal moment for Polygon. While he remains optimistic about the crypto industry and hints at future involvement, his next steps are unclear. As Polygon navigates this transition, the blockchain community will be watching closely to see if the project can reclaim its position or continue to fade in the rapidly evolving Layer-2 landscape.