Polygon Takes Over Hermez Network for $250mln through Token Merger
Polygon, the Layer 2 Protocol, will integrate ZK-rollup startup Hermez Network into its network in exchange for $250 million in MATIC tokens. Polygon announced on Friday that Hermez will join the network’s portfolio of products under the moniker Polygon Hermez.
The Hermez team’s 26 members, and its technology and services, will embrace the platform, including development on an Ethereum Virtual Machine-supportive solution.
Holders of Hermez’s in-house HEZ tokens will be able to tweak them for Polygon’s MATIC tokens at a 3.5:1 exchange rate as portion of the merger. Polygon said that HEZ tokens will be phased away at an undetermined point in the future.
“We think this is a momentous occasion since it will be likely the first full-fledged merging of two blockchain systems,” Polygon added. “[Mergers and acquisitions] are commonplace in the conventional IT industry. Blockchains, on the other hand, are a novel and intriguing concept.”
Polygon’s acquisition of Hermez is portion of the company’s development towards zero-knowledge (ZK proofs). The initiative has pledged $1 billion to ZK-based services and intends to continue forming collaborations in order to expand its portfolio of services.
Hermez, like a ZK-rollup, utilizes zero-knowledge proofs to validate a big batch of trades. These dealings are carried out by an external environment, which produces proofs for them, which are then immediately recorded on the Ethereum blockchain. The method is designed to save block domain – a normal Ether (ETH) transaction may require only 100 bytes on the network, while a transaction using Hermez would require merely 10 bytes.
Keep Network and NuCypher stated in March that they would combine their data encryption and security methods into a fresh network dubbed Keanu, despite the fact that the businesses will stay distinct organizations. Despite the fact that the ventures have stated that they would create a decentralized autonomous body, expansion will be led by two separate teams rather than a complete merger.