Polygon and Becoming Polygon Hermez via the First Full-Blown Merger of Two Blockchain Networks
Polygon announced that Hermez, one of the most prominent zero-knowledge (ZK) cryptography-based scaling projects and teams, will be joining Polygon. Starting today, they will initiate the process of merging Hermez into the Polygon ecosystem, where it will be operating under the new name: Polygon Hermez.
Polygon Hermez will become a part of the growing Polygon suite that already offers solutions such as Polygon PoS, Polygon SDK, Polygon Avail, etc. The maximum amount that will be committed for this merger from the Polygon treasury is 250M $MATIC tokens, or roughly $250M based on the price at the time of reaching the agreement (August 4, 2021).
This merger is their first big foray into the ZK scaling field after we publicly announced ZK-based solutions as our strategic focus moving forward. More details on this strategic decision can be found in our ZK thesis.
Hermez is building an EVM-compatible solution: EVM is the de facto standard for blockchain development. Hermez is the only decentralized rollup. Rollups are very popular solutions at the moment and there are great expectations from them in terms of improving security and decentralization
Polygon believes this will be a historical moment of merging, this will the first full-blown merger of two blockchain networks. All components of the Hermez project: technology, live solutions, team, and HEZ token will be integrated into the Polygon ecosystem.
HEZ token holders will be able to swap their tokens for Polygon’s native token (MATIC) via the swapping contract that we will publish soon. The swap ratio is 3.5 MATIC : 1 HEZ, and is calculated based on the respective prices at 11AM CET August 4, 2021, as previously publicly announced by the Hermez team. MATIC will remain the only token of the Polygon ecosystem and it will take the role of HEZ in Polygon Hermez moving forward: it will provide security, rewards and potentially some additional utilities. HEZ token will cease to exist after a specific date yet to be defined. All other details of the merger will be announced and explained in the days and weeks to come. We are excited to design and observe the dynamics of the merger and the new frontiers it will open in terms of blockchain governance, token design, utility, value accrual etc.
Lastly, it is important to stress that although this is in itself a very big and important event, in the grand scheme of things, it is just our first major foray and investment into the ZK field. As stated in recent thesis, Polygon team are strategically committing significant resources, including $1B from their treasury to ZK based solutions. They will continue investing and putting effort in growing the team and suite of solutions, with the goal of becoming the leading team in the ZK scaling sector and onboarding the first billion users to Ethereum.
