BlackRock has taken another decisive step in blockchain finance by deploying its $500 million BUIDL fund on the Polygon network.
The move, confirmed by Polygon’s chief executive Sandeep Nailwal, marks one of the most significant institutional transactions in recent blockchain history.
Beyond the numbers, this signals growing institutional confidence in decentralised finance infrastructure and in Polygon’s technical strength.
BlackRock’s $500 Million Deployment on Polygon
The deployment of BlackRock’s BUIDL fund has placed Polygon at the centre of institutional blockchain conversations.
The transaction involves a $500 million deposit made directly on-chain, which has been verified by Polygon’s executive team.
Sandeep Nailwal confirmed that this is a legitimate institutional deployment through the BUIDL fund, a statement that has already boosted confidence across the market.
This fund, known as BUIDL or the Blockchain USD Institutional Liquidity Fund, is designed to experiment with the tokenisation of traditional financial instruments.
Its expansion onto Polygon represents a deliberate step towards integrating traditional assets into a public blockchain that can offer both transparency and efficiency.
Polygon’s infrastructure allows for lower fees and faster settlement, while maintaining compatibility with Ethereum’s virtual machine.
These attributes make it attractive to institutions seeking to combine regulatory familiarity with on-chain liquidity.
According to Nailwal, the $500 million deposit forms part of a wider strategy that brings institutional liquidity directly into Polygon’s ecosystem.
The effect on Polygon’s total value locked will likely be substantial, increasing the flow of capital circulating across its decentralised applications.
This injection of institutional funds strengthens Polygon’s credibility as a host for financial-grade tokenisation projects.
BlackRock’s interest in blockchain technology has grown steadily since it began exploring digital asset exposure for clients.
Deploying the BUIDL fund on Polygon demonstrates confidence in the network’s stability, scalability, and capacity to handle transactions at scale without compromising transparency.
The move also reinforces Polygon’s position as a key player in linking traditional finance with decentralised applications, particularly those focusing on real-world asset tokenisation.
Institutional involvement is often viewed as the bridge between blockchain’s experimental stage and its integration into mainstream finance.
BlackRock’s involvement signals that major institutions are becoming more comfortable interacting directly with public blockchains rather than private or permissioned ones.
Polygon, in this context, offers a balanced model where scalability, interoperability, and security coexist within Ethereum’s framework.
The presence of the world’s largest asset manager on Polygon may encourage other financial entities to explore similar deployments.
It also sets a precedent for how decentralised ecosystems can attract long-term liquidity from traditional markets. BlackRock’s decision is not only a financial transaction but a message of trust toward the technology and governance that support Polygon’s network.
Moreover, this development highlights the growing maturity of blockchain-based real-world asset systems. Polygon’s network already hosts a range of RWA projects, but BlackRock’s participation adds credibility and visibility to the idea of tokenised funds.
The deposit could help Polygon solidify its reputation as the most enterprise-ready network within Ethereum’s broader landscape, especially for large-scale tokenisation initiatives.
Critiques from Ethereum and the Layer Two Debate
While Polygon celebrates its new milestone, tensions with Ethereum’s community have surfaced again. Sandeep Nailwal, Polygon’s co-founder, recently expressed his disappointment toward how Ethereum leaders have treated Polygon’s contributions.
His remarks have reignited discussions about recognition, loyalty, and independence among Ethereum’s scaling solutions.
In a detailed social media statement, Nailwal revealed that he first joined the blockchain industry because of Ethereum’s vision, not Bitcoin’s. He credited Ethereum’s philosophy for inspiring him to build an improved financial ecosystem.
However, he also admitted that his loyalty had begun to waver because of how Polygon’s work has been overlooked.
Despite its critical role in scaling Ethereum and onboarding millions of users, Nailwal said Polygon has received little acknowledgement or direct support from the Ethereum Foundation or its core community.
He wrote that over the year,s he has maintained respect and gratitude toward Ethereum’s founder, Vitalik Buterin, but that the wider Ethereum culture had failed to recognise Polygon’s achievements.
His frustration echoes a broader feeling among developers who believe Ethereum’s strategy has focused too heavily on rollups and selective innovation, sometimes at the expense of independent scaling initiatives.
The debate deepened when Nailwal noted that Polygon could potentially increase its market value by two to five times if it chose to position itself as a fully independent layer one network.
He stated that the lack of recognition has even led some to question his moral and fiduciary responsibility toward Polygon.
The idea that networks such as Hedera Hashgraph could be valued higher than Polygon, Arbitrum, Optimism, and Scroll combined highlights how market perceptions are often shaped by branding and categorisation rather than performance alone.
Nailwal’s comments attracted attention across the crypto industry. Some developers sympathised with his perspective, pointing out that Polygon’s contributions to Ethereum’s adoption are substantial.
Others argued that Polygon’s growth has already made it an ecosystem of its own and that its identity as a layer two is increasingly symbolic rather than technical.
Ethereum’s co-founder Vitalik Buterin later responded, acknowledging Polygon’s positive impact. He praised its role in developing scalable infrastructure and its involvement in initiatives like the CryptoRelief programme, which delivered critical aid during the pandemic.
Buterin also recognised Polygon’s work in proof aggregation, an innovation that supports Ethereum’s broader scaling roadmap. His statement served as a reminder that, despite ideological differences, Polygon remains an integral part of Ethereum’s extended ecosystem.
However, Nailwal’s frustration reflects a deeper issue facing the Ethereum landscape. As more layer twos evolve into semi-independent ecosystems, the relationship between the base layer and its extensions becomes increasingly complex.
Polygon, which started as a sidechain, now operates a diverse network of interconnected chains supporting everything from decentralised finance to gaming.
It is no longer just a scaling solution but a standalone framework attracting institutional money and mainstream partnerships.
The timing of this public exchange is striking. As BlackRock’s $500 million deployment shines a global spotlight on Polygon, Ethereum faces internal debates about governance, scalability, and decentralisation.
The contrast underscores how quickly the industry is changing and how the boundaries between layers are beginning to fade.
Polygon’s success story suggests that collaboration and competition can coexist, but it also raises questions about how Ethereum can maintain cohesion among its expanding family of networks.
Polygon’s journey demonstrates that being aligned with Ethereum does not mean being dependent on it. Its infrastructure, community, and partnerships have reached a level where it can stand independently while still contributing to Ethereum’s broader vision.
This dual identity may ultimately prove to be its greatest advantage, enabling it to work with traditional institutions like BlackRock while continuing to support decentralised innovation within Ethereum’s orbit.
Conclusion
BlackRock’s $500 million deployment on Polygon marks a turning point for institutional blockchain adoption.
It reinforces Polygon’s reputation as a robust, scalable, and trusted environment for tokenising real-world assets. At the same time, Sandeep Nailwal’s critique of Ethereum sheds light on the evolving relationship between core networks and their scaling partners.
Polygon is no longer defined solely by its connection to Ethereum but by its growing independence and capacity to attract global institutions.
As more traditional players enter blockchain finance, Polygon’s role in connecting decentralised systems with real-world capital appears more important than ever.