Polygon Founder Questions Loyalty to Ethereum on X

Nailwal’s comments prompted a response from Vitalik Buterin, who praised Polygon’s impact but maintained it isn’t a true Ethereum layer 2 due to missing security proofs. In response to this, Solana leaders invited Polygon to join their ecosystem. Meanwhile, BitMine chairman Tom Lee doubled down on his bullish outlook for Ethereum by revealing a $250 million ETH purchase that brought BitMine’s holdings to 3.3 million tokens worth over $13 billion. Lee also still firmly believes that ETH’s price could hit $10,000 before the end of the year.

Sandeep Nailwal Hits Out at Ethereum

Polygon co-founder and CEO Sandeep Nailwal openly criticized Ethereum’s leadership, and accused the Ethereum Foundation and its community of failing to recognize or support Polygon’s contributions to the Ethereum ecosystem. In a post that was shared on X yesterday, Nailwal said he was “questioning his loyalty” to Ethereum, despite Polygon’s long-standing position as one of the network’s key scaling solutions. 

He claimed that Polygon’s decision to brand itself as an Ethereum layer 2 rather than a layer 1 likely cost it billions in potential valuation. Nailwal also claimed that the Ethereum community’s lack of appreciation became much more difficult to ignore.

“The Ethereum community as a whole has been a shit show for quite some time,” Nailwal wrote, and urged the community to reflect on its internal culture and leadership direction. His comments led to a heated debate across the crypto space and even drew a direct response from Ethereum co-founder Vitalik Buterin.

Buterin responded by acknowledging Polygon’s major contributions to Ethereum’s ecosystem, including hosting the largest predictions market platform Polymarket, and pioneering advancements in zk-EVM technology. He also praised Nailwal’s philanthropic projects through CryptoRelief, which helped fund healthcare and biomedical research in India. 

However, Buterin stopped short of calling Polygon a true Ethereum layer 2, and said that it still lacks a proof system required for full Ethereum-level security guarantees. He explained that while Polygon could adopt an existing zero-knowledge (ZK) technology stack to achieve this, the team has yet to implement such an upgrade.

Nailwal’s comments were made amid wider concerns about the Ethereum Foundation’s internal leadership and direction. He pointed to a letter from former Ethereum Foundation researcher Péter Szilágyi that expressed frustration with the organization, as well as the recent departure of early Ethereum developer Eric Conner. He left in January due to disagreements with Buterin’s leadership.

Nailwal’s post also attracted support from several Solana executives, including co-founder Raj Gokal and former head of strategy Austin Federa. They encouraged Polygon to consider teaming up with Solana or even becoming a layer 2 solution on its rival blockchain.

X post from Austin Federa

BitMine and Tom Lee Still Bullish on ETH

Other people in the industry are a lot more optimistic about Ethereum and its path forward. BitMine chairman Tom Lee confirmed that the company went on an Ethereum buying spree after one of the crypto market’s largest deleveraging events earlier this month. 

Lee explained that open interest levels for Ethereum returned to where they were on June 30, when the token traded close to $2,500. He described the current market setup as an “attractive risk/reward” opportunity, driven by what he called Ethereum’s ongoing “Supercycle.”

On Monday, BitMine bought another $250 million worth of ETH from crypto exchanges Bitgo and Kraken, according to blockchain analytics platform Arkham Intelligence. The acquisition adds to BitMine’s already impressive Ethereum reserves, and brought its total holdings to over 3.3 million ETH. This is valued at more than $13 billion, and represents about 2.74% of Ethereum’s total supply.

Lee has been one of the most vocal institutional bulls on Ethereum, and recently reiterated his belief that Ethereum could still hit $10,000 before the end of the year. On the Bankless podcast last week, he stood by that forecast, and argued that the current market conditions make the asset deeply undervalued relative to its long-term potential. To reach that target, ETH will need to climb roughly 150%.

BitMine’s aggressive accumulation strategy coincided with a sharp rise in its stock performance. Shares of BitMine (BMNR) surged 7.92% on Monday to trade at $53.80, which is a 691% increase over the past six months. Lee attributed the rally to growing institutional interest, as BitMine and Strategy (MSTR) together now account for almost 88% of all global digital asset treasury trading volume.

BitMine’s share price over the past 6 months (Source: Google Finance)

BitMine is currently the world’s largest Ethereum treasury company. The next biggest public holder, SharpLink Gaming, holds around 840,000 ETH, according to data from StrategicETHReserves. Institutions collectively now own more than 5.74 million ETH, equivalent to roughly 4.75% of the total token supply.