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Blockchain image problem: Polygon Labs’ Rebecca Rettig hits back at sceptics

Blockchain image problem: Polygon Labs’ Rebecca Rettig hits back at sceptics
Polygon's Rebecca Rettig believes there is a need for blockchain and created a database to prove it.
  • Blockchain has an image problem with people struggling to see the need for the technology amidst numerous scandals.
  • Polygon’s chief policy officer plans to fix this with a database of blockchain use cases that have a positive social impact.
  • However, sceptics doubt it will be enough as many previous projects have ended in humiliating failures.

Blockchain was punted as a revolutionary technology poised to disrupt every industry from healthcare to Hollywood, but it’s now suffering from a bad PR problem.

The highest-profile crypto exchanges are embroiled in legal battles with regulators, and a range of much-hyped blockchain projects have very publicly failed or faded away. And then there’s the bad press around Bitcoin’s climate impact.

Blockchain can, however, still count on formidable believers like Rebecca Rettig, chief policy officer at Polygon Labs, to cheer it on.

Kicking off her career litigating complex commercial disputes, Rettig switched gears in 2021 to become Aave’s general counsel before jumping over to Polygon at the start of this year. As a litigator-turned-crypto advocate, her job is to distil complex information into a narrative, whether for consumption by a jury, a policymaker or a regulator.

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The Value Prop is her latest effort to help other advocates do just that. It is a crowd-sourced database of blockchain projects that tries to make a case for the tech’s positive social impact. It’s her and Polygon’s answer to policymakers’ question of why people need blockchain when other technologies could seemingly do the job.

“There needed to be an answer to that,” Rettig told DL News.

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Chain-agnostic tool

The Value Prop is an attempt to provide an easily referenced educational resource for anyone trying to persuade policymakers or even the general public of blockchain’s benefits.

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The Value Prop features around 300 projects from 39 use cases — including apps for know-your-customer functions, digitising royalties payments, and cross-border digital currencies — in seven verticals such as healthcare, finance and social impact.

Some of the projects are high-profile and established. These include USDC issuer Circle and the Singapore regulator’s Project Orchid. Others are smaller and more obscure.

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But Rettig says the Value Prop intends to keep signing up projects, and said some 100 more projects have put themselves forward since Polygon publicised the database last week. Projects must be vetted by her team before they are listed in the database under certain criteria, like having users and a working website.

Rettig said the database is intended as a public good, so it’s network-agnostic.

“We didn’t build this to highlight applications that were built on top of Polygon,” she said. “It spans from Bitcoin to Ethereum to Polygon, Solana, Base and others.”

As such, it’s a bridge between the two worlds of policy and decentralised projects often run by anonymous individuals.

“[It’s about] what we are explaining to policymakers and society at large, who have questioned why we need blockchain or crypto. But it’s also meant to speak to a lot of the community,” Rettig said.

Failure to launch

Crypto Twitter hailed Rettig’s efforts as a rare instance of celebration for the beleaguered industry. Blockchain advocates sometimes argue that the scandals and lawsuits rocking crypto come down to human foibles and are not a failing of their underlying tech, lamenting that the public still tends to conflate volatile cryptocurrencies with blockchain.

Polygon’s own MATIC token was identified as a security by the Securities and Exchange Commission in a lawsuit filed against Binance. The network has said it does not target US consumers.

In parallel, blockchain projects in financial services — which has long been seen as a kind of testing ground for blockchain’s viability — have so far failed to find really transformative uses for crypto or blockchain.

That’s not for lack of trying. This week alone, Deutsche Bank applied for permission to become a crypto custodian in Germany, heavyweights including Citadel Securities and Fidelity launched a digital assets exchange, and BlackRock applied to launch a spot Bitcoin exchange traded fund.

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But global banks and asset managers have invested in blockchain for a decade, seeing it as a way to bring efficiencies to creaking technology in areas like collateral management. Mostly these have been run as internal innovations pilots and quietly abandoned.

But some publicised projects wound up being humiliating failures. The Australian Securities Exchange took a $170 million hit in November, after the failure of its project to replace its clearing and settlement system with blockchain.

Mainly, these failed projects could have been done with other, cheaper technologies, Virginie O’Shea, CEO and founder of consultancy Firebrand Research, told DL News.

“The vast majority of work has been on private blockchains and these aren’t interoperable,” O’Shea said. “As an industry, we seem to be building the same silos on different technology. The concept of an open, publicly available blockchain that provides full transparency is always going to be challenging in capital markets with many intermediaries with vested interests.”

From the initial focus on settlement efficiency, firms have now shifted to wider tokenisation efforts, trying to prove the viability of digital securities issued on blockchains, she said.

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“We’re still in pilotsville with these. Industry level, we’re seeing the same thing across the board, including central banks testing out the concept of CBDCs,” O’Shea said.

“Nothing thus far has been game-changing.”

Creating transparency

But Rettig is sanguine, pointing to the flood of news about traditional finance’s foray into crypto and blockchain.

“TradFi has voiced scepticism over time for one reason or another, but I don’t think there was actually scepticism internally,” she said. “There’s a lot going on in those institutions, they haven’t slowed down.”

And the use cases go far beyond finance, to digitising land registries in developing nations, or creating transparency into where nonprofits are putting their funding.

A decentralised autonomous organisation founded by United Nations agency UNICEF for greater transparency in social giving, for example, is featured in the database, Rettig said.

“We are highlighting a lot of things that sceptics may have turned up their noses at or thought are unnecessary.”

Have a tip about blockchain use cases? Contact the author at joanna@dlnews.com.