Hermez Network, a prominent zero-knowledge cryptography-based scaling project, will merge with India-based Polygon, an Ethereum scaling project, Polygon announced on Friday.
Fast facts
- Polygon has initiated the process of merging Hermez, including its technology, team, live solutions and HEZ tokens into its ecosystem. Hermez will operate under the name Polygon Hermez as a part of Polygon’s suite of offerings. The Polygon suite already provides solutions such as Polygon PoS, Polygon SDK and Polygon Avail, among others. The amount committed for the merger was 250 million MATIC tokens (roughly US$250 million, based on the price at the time an agreement was reached on Aug, 4).
- The two projects are merging their native tokens — Polygon’s MATIC and Hermez’s HEZ. HEZ holders can exchange their tokens at a rate of 3.5:1 per MATIC token. HEZ tokens will be phased out an unspecified date.
- According to the announcement, the deal is the “first full-blown merger of one blockchain network into another.” It is also one of the first instances of a token merger.
- Hermez is the only decentralized rollup, according to the announcement, which means it executes transactions using blockchain outside the main Ethereum chain or layer-1. It uses ZK technology, which employs cryptographic algorithms to verify and settle transactions without using the underlying data. The system enables faster token transfers and saves block space — while a standard transfer of Ether might take around 100 bytes on the chain, a transaction with Hermez would take around 10 bytes.
- The Polygon-Hermez merger is part of Polygon’s strategic commitment to ZK-based solutions. In a blog post last week, Polygon announced that it has allocated US$1 billion towards adopting, developing and acquiring ZK projects and solutions.