Polygon's $250 million acquisition, L2 competition has shifted

Original Author: Sanqing, Foresight News

On January 13, Polygon Labs announced the completion of its acquisition of cryptocurrency payment infrastructure Coinme and blockchain development platform Sequence, with a total acquisition amount exceeding $250 million. However, Polygon Labs did not disclose the specific acquisition prices for each company, nor did it specify whether the transaction was conducted in cash, equity, or a combination of both.

Polygon Labs CEO Marc Boiron and Polygon Foundation founder Sandeep Nailwal stated that the acquisition aims to support the stablecoin strategy of the blockchain network. Coinme holds a range of remittance licenses in the United States, while Sequence is focused on building blockchain infrastructure, including crypto wallets.

Coinme: Completing the Offline Entry of the Stablecoin Ecosystem

CoinDesk reported on January 9 that sources revealed Polygon was in talks to acquire Bitcoin ATM operator Coinme. Polygon planned to spend between $100 million and $125 million to complete this acquisition.

Founded in 2014, Coinme has been operating in the compliant cryptocurrency business in the United States for a long time. It launched the first licensed Bitcoin ATM in the U.S. and partnered with traditional brands like Coinstar and MoneyGram to establish a cash network with over 50,000 retail locations across 48 states.

Coinme is regulated by the National Mortgage Licensing System (NMLS) and various state financial regulators, providing online wallet and vending machine transaction services, and supports exchanges and withdrawals of mainstream cryptocurrencies including Bitcoin, Ethereum, and Litecoin, enabling users to trade crypto assets more conveniently.

As early as 2024, Coinme's transaction volume surpassed $1 billion and achieved profitability for the first time, indicating that its compliant payment model has a sustained demand for transactions.

For Polygon, acquiring Coinme means directly obtaining a range of remittance licenses across the U.S., allowing Polygon to connect cash, debit cards, and on-chain assets directly within a compliant framework, further promoting the integration of stablecoin payments and off-chain capital inflows.

Sequence: Simplifying the Web3 User Experience

Unlike Coinme, which is responsible for "money," Sequence is responsible for "users." Sequence aims to eliminate the complexity of blockchain through a modular stack, including smart wallets, account abstraction, and the Trails cross-chain orchestration engine.

Sequence's core technology includes the Smart Wallet, which uses account abstraction to make wallet behavior closer to the Web2 account experience, supporting features like social recovery, gas fee abstraction, and automated trading.

Its key component for cross-chain execution is Trails, which allows users to automatically find and execute the optimal path for cross-chain or cross-protocol transactions without being aware of cross-chain, gas fees, or token compatibility after the user expresses intent.

By combining chain abstraction and account abstraction, Sequence not only enables developers to "build once and run on multiple chains," but also allows end users to trade, pay, and interact across multiple chains using a single identity, lowering the entry barrier for novice users into the on-chain world.

Building the Open Money Stack Strategy

Polygon Labs stated that the core goal of this acquisition is its stablecoin strategy and Open Money Stack, aiming to reduce system fragmentation through a unified API.

Open Money Stack | Source: Polygon Tweet

On/Off & Cash Ramps: Utilizing Coinme's compliant network and U.S. regulatory licenses to achieve instant deposits and withdrawals of cash and fiat, whether physical cash or electronic fiat, can be converted into stablecoins or other on-chain assets.

Wallet Infrastructure: Relying on the enterprise-grade smart wallet and account abstraction technology provided by Sequence, along with one-click cross-chain trading and cross-chain interaction capabilities, allows end users to complete on-chain receiving, sending, and payment operations without worrying about the underlying chain, gas, or intermediate assets.

Crosschain Interop: Combining Sequence's Trails cross-chain orchestration engine and Polygon's interoperability protocol makes the flow of value between different chains completely transparent to users and supports cross-chain transactions of any chain and any token.

Blockchain Rails: Leveraging the Polygon network and its scaling technology to provide high-speed, low-cost, and secure on-chain settlement infrastructure, enabling stablecoin payments and value transfers to achieve commercial-scale efficiency.

Additionally, the Open Money Stack plans to integrate stablecoin orchestration with compliance, identity, and yield generation modules to provide enterprises with payment and fund management solutions.

L2 Competition Shifts to "Full-Stack Integration"

Polygon's $250 million acquisition reflects that the competitive focus in the L2 space is shifting from underlying technical parameters to full-stack business integration.

This path is highly consistent with Coinbase's support for Base. The compliant entry through the acquisition of Coinme aims to fill the gap in fiat deposits and withdrawals, paralleling Coinbase's core advantages in CEX; the integration of Sequence is intended to lower the on-chain threshold, comparable to the usability of Coinbase Wallet (Base).

As L2 technologies gradually converge, ecosystems with compliant channels and low-threshold experiences will be more likely to attract incremental funds. Through this series of acquisitions, Polygon is attempting to build its own full-link moat in competition with opponents like Base, which have inherent centralized advantages.