Polygon (MATIC), a layer 2 scaling protocol and framework has acquired ZK Rollup scaling solution Hermez Network via a $250M (in MATIC Tokens) deal. Hermez will be rebranded as Polygon Hermez and act as an important component of the existing Polygon's suite of Ethereum scaling solutions.
Ethereum is one of the most promising and revolutionary tech projects in the world and Polygon's focus on scaling the network has urged them to make such a move. It wants to become the industry leader in ZK technology and the biggest contributor to its research and development efforts. To support this goal, the Polygon team has decided to bootstrap with a $1B fund which will be used to create a strong base for the development of ZK technology to scale the Ethereum Network.
What Are ZK Rollups?
ZK Rollups utilize mathematics to provide proof of the validity of the transactions which then can be verified on the main Ethereum chain. It is considered to be the most innovative and effective scaling solution we have to date. It is called 'Zero Knowledge' because it allows data to be verified without revealing the actual details. You can study more about ZK rollups on Ethereum Hub, since it could be a long term Ethereum scaling solution.
What Is Hermez Network?
Hermez is an open-source, ZK (Zero-Knowledge) Rollup protocol that enables secure, low-cost transactions and is decentralized by design. In fact, it is the only decentralized ZK rollup scaling solution out there that solves the user experience bottlenecks of Ethereum. Hermez records and bundles the 'validity proofs' of several transactions which are settled together on the Ethereum chain. This results in secure and fast transactions with around 90% reduced costs and over 100 times high throughput.
Polygon Hermez Merger/Acquistion Highlights
- $250M deal done in $MATIC tokens as per their agreement done on August 4, 2021.
- $1B allocated to fund the research and development of ZK based solutions and to acquire world-class ZK projects and teams.
- Hermez is building an EVM-compatible solution
- Hermez is the only decentralized rollup
- HEZ (native token of Hermez) 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
Future of Polygon & Ethereum Scaling
Ethereum scaling is a never-ending project and the Polygon is leading it with flying colors. This merger acquisition is a big milestone towards making Ethereum a much stronger blockchain ecosystem that is widely accepted and used. It's great to see Polygon's team experimenting with different scaling solutions to solve major 'user experience' issues.
What do you guys think about this news? Are we going to witness some upward action in $MATIC due to this? Please comment below!
